The country had no angels

Angel (Del lat. Angelus, and east of the gr. Ἄγγελος, messenger).

This post is an expanded version of the platform which is published in the journal Entrepreneurs of October, you can download it here

The country had no angels

I refer to Business Angels. The most accurate translation of this Anglicism could be "angel investors" and are usually in Spain, angels, and sometimes also even investors.

Not long ago, one of the most renowned business angels in the technology sector and innovation I confessed, "My range of investment is up, with an effort 200.000Euros. At a recent meeting we had of Business Angels in Switzerland, many European private investors we confessed that their range of investment was up 2 or 3 million Euros, something impossible to extrapolate to Spain, where the financial capacity does not currently exist .

In Spain, almost all new companies in the technology sector, require an initial funding of around 400,000 euros, the first step is generally to use the classic 3 F (Friends, Family and Fools). After having considered these possibilities "close" the resources and the doors to the call are exhausted with astonishing rapidity. Of all the new business ventures in the technology sector, only 30% achieved a poor pass this first hurdle, the remaining 70% of projects that generate employment and wealth are forgotten awaiting a funding option.

Getting funding of nearly € 400,000 has always been difficult, but it is more difficult to understand because the crisis does not affect the achievement of funding today. A few months ago there was money for a few, and you as an entrepreneur was not among them, and now joy! we are in one of the few cases where the situation has worsened with the crisis, we remain the same, there will be no money for your project.

In Spain there is a real structural problem, the figure of Business Angels and there is almost traditional venture capital companies are in our country of "Capital" justito and "Risk" little or nothing. Currently these companies only support projects that are clearly winners and almost never serve out sub 1 Million Euros. The result is a no man's land, which would have to pay for it to be watered Business Angels willing to support the launch of these investment companies with ranges close to the 300,000 or 400.000Euros.

To be honest it should also be noted that real angels are few, and enter and leave the sector often. In fact I would say that the figure of the professional individual investor is almost nonexistent and the few who are studying, supporting and sticking up for this sector are mostly successful entrepreneurs.

These success stories were small entrepreneurs in the late 90s, who have made money over the years and like to do what nobody did for them, gambling and investing in young companies, look at the face of an entrepreneur, believing in his project and join him on the road, trying on many occasions provide not only funded but also value and not just profit-oriented medium to long term, they like what they do and for them is a great profession, but I insist, are few and could count on quite quickly, too quickly.

The Spanish government has never encouraged the figure of the Business Angel. It's a shame because it is a key figure in promoting innovation in Spain. In our country, only 5% of Internet start-ups survive their first year of life. This cruel natural selection is essential figure not only a financial investor such as a bank or credit of the ICO, but a genuine mentor, usually to provide not only financing but also, experience, know-how and advice from a person who like him has been through his own concerns.

Unfortunately the few that act at the moment have some bold and far from romantic. The work of these investors is not regulated, has no defined taxation and does not have the slightest or even institutional support with defined rules of the game. Possibly for this reason, when you go out and step on the road, outside some very specific sectors of entrepreneurs, people do not know who is and who represents or is to be a business angel.

A few weeks ago, on 19 May the CIU spokesman, Josep Antoni Duran Lleida and presented at the Congress of Deputies a non-legislative proposal for regulation, empowerment and recognition of the figure of Business Angels in Spain. It details the role that private investors are in SMEs and microenterprises.

In the reasoning of the letter, it is shown that if traditional financing in Spain has been the main obstacle to the growth of innovation-based companies, at present, in which banks refuse systematically to bet on such companies is essential to regulate and enhance the figure of the business angel as a backbone of projects related to technology and innovation. It reminds the Government that no such tax advantages for these investments, usually ranges between 25,000 to 300,000 euros, contrary as if going to risk capital, and emphasizes that the development, regulation and empowerment of these has been key investors in the surrounding countries in the development of innovation projects.

Finally, it urges the government from the Congress to work in 3 key lines:

-- Regular figure of Business Angels

-- To establish stable partnerships with networks of business angels from the public.

-- Regular and encourage investment tax benefits you are applying them to natural and legal figures.

Following the mandate of Parliament the ball is on the roof of our Government. They are now responsible for implementation of stimulus measures that are the real germ of the appearance of these figures and supporting private initiatives and SMEs from a very early stage.

"Grounds for optimism? Have begun the first steps and we just have to look to other European countries (France, Germany, Switzerland ...), Japan or the United States to see how it is regulating the figure of Business Angels, for some years. In Spain, at least, started walking and this is already a reason to keep working and support from our investment companies to entrepreneurs who presents his new projects.

Tags: angeles, Business Angels, Entrepreneurs, Investment, Business