Negotiating the deal

How long does this take?

As a rough guide, a minimum of 8 weeks is generally needed from reaching agreement in principle to conclude all the due diligence and investment procedures but this can vary tremendously according to the complexity of the deal and the degree of alignment between the investor(s) and the business. However it is worth bearing in mind that it can take considerable time to reach an agreement in principle, so from first contact to final investment you could take 3-4 months.

How do I Value the Opportunity?

Valuation is a key aspect of the deal negotiation process and determines the share of the business that the investor will own. There is no real science to this, but there are a number of approaches that Business Angels use. 

There are many factors that are important in determining valuation such as: management team; business growth potential; IP; defensible competitive position; scalability; market and customers; EIS/SEIS eligibility and exit prospects. The further developed the company is in establishing these factors and determining its longer term value, the more they can attract as a valuation.