INVESTORS | Do's and Don'ts

If you are an investor, actively seeking to invest your money in and around UK in more profitable ways, then you can always reach out to angel investors. They have the most extensive and intriguing assemblage of start-up proposals for angel investors, pitched towards early investment stages, all rounds of funding, expansion and growth capital and research & development funding.

There are many key sectors and industries in the UK which offer great opportunities to businesses wanting to expand their horizons. Investors also have the option to invest various businesses in a range of regions throughout the UK. For many more reasons, the UK is the ideal location for overseas investors to set up or expand their business. 

Investing in the UK is a good choice because the country provides a good platform for an investor to access European markets and even global markets. 

The UK has ‘the right environment’ with its strong regulation and intellectual property right protection and just around in the month of May 2010, UK welcomed Chinese investors in the country.

The UK has been judged the top destination in Europe for foreign investors for the eighth consecutive year by recent reports as well. The reputation of London as a centre for financial services and the strong relationship the various corporates have with the US are the reasons behind the UK’s popularity with foreign investors. UK attracted 678 investment projects from foreign investors during 2009, which helped create more than 20,000 jobs. 

The US was the largest investor in the UK, having started 243 investment projects on British soil during 2009. London has been deemed the most attractive city for investment for investors with 263 projects secured, a figure which is two higher than 2008. UK continues to achieve because of the strengths of London as a business and financial services centre, the underlying strengths of the UK in securing service sector investment and, crucially, its close corporate relationship with the US.

Judging by past performance property values consistently increase in the long term and property’s tangible nature makes property investment extremely attractive as investors can see, feel and touch their investment. On average, every eight years house prices have doubled and in the last two years alone annual capital gains of between 20 and 30% were seen. Only fairly recently have house prices shown any significant downward shifts, yet over a ten year period, this is a drop in the ocean compared to the staggering value increases that have been seen. As people live longer lives and divorce rates continue to rise, the demand for housing will inevitably increase and this cannot get anymore exciting for a property investor.

In case one is looking to find an investor for his new start up then it is never an easy approach. However, it is still possible to get investments from venture capitalists, family and others when the business is presented in a good light and the potential returns for the investment seem likely and large enough. Ultimately the single most important thing an entrepreneur can do to entice investors is to develop a clear and measurable plan for business growth and a strategy to achieve that growth.

You need to have a clear and a crisp business plan. 

Any start-up should begin with a business plan. A business plan is a document that forecasts how the business will operate and should also include pro forma financial statements that forecast expenses, revenues, and assets for the business over a period of years. The business plan serves as a road map for the entrepreneur and shows an investor that a method for success is in place. Declare your own investment in the business because investors are much more likely to invest in companies when the entrepreneur has invested his own money. Many investors prefer to put their money in companies where executives own large amounts of shares. You ought to present a strong plan for how the investment would contribute to the growth of the business. As basic as it sounds, the pitch for an investor needs to show that his money will improve the business. For example, the added investment might be critical to opening a new revenue channel. However, an investor is unlikely to give money to a business where it appears that the money would only go to keep the lights on or to maintain the existing operation. Broadly speaking, investments for capital expansion are more likely than investments to pay for day-to-day operations.

Many people also look out for angel investors for their start up businesses. These investors have a larger tolerance for risk and invest in emerging small start-ups in exchange for equity in the company. You should make a profile of who your ideal investor would be and the kind of investor you want and are looking for. Include areas such as experience and personality and then use this list to evaluate potential investors. You can seek angel investors in universities, venture capital clubs, and business incubators. Fellow entrepreneurs without aversion to risk can be found in colleges and among other business owners. You may find an investor who is a good fit for your business there. Ask your attorney or accountant if they know of possible angel investors as they know their clients well and know how much money they have to invest. Seek experience and advice as well as money. An angel investor can also provide you with management experience that will help your business go to the next level.

UK is forecasted to have the strongest business environment of all major European economies for the period 2008 - 2012 and is one of the easiest places to invest in the entire Europe for any investor.