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  Angel Investment Report - What Is An Investment Proposal?

An Angel Investment Report is an investment report which provides an independent analysis and commentary on business angel investment activities of investors in the visible market and an estimate of the overall scale of angel investment activity. An Angel Investment Report also includes a study conducted by HM Revenue and Customs of the demographic highlights of angel investors getting tax relieves as per the Enterprise investment scheme, Venture Capital Trusts and community investment tax relief via self-assessment. An Angel Investment Report highlights what an investment has made in return for convertible debt or ownership equity.

An Angel investment report is crucial to the financial market since it facilitates an accurate and profound comprehension of the role of an angel investor and his or her investment made in the entrepreneurial finance system. In addition, an Angel Investment Report also provides information that clearly highlights the definition of angel investing and the current state of construing the phenomenon.

To be very precise, an Angel Investment Report is supported by four major factors or components:

  • The strength and size of the angel capital market: This component serves as a major attribute of an Angel Investment Report as it underlines important details of the capital market in which angel investor has divulged his capital.

  • The demand present for angel capital: This factor plays a vital role in angel investing and hence needs to be clearly highlighted in an Angel Investment Report. The demand factor associated with angel capital reflects the likeliness of success of angel investment made in terms of its returns.

  • The primary characteristics of angel investment: An angel investment report will lose its essence if it does not include the niche details relating to angel investments. The fundamental characteristic of angel investment includes the amount of angel investment made, the returns in exchange of it, etc. Individual angel investors are usually found to divulge up to £ 100,000 as investment and in many cases nowadays, investors find it easy to operate as a part of an angel syndicate i.e. a group of angel investors, which facilitates large amounts of investment accordingly.

  • The overview of the company receiving angel financing: An angel investment report also provides a working overview of all the companies receiving angel financing and what they aim to achieve with the help of angel investing. It also includes details of where the angel investments will be diverted and how they will be utilized.

Every economy posts it own annual report on angel investment activity taking place in it. This report is known as an Annual Angel Investment Report. The report has myriad benefits and it is very essential for any economy to discern the angel investment activity occurring in its market.

On a general basis, an Angel Investment Report outlines the net investment made by angle investors across the market. Also, the various comparisons are made using the current angel investment levels as whether there has been an increase or decrease in angel investment from the previous years, the net angel investment that has been divulged in reference to the number of angel investors compared to the figures recorded for the preceding years. In addition, the report describes the total amount of ventures that have received funding from angel investors or angel groups. In some cases, there are also certain angel investors that conglomerate together to form angel groups or angel networks in a view to share research and invest together, serving as investment pools.

What is an Angel Investment Proposal?

An Angel Investment Proposal is a document formed by the sponsor of a new investment project for angel investors or leaders seeking to make angel investments. In some cases, an Angel Investment Proposal can also be prepared by the management of an already existing company. An Angel Investment Proposal includes the following essential details:

  • The nature of the new project or business for which angel investment is being sought

  • Existing history, if there is any

  • The scope and the growth potential associated with the new project

  • The aim and objectives of the new business project

  • The amount of finance or angel investment required for its realization

  • The promised collateral or security

  • A plan outlining the proper repayment of interest and principal to be made well in time

A proper detailing of the above seven factors would serve as the basis of a successful Angel Investment Proposal, ensuring a robust support from an angel investor. Simultaneously, it is imperative for the management or the sponsor to keep the below mentioned points in mind while formulating an effective Angel Investment Proposal:

  • Seek valuable advice and assistance from an experienced person while writing Angel Investment Proposal. Someone who has written several successful business proposals can use his expertise to prepare a convincing Angel Investment Proposal.

  • Segregate the proposal in two major parts. The former should include details relating to the project opportunity and its benefits. The latter should outline all the financial data including tax returns, a balance sheet and a small overview of the project.

  • The first part should always be limited to first ten pages of the Angel Investment Proposal. However, the main emphasis should always be on the conciseness and clarity of the Angel Investment Proposal.

  • While preparing an emphatic Angel Investment Proposal, it is highly recommended to site different sources to outline the market opportunity.

  • An angel investment proposal should be strong enough to convince the angel investor. What makes an angel investor proposal different from those of the prevailing competitors should be the main highlight.

  • The main target arm of the market should be mentioned. The sponsor should highlight the ways by which he seeks to grab an edge over its competitors and grab maximum market share.

  • Sponsor should mention the prospective customers he seeks to target.

  • The related regulatory issues that the company might have to encounter should be underlined.

  • Last but not the least, an Angel Investment Proposal should mention explicit and in-depth details about the amount of money required from the investor and how it will be used.