The key component required by a budding entrepreneur to turn a conceptual business idea into a successful commercial entity is funding. There are a number of options for financing a start-up, namely personal or family investment, bank loans or venture capital funding.
Not everyone, however, has personal or family money to invest, and banks usually insist on some form of security over personal assets in return for a loan. These sources of funding can only go so far. In addition, with the economic global downturn venture capitalists are expressing caution in relation to funding new companies, particularly in the technology sector. There is, therefore, a gap in the capital funding market. This gap between personal investment via personal savings or bank loans and venture capital financing is filled by the concept of ‘business angels’.
