- Business angel (BA)
A business angel is an individual investor (qualified as defined by some national regulations) that invests directly (or through their personal holding) their own money predominantly in seed or start-up companies with no family relationships. Business angels make their own (final) investment decisions and are financially independent, i.e. a possible total loss of their business angel investments will not significantly change the economic situation of their assets. BAs invest with a medium to long term set time-frame and are ready to provide, on top of their individual investment, follow-up strategic support to entrepreneurs from investment to exit. They respect a code of ethics including rules for confidentiality and fairness of treatment (vis-à-vis entrepreneurs and other BAs), and compliance to anti-laundering.
- Business angels network (BAN)
A BAN is an organisation whose aim is to facilitate the matching of entrepreneurs (looking for venture capital) with business angels.
- Business angels Syndication
The gathering of several business angels into an informal consortium for the purpose of creating a critical mass of funds above what each business angel could — or would be prepared to — invest. This term also applies to the pooling of competencies in order to offer more managerial skills than any individual business angel could display.
- Co-investment fund
An investment fund dedicated to the provision of equity finance to SMEs in which business angels have committed to invest provided that they are able to source a co-investor. The co-investment fund invests under the same terms and conditions as the angels, on a pari-passu basis. The fund is run by an independent fund manager who uses to a large extent the due diligence work carried out by the business angels in order to reduce costs. Funds can be managed by business angels, public authorities, venture capitalists, private equity groups, or any combination of the above. In some cases (side-car funds), angels that are already part of an investment structure (BAN) pool resources into a fund for specific investments, in parallel to the activities operated at the BAN level.
- Corporate angel
Companies that make regular large angel type investments often for majority stakes.
- Deal / matching
The conclusion of an agreement whereby a business angel invests in a company’s stock.
- Due diligence
Process of evaluation of a project by a potential investor based on material facts.
- Early Stage Fund
Early stage venture capital and seed funds are those who invest in the equity gap (500.000€ to 3 million€), i.e. making a maximum of 3 million€ investment per company in young innovative SMEs across Europe.
- Entrepreneur angel
Very rich, entrepreneurial individual who backs a number of businesses for both fun and as a better alternative to stock market investment.
Ownership interest in a company or corporation that is represented by the shares of common of preferred stock held by the investors.
- Equity Gap
Gap in the financial market in the area of SME financing, especially in the seed phase.
- Equity stake
An equity ownership position in the company that is provided to a funding source, usually lenders or other investors, as compensation for providing management consulting, financing, or miscellaneous services.