Entrepreneur FAQ

• What is the South African Investment Network?

   The South African Investment Network is an online platform designed to connect entrepreneurs (looking for growth or start-up capital) and angel investors (looking for investment opportunities). The South African Investment Network is unique in that it offers a local, national and global platform with partner networks across North America, South America, Europe, Africa, Asia and Australasia. The South African Investment Network is continually growing, developing and updating its extensive database of angel investors.

• What is an Angel Investor?

   Originally, the term "angel" was coined to refer to the people who financed Broadway plays when all else failed. Today this term has become common among the investment community to refer to a high net-worth individual that invests their own personal funds in various businesses. In SA, it is estimated that there are well over 200,000 potential angel investors that annually invest approximately 3 billion in South African businesses and currently own over 12 billion in existing equity. This represents roughly 7% of what the banks are investing. As well, statistics show that this figure trumps that of venture capital lending. The South African labour market and productivity centre estimates that angel investments have financed approximately twice as many firms as any other form of external equity investment, including institutional venture capital.

• Who is a typical Angel Investor?

   Angel investors are often retired entrepreneurs or executives, who may be interested in angel investing for reasons that go beyond pure monetary return. These include wanting to keep abreast of current developments in a particular business arena, mentoring another generation of entrepreneurs, and making use of their experience and networks on a less-than-full-time basis. Thus, in addition to funds, angel investors can often provide valuable management advice and important contacts.

• What is the difference between an Angel Investor and a Venture Capital firm?

   Angels make their own decisions as opposed to a board or group of people making a decision for investors that have pooled money together. Angels tend to be more involved in the businesses that they invest in and provide assistance in ways that venture capital firms do not. Angels typically do not own as large a stake in the company as a venture capital firm would. Another benefit of being an angel investor is the reception of certain tax incentives from controlled small businesses.

• How do I know if my proposal has been received?

   You will know that your proposal has been received if it appears in the list of "Active Proposals" in your member's area. If there are no proposals in your member's area then you will need to resubmit your proposal. Always write your proposal in another programme and cut and paste to avoid the page timing out.

• How much does it cost?

   More information can be found on Our Rates Page.

• Why isn’t it free of charge?

   Many people have asked us why we charge entrepreneurs for the service. Firstly we are running a commercial enterprise and don’t get any public funding, so we need to cover our admin and promotion costs, pay staff to check your submission and pay for the upkeep of the website. Secondly we are providing a valuable service to the entrepreneurs who need the much needed to support to get their ideas in front of investors. To set up a serious business with outside funding you do need to be prepared to spend some money. The fee is very low compared to other companies in the industry who will often charge around 5% of the amount you wish to borrow.

• Do I have to pay for every contact?

   No, the Standard, Express, Express Plus and Global Express Plus packages all give you access to the contact details of ALL the investors who wish to contact you. Your proposal remains active for 90 days and all investor contacts are included in this period. You do not need to pay for each contact.

• Why don’t you take success fees instead?

   If you think of Angel Investment Network as the funding equivalent of an online dating agency it makes more sense. You wouldn’t expect a dating agency to only get paid if and when you marry the partner you found on their site. They wouldn’t be able to find you or know you were getting married without employing a private detective! Likewise we can’t hope to individually track everyone who enters their idea over the internet. Often all we have is an email address for you. Plus we have no control over how good your idea is and therefore your likelihood of finding an Angel. There may be a few Angel groups who don’t charge upfront, but they heavily screen incoming ideas and reject about 90% of them, which means most people are left without a chance of connecting with Angels.

• Why isn’t my proposal appearing in the list of recent proposals?

   If you have just submitted your proposal, it is probably because we haven’t approved it yet. We have to read and activate each proposal before it is released to the investors. Alternatively it may be because you have just edited your proposal, which means that it is removed from the system until we reapprove it.

• What currency should I pay in?

   You can choose to pay in any currency. Paying in British Pounds has the most options, and payments through PayPal are made in British Pounds. If you wish to pay with Visa Electron Debit, select the payment in British Pounds on the World Pay site.

• Does my company have to be established?

   No, we accept projects at every stage of development – from ideas to start-up companies to mature businesses. Even if your project is still an idea, it could still be of interest to the investors. They might even have the relevant knowhow and expertise to get the ball rolling.

• Is there a maximum/minimum investment?

   No, our investors are interested in projects ranging from thousands of rand to millions of rand.

• Are the contact requests automated?

   No, all the contact requests you receive are from investors who have read your investment proposal and decided they want to discuss your project in more detail.

• Who are the investors on this website?

   The investors on our website have been compiled from databases of angel investors, company directors and private investment groups. They also include individual investors who have registered in the hope of finding investment opportunities. Our database is continually expanding with new investors looking to invest in companies like yours.

• How much information should I include in my proposal?

   If you are worried about confidentiality we would advise you not to give away too many details in your proposal. Try and write enough to get the investors interested in your project without revealing the key ideas. In the "Useful Documents" page of our "Get Investor Ready" section, you will find a free NDA document, which you can get all the potential investors to sign before presenting your idea in full.

• How is my privacy protected?

   The site was developed using proprietary database management tools and a secure server is used to assure that no one sees your business or personal information. Your information is not offered to any third party for any purposes and is guaranteed to be kept confidential and private.

• Why should I use this service?

   As an entrepreneur, you are already aware of the growing resistance of banks to finance small business. It is virtually impossible to obtain financing without having secured assets, providing personal guarantees, etc, etc. Angel investors are the logical source to provide financing to small business. With the funds invested growing all the time, the main obstacle is locating and presenting your idea to this large group of investors. The South African Investment Network allows an entrepreneur to:
  a) Find a source of capital.
  b) Find an experienced investor that can provide guidance and support.
  c) Make it all come together in a fast and efficient way.

• How will I attract the attention of potential investors?

   When dealing with an angel investor, at the very least your proposal should address the following:
  - How much money do you need?
  - Why do you need it?
  - When do you need it?
  - What are you willing to give up to get it?
  - When and how can you pay it back?
  Investors need your answers to these questions before they will even consider helping you. They are not looking for "pipe dreams" or unprofessional sounding proposals. They expect a reasonably sound business plan as well as an understanding from entrepreneurs that an investor is not going to just blindly hand over significant sums of money with no strings attached whatsoever. They may be angels but there are limits to what they are prepared to do.

• How can I pay if I don't have a credit card?

   If you are unable to or feel uncomfortable using a credit card, you can pay by PayPal, MoneyBookers or bank transfer.

• Why am I being asked to pay again?

   You have to pay the Standard, Express, Express Plus or Global Express Plus Fee for every proposal you submit.

• Due Diligence

   Please be aware that after the initial match has been made it is the entrepreneur's responsibility to carry out diligence on the investor. Please inform us of any suspicious behaviour.

• I have other questions. Who do I contact?

   Contact us by email: admin@investmentnetwork.co.za

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Connecting South African Entrepreneurs and Angel Investors.