Two Thirds of Small Businesses Prioritise Investor’s Advice over Finance
A quarter of small businesses who successfully obtain finance get refused investor’s advice
A new survey by Angel’s Den revealed that 64% of small businesses prioritised mentoring over cash when seeking investment for their company.
The research, which was conducted with 613 small business owners, found that the majority wanted both, with 76% of small businesses pursuing finance with mentoring and business advice, but only 12% stating that they were looking for money alone.
The report also found that of the 80% of small firms that requested advice from their investors, 26% were refused and 34% only received “minimal or very brief advice and mentoring”.
The survey highlighted that business investment is moving away from the traditional finance-alone funding but that investors were failing to transition with it, with the majority (63%) of entrepreneurs stating that there was an insufficient amount of investment packages that include business advice and appropriate mentoring.
Co-founder and director of Angel’s Den, Bill Morrow, discussed the importance of mentoring for both businesses and investors:
“Finding an experienced business person who is willing to both give you the money and help you spend it is the difference between a spectacular company and an average one. Also, from the investors side your chances of seeing a return on your investment sky-rocket if you get involved.
“Offering mentoring is the real difference between investing on paper and investing whole-heartedly. There needs to be avenues there for all types of investors and businesses seeking investment.”