I attended the Whangarei Business Owners Forum last week. The Business Owners Forum was held at the office of Elevate CA in Whangarei and the topic was A Rough Guide to Valuing Your Business. The panel of experts included Whangarei chartered accountant Fraser Hurrell from Elevate CA, Whangarei lawyer Stuart Spicer from Webb Ross, and Whangarei commercial business banker Geoff Grigg from the Bank of New Zealand.

All three experts discussed the aspects of a business that come under the spotlight when a business is being purchased. Lawyers are concerned with due diligence and managing the transaction; accountants are concerned with valuing the business; and banks are concerned with all aspects of the business that affect the risk in lending money to the purchaser.

Other options are available if the bank will not lend money to the purchaser of a business or will not lend money to help the business grow. Those options come in the form of Angels – Angel Investors that is. An Angel Investor is basically just a person with too much time and money on their hands. They want an investment they can get involved in instead of putting money into a term deposit or buying shares on the stock market. Angel Investors put money into established small businesses that either have a high potential for growth or are unique in some way. These types of businesses may be seen as “high risk” so cannot raise finance from another source.

Angel Investors provide more than just money to the entrepreneurial business people they help. As they have a personal interest in the business succeeding they want to protect their investment and offer expertise, mentoring and access to contacts and markets. Angel Investors generally loan money to the business or buy shares in the business. Although the owner may be accountable to an Angel Investor who owns shares, they will not lose complete control of their business. The expertise of the Angel Investor will be a great benefit to the business. That means it is important to find the right Angel Investor with the right expertise.

If you are looking for an exciting investment opportunity or are struggling to raise much needed finance please give me a call for advice. I can help with the nuts and bolts of the transaction; including identifying the best structure to deal with and putting together and/or reviewing your loan or share sale agreement.

To find out more about Angel Investor opportunities in Whangarei and Northland come with me to see Professor Bill Payne speak about Angel Investment at Forum North, 5.30pm on 3 June 2010.

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