Investing in Technology StartUps
Last Wednesday I went to introductory evening for new organization setup by the Irish government called Halo Business Angels Network or HBAN for short. The organization is setup to help decrease the gap between investors and entrepreneurs. It will help startup companies find investor that will invest in their company and help them make a success of it. It is like the program Dragon's Den but if you can not get on that show then this is the organization for you.
The evening consisted of 15 would be investors. It was to show how HBAN could help them find startup that they wanted to invest in. The advantages of investing in startups and how to be a good investor when you put your money on the table. I was new at angel investing but a lot of people there were already doing it. They wanted more exposure to other companies. HBAN was going to provide this services and it is going to be free. All they want is to startup as many businesses as they can to help Ireland grow more indigenous companies. Some of the people there had started up and sold companies in the past. For examples manager from this company: www.arantech.com/index.php where there. They had started up and sold that company and where looking to invest their millions in another start up company.
Angel investing is very high risk because a company at start up stage can fail for many reasons. The company could have a great idea but with poor management and poor business skills the company can go bust with in 2 years. It was told to me that if a company is going to succeed it will take 6 years and if it is going to fail it will happen in 3 years. If your start up makes it past 3 years then you might be out of uncertain times and in the money.
The investments they are looking for are typically around €100,000 from one investor. There might be a lot of investors investing in the company depending how much the startup needs to get of the ground. The money will be used to setup the basic company and get a small production going. After a certain time the company might start getting sales. That is when the momentum of grow will start to speed up. This is a crucial time for the company because this is when it has to start delivering. It will need more money to generate more sales. The investor will have to put in more money or else ask a venture capitalist to invest the money that is needed. There are 3 rounds generally in a startup companies life. You can see them in the diagram.
My background is in Software,Telecoms and IT. Those are the sectors I am interested in because I see them as the only viable businesses in Ireland that will be able to export their services. If I invested in a company I could bring a lot to the table besides the small investment I would make.
The organization has a website called www.hban.org
