A significant part of the customers for whom we develop new prototype products are young start-ups where there is a great deal of talent and ideas, but a lack of financing to get the project underway.
It is true that it is very complicated (and disheartening) to invest energy, effort and money in projects that would have a place on the real market, but which are forced to stay in a drawer because the brains behind them do not have sufficient funding.
This is exactly what the ‘Business Angels’ try to avoid. It is a really moving term to describe the help and backing that those investment groups provide. Basically, they select start-up projects that are potentially promising and inject capital in the company in exchange for a stake in it.
Furthermore, it is not just a mere monetary relationship, as it is very usual for the angels to get more involved in the project and provide their personal experience in the business managed and development that helps the founding partners on their path towards success.
Working in tandem, the partners and the investor agree the terms in each case to guarantee that the interests of both are covered. Ultimately, the common goal in the majority of the cases is selling in the medium term, once the project has taken off so that one side can get a return on the investment and the other can develop the full potential of the project.
This financing system is becoming increasingly more common due to the striking proliferation of the start-ups to do with the world of the new technologies.
Some links of interest: