Investing in new businesses can be 'quite a lot of fun'
Whilst private investors may have invested in my clients’ business propositions because of the potentially eye watering returns, it seems that personal and altruistic motives may also have played a part, according to the latest BIS Equity Finance Scheme Survey.
According to the July 2011 survey, Business Angels may regard investing in early stage companies as “quite a lot of fun”, albeit that the enjoyment is derived from adding value by leveraging their business expertise.
Some Business Angels, however, expressed altruistic motives and regarded their investment in early stage companies as an opportunity to ‘create a healthy commercial environment’ and highlight the importance of SMEs to the UK economy - ‘we believe that businesses are the engine of society’.
Of course, it’s still the eye watering returns that provide the underlying motivation, but it is important to have something to feel good about whilst waiting for the anticipated IPO or trade sale.
Pilot's note: you may wish to download the 74 page survey at the link below, then wizz to pages 40 and 66 for more about investor motivations and the overall report summary.
