Are Business Angels potential leverages to boost your business ? Growing SME’s look for alternative financing sources than banks Early stage funding is the cornerstone to boost your business Crowdfunding is a growing alternative Business Angel is filling the financing gap progressively in Europe Key criteria for Business Angel when selecting a project Key criteria for entrepreneurwhen selecting Business Angels

1. Are Business Angels
potential leverages
to boost your business ?
Women in Business Conference
Bucaresti, October 17 2013

2. In 2011, most SME’s in Europe still rely on banks and
subsidized bank loan to finance their activities… but access
to financing from banks got tougher
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Are SMEs sufficiently aware of financing alternatives ?
How could they get easier access to these alternatives ?

3. Did the situation improve since 2011 ?
In 2011, extract from the survey requested by Directorate General for Enterprise and Industry of the
European Commission, in cooperation with the European Central Bank.
 Difficult access to finance is among the top concerns (15%) of SMEs. However the most pressing
problem continues to be finding customers (24%).
 Almost two-thirds (63%) of the EU SMEs who applied for a bank loan during the last six months
received the whole amount they asked for.
 In general, the SME respondents in Europe consider that the conditions of bank financing worsened
in terms of the interest rate and other costs, collateral and required guarantees.
 30% of companies are using bank loans and 40% are using bank credit line or overdraft facilities.
 Bank loans are also the most widely preferred external financing solution to realise firms' growth
ambitions (63%).
 Generally it is the larger (both in terms of staff and turnover) and older enterprises that are more
likely to get the external finance that they request.
 Regarding equity financing, it was used by 7% of the SMEs and the main challenge concerning this
source of financing is the lack of investment readiness or financial knowledge.
 Younger and smaller firms are more likely to get only some of the finance they requested, and,
indeed, to be rejected outright. The highest rejection rate was among the micro companies
employing less than 10 people (16%) and among SMEs active between 2 and 5 years (24%).
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4. Growing SME’s look for alternative financing
sources
 As VC’s tend to invest on average EUR 350K at seed stage and
EUR 1 million at the start-up stage, entrepreneurs are faced
with a significant financing gap for investment amounts below
these sums.
 As the internet bubble and the recent financial crisis have
pushed VC’s out of early stage venture capital.
Other financing alternatives are needed to support SME’s and EU
Authorities have been working actively on this, fostering private-
public collaboration !
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5. Early stage funding
The cornerstone to boost your business
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6. Early stage funding
State incentives are necessary
•Example Belgium, Sowalfin
Subordinated loans – by banks, guaranteed by States
•Example : Loan for Innovation in Poland, Belgium
Subordinated loans – by BA and VC, guaranteed by States
•Example : UK, Belgium (1 EUR BA for 1 EUR State, max 125 K EUR)
Co-funding between BA and Public bodies
•Example : UK, France, Sweden
Enterprise Investment Scheme, tax deduction for investment in SME’s
Financial instrument with min capital protection guaranteed by States
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7. Early stage funding
Crowdfunding is a growing alternative
 Evolution of investment raised in UK via crowdfunding platforms
 Interesting alternative to consider but be careful about the conditions in
terms of fees, governance, exit conditions – and make sure it makes sense
considering your business and your strategy
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8. Business Angel is filling the financing gap
progressively in Europe
In Europe, business angel investment is currently only EUR 3–4 billion per year compared to
nearly EUR 20 billion in the USA.
Across Europe there are 75,000 active business angels organized in 391 business angel
networks in 32 countries.
Business angels are a growing part of the investor spectrum that is partially filling this
financing gap.
The amount invested vary greatly depending on the country and region, with individual angel
investments ranging from EUR 15K to EUR 400K and angel syndicates sometimes investing in
excess of EUR 1 million.
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9. BA’s invest in various sectors
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Investment per sector in UK in 2012

10. Why more women BA’s are needed
•Women comprise up to 40% of entrepreneurs
•Women comprise, on average, 11.5% of Boards in Europe (thanks to Scandinavian countries)
•Women control around 50% of the world’s wealth…
Women are seriously underrepresented in BA’s in Europe, although :
•while 15% business angels are women in USA
•30% in France and in Poland
In Europe, women BA’s < 5% in average
•Increase the number of deals and increased total investments raised
•Better risk diversification : women are “less likely to hold a losing investment too long, to wait
too long to sell a winning investment, to buy a hot investment without doing any research or
to allocate too much of their money to one investment” .
•Better return on investments : women approach due diligence very differently, tending to be
more thorough in due diligence, to ask more questions and push on real numbers rather than
expected ones and relying on more diverse business skills
Why more women ?
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11. Some figures
Femmes Business Angels, France
Every year
 300 start-up projects are received and analysed by preselection committee of FBA
 120 entrepreneurs present their elevator pitch to selection committee
 50 projects are presented to monthly investment forums
 10-12 projects receive fundings from FBA members
 Projects searching for 100 K – 1 mio EUR
Since creation of FBA network (2003)
 100 deals concluded in 70 start-ups from various sectors
 Total assets raised : > 4 mio EUR
 Average deal = 400 K EUR, split over 3 to 5 investors
 Entry ticket = 10 K EUR to 30 K EUR
 Network of 100 women, active in all sectors and all management functions, average age = 48
years (avg age of BA in France = 57 years)
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Telecom Pharma Food Health & Mobile apps

12. Some figures
Be Angels, Belgium
Every year
 300 start-up projects are received and analysed by preselection committee of FBA
 80 entrepreneurs present their elevator pitch to selection committee
 40 projects are presented to monthly investment forums
 19 projects receive fundings from FBA members in 2012
 Projects searching for 100 K – 1 mio EUR
 Average ticket/investor : 65K EUR – in general, 3 to 5 BA’s per project
WBAC – Women Business Angels Club
 Created in 2012
 21 members
 Since integration of more women BA, more projects founded by women in the pipeline
 6 projects supported
Since creation of Be Angels network (2000)
 170 start-ups supported from various sectors among which 70% still active
 Total assets raised : 30 mio EUR
 150 members including WBAC
 Exit period : 5 to 7 years by sale of shares to founders or to new BA’s
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13. In Belgium
the landscape evolves quickly
Common tool
with other BAN
– GUST
Go Beyond Fund
Start-up week-
ends – public-
private
collaboration
Communication
strategy in press
and social media
Entrepreneurshi
p award
Structured
collaboration
BAN-incubators-
entreneurship
pgms
Financial
support by
public bodies
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14. What is a Business Angel ?
Private
individuals
investing own
cash alone or in
group
Preference to
local companies,
unless large
experience in BA
Sector-specific
investments,
where
expertise and
experienceInvest in
growing
companies –
min growth
potential of
20%, expected
high return
Take 15% to
25% equity
share max, Exit
after 5 to 7
years
Look for financial
commitment
from the
founders
Purely
financial,
involved in
success stories,
active in a new
business
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15. Key criteria for BA
when selecting a project
Idea
•Articulate your Heart
and purpose
•Be very clear on the
why of a business
Think big, start
small, then
scale or fail fast
•Focus on a well-defined
market or niche
•To start, think of where
you can be the best
Entrepreneur
team
•The team is more
important than any idea
or plan.
•Top 3 priorities =
people, people, people
Potential
growth and
return
•Understand your
business model
•How you will make
money
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16. Key criteria for entrepreneur
when selecting BA’s
Cash ! + Potential
for next investment
rounds
Expertise and
Management
advice
Experience sharing
Feedback on
strategy,
profitability drivers,
business
development
Access to BA’s
address book,
contacts
Right chemistry
Active or passive
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17. In a nutshell
 Business Angels can be a solution to finance
your growth but
– choose the right ones
– prepare yourself and your organization to the
integration of external shareholders
– and look for a balanced mix : banks, States
incentives, business angels, VC’s or Private Equity
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18. Thank you !
Karin Maquet
karin.maquet@kammco.be
+32 473 910 538

19. References
 http://ec.europa.eu/enterprise/policies/finance/files/2011_safe_summar
y_en.pdf
 http://ec.europa.eu/enterprise/policies/finance/files/expert-
report_en.pdf
 http://www.gemconsortium.org/docs/274/gem-2006-financing-report
 http://www.ukbusinessangelsassociation.org.uk/sites/default/files/media
/files/taking_pulse_of_the_angel_market_02_07_2013_0.pdf
 http://gust.com/en/industrystandard
 http://www.eban.org
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