Finance Praseeda Nair · 2 October 2017
Prudent entrepreneurs too risky for 87 per cent of UK angel investors
Entrepreneurs reluctant to commit themselves financially to their business could be torching investment prospects, as new research reveals£87 per cent ofangel investors consider frugal founders as too risky to back. In a study of over 100 established UK investors, researchers from the University of Edinburgh and the University of Glasgow’s business schools uncovered the traits and characteristics that could be the key to securing external backing as a startup founder. As well as demanding strong financial commitment from a business owner, investors were equally keen to learn the personal characteristics of the entrepreneur. Some 97 per cent said strong leadership skills reduced risk in an investment, while 96 per cent believed familiarity with the market was reassuring. Enthusiasm was another important factor, with 94 per cent seeking entrepreneurs with the energy to make a sustained effort to grow the business. However, a fine line was drawn between business ambition and personal success. Some seven in ten respondents thought founders motivated by status posed an investment risk, yet two-thirds believed a hunger for wealth was a positive trait. Curiously, just 52 per cent said detailed information on the product or service itself was vital in deciding to finance a business, while just a third believed a third-party due diligence check was important. Read our bank spotlight series to find out what high street lenders are looking for in an entrepreneur:
ABOUT THE EXPERTPraseeda Nair
Praseeda Nair is an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.