For Scottish entrepreneurs when it comes to launching a business in Edinburgh, there is a lot of high growth opportunity in the city and across Scotland in general. The same goes for finding Scottish enterprises to invest in. Many start-ups choose Edinburgh as the place to base their new business, which means the location is a hot bed of entrepreneurship and high potential.
When it comes to investing in start up companies based in Edinburgh there is a range of sectors that you can invest in. Edinburgh has always been strong in the banking, financial and fintech sectors. So business ideas in this area can be popular and are ripe for angel investing. However, digital sectors, renewables, technology, software and new media are also very popular in Edinburgh, so also offer some good opportunities.
Many businesses set up and operate around Edinburgh city center itself, so property rental prices can be high. This means that cash flow for new businesses might be tight. This is why leveraging co-investment from an angel investor may be one of the keys to success.
Unfortunately for new businesses start-up capital can be tight and business property space can be expensive. Securing additional finance from traditional lenders such as banks, investment banks and venture capital firms can be very difficult. This is where business angels can step in to help out.
Another problem for business owners in Edinburgh is finding the capital to grow your business. Often when a business is trying to expand they need additional finances which they may not have access to. Filling and closing this equity gap is what angel investors can help with.
Another option which Scottish entrepreneurs should check out is that there may be some grants, or even tax relief for start-ups in Edinburgh, made available from the Scottish government. These can sometimes be difficult to obtain for SMES and start-ups but may be applicable for certain business types.
How Angel Investors Support Entrepreneurs
You may find that an angel investor will operate all by themselves; funding companies they are interested in, or picking entrepreneurs they can invest in and support. Alternatively you might find that some angel investment will come from angel groups, where investor members discuss and pick investment opportunities that fulfill the groups goals and needs. These groups operate a little like portfolio companies where they may have multiple investments on the go at the same time. Often you may find that these business angel syndicates operate across a certain sector, or even location. What can happen is that local investors may choose to group together to make investment in certain locations, such as Edinburgh or Scotland in general, to help promote the local area further and increase the growth potential of a certain location.
Entrepreneurs will have to give up some equity in their business to attract an angel investor, so it's important to carry out some due diligence (for both parties) to ensure that the deal is a good one. Angel Investors will likely base their investment amount on not only just the valuation of your business as it currently stands, but also on its future potential.
How the Angel Investment Network Can Help
The Goal of the Angel Investment Network is to connect entrepreneurs and early-stage business angels together locally in Edinburgh, across Scotland, but also by connecting global individuals together. Entrepreneurs that sign up to the Angel Investment Network will be able to pitch their ideas and businesses to high net worth individuals from all over the world, opening up a huge potential for opportunity.