Business angels – who are they? List of business angels in Poland

Business angels are not only investors but also mentors for young, innovative companies. Their involvement can accelerate the growth of a start-up and open the door to new business opportunities.

From this article you will learn:

• Who is a business angel?
• What is the difference between a business angel and a venture capital fund?
• What support do business angels offer?
• How to establish a partnership with business angels and what does it look like?
• What are the disadvantages of business angels?
• What can be gained thanks to business angels?
• Who is a business angel in Poland?

Business angel – definition

Business angels (also called business angels or simply angels) are individuals who invest their own money in young, developing companies, most often startups. They are most often distinguished by the following characteristics:

• They invest their own money, unlike venture capitalists who invest money raised from many investors.
• In addition to financial support, they often offer valuable advice, mentoring and access to their network of contacts.
• They invest in very early-stage businesses, which involves more risk. However, they aim for high returns on investment if the start-up is successful.
• They often invest in businesses located in their immediate area, which allows them to better supervise and engage with them.
• Business angels usually stay with the investment for several years before the company is sold or goes public, allowing them to realise profits.

A business angel is an individual investor who provides capital to start-ups or young companies in exchange for equity or debt.

Definition of business angels

They are often experienced entrepreneurs or managers who not only provide capital but also offer knowledge, experience and business contacts.

Business angel versus venture capital fund

Business angel and venture capital (VC) fund are the two main sources of funding for young and growing companies, especially start-ups. Due to the risky nature of investing in start-ups, both groups of investors aim for high returns, but in addition to funding, they often provide valuable advice, mentoring and access to their network of contacts.

It is important to note, however, that business angels are individual investors who typically invest their own money, whereas VC funds have raised capital from multiple investors, allowing them to pursue larger deals. Business angels are more likely to invest in the very early stages of a company’s development (the so-called seed stage), while VC funds may invest at various stages of development. They also have commitments to external investors who have provided capital to the fund.

Despite their differences, business angels and VC funds often work together. It may be that a business angel makes an investment at a very early stage of a company’s development and then, when the company needs more capital, a VC fund comes in and leads the next funding round.

Support offered by business angels

Business angels provide young and growing companies not only with capital, but also with support in many other areas. They often act as mentors and use their business experience to assist the company in decisions regarding business strategy, management, marketing or product development. In addition, they have a wide network of contacts in different industries, which can help to establish important business relationships, finding potential partners or customers.

The very fact that a business angel has decided to invest in a start-up often increases the credibility of the company in the eyes of investors, customers or partners. In some cases, angels may also hold seats on the supervisory or board of directors of the companies in which they invest. And if the start-up needs additional funding in the future, a business angel can help to attract further investors, including venture capital funds. In some situations, angels can also help with the more practical aspects of running a company, such as sales, marketing or production.

Working with business angels

Working with business angels is a process that requires both preparation and mutual understanding. Before you start looking for a business angel, make sure you have a well-prepared business plan, vision and understanding of your market. It is also a good idea to develop a presentation (pitch deck) that briefly and clearly outlines your company, product or service and market potential.

Not every business angel will be suitable for your project. Look for an investor who has experience in your industry or is interested in your market. You can do this through business angel networks, industry events, referrals or online platforms dedicated to connecting start-ups with investors.

Once you have made contact, organise a meeting to present your company and idea. To do this, create an appropriate business presentation. You can also include a white paper. In addition, be prepared to ask questions and receive constructive criticism from the angel investor. If he or she is interested, he or she is likely to conduct an in-depth analysis of your business. This may include a financial analysis, market research or interviews with your team. Negotiations about the terms of the investment will also begin at this stage.

After successful negotiations, both parties will sign an investment agreement. It is a good idea to consult a lawyer who specialises in this type of transaction to ensure that all clauses are clear and beneficial to both parties. It can be said that obtaining financing is only the beginning of cooperation with a business angel – they often want to actively participate in the development of the company by providing advice, contacts or participating in important strategic decisions.

When working with a business angel, building a relationship based on trust is key. Transparency and constant communication play a central role here. Keeping the investor informed about progress, successes, but also challenges, strengthens mutual trust so that misunderstandings and surprises can be avoided. It is important to remember that although a business angel provides capital, this is not its only role – it is a partner with its own perspective, expectations and goals.

Disadvantages of business angels

Business angels have different levels of experience and their advice will not always be relevant to every situation or industry. They may also not understand the specifics of the market or technology in which the start-up is operating, and may intervene excessively in the day-to-day operation of the company, which may cause management conflicts and hinder its growth. On the other hand, they may also not be sufficiently involved, providing only capital without additional support or guidance.

There is also a risk that a business angel may push for faster profits, which may steer the company towards short-term thinking at the expense of the long-term vision. Funding from a business angel may also not be sufficient for the long-term needs of the business, which may involve seeking additional funding sources in the future.

Benefits of business angels

Through the involvement of business angels, young companies gain access to the angel’s wealth of experience and knowledge, which often accelerates the growth of the business. Many business angels have previous experience as entrepreneurs, making them valuable mentors for start-ups. Their network of contacts can open doors to new business opportunities, potential customers or partners.

Working with a reputable business angel can also increase a company’s credibility in the eyes of other investors, which is crucial for further funding rounds. In addition, they often have a more flexible approach to investment than traditional financial institutions, allowing the terms of cooperation to be better tailored to the start-up’s needs.

Business angels in Poland

Business angels in Poland are playing an increasingly important role in the ecosystem of start-ups and innovative enterprises. Although the business angel market in Poland is younger than in some Western countries, it is gaining momentum and maturity, as can be seen from the increase in business angel activity in Poland, as well as business accelerators and incubators.

Business angels in Poland, like their counterparts in other countries, usually invest their own funds in start-ups in exchange for equity stakes. Not only do they expect a return on their investment, but they are often actively involved in the company’s development, offering experience, contacts and support.

Although the start-up ecosystem in Poland is developing dynamically, access to capital is still a challenge for many young companies. Business angels fill an important gap here, enabling innovative projects to obtain funding at an early stage of development. It is worth mentioning that the Polish start-up market attracts not only local business angels, but also investors from other countries, who see in Poland a great potential and opportunity to invest in innovative projects at an early stage of their development.

Here is a list of business angels that have established themselves on the Polish market in recent years:

• Mateusz Tarczynski, CEO and co-founder of Woodpecker, a cold email management tool, sold his stake in Chop-chop.org and invested the proceeds in start-up RightHello.
• Wiktor Schmidt, CEO and co-founder of netguru, has invested in several Polish start-ups, including ColibriTool, Estimote, Growbots, UXPin and Lever.
• Kuba Filipowski, co-founder of netguru, has invested in Estimote and ColibriTool together with Wiktor Schmidt and in several other start-ups on his own.
• Mateusz Romanowski, co-founder of ZadajPytanie, later CEO of Allani, which was sold to Wirtualna Polska Group, invested in Brainly before getting involved in Allani.
• Maciej Białek, founder and CEO of Pixers, has invested in several startups, including PCdoc.pl and screenSHU.
• Mariusz Gralewski, founder of GoldenLine and CEO of Docplanner, has invested in a number of start-ups, including Preply, Shoplo, Positionly, Brainly and Allani.
• Tomasz Kraus, founder and CEO of Joymile, was one of the founders of Brainly, where he served as CTO, and has invested in several projects including Allani, Positionly, Investio and Luna Lang.
• Maciej Noga, co-founder of the Pracuj group and partner of the investment fund Pracuj VC, has invested in several start-ups including Symmetrical.AI, Therapify and Tomorrow Medical.
• Paweł Kastory, founder and CEO of marketing agency DDB Group Polska, winner of the Business Angel of the Year 2020 competition, participated in the funding round for Cosmose AI and supports start-ups ClauseMatch, Nethone and BotGuard.
• Marcin Tchórzewski, founder of Coders Lab, the first Polish programming school, has invested in, among others, Tomorrow Medical and Listny Cud, and is also a mentor during the PFR Pioneers School.

In addition to individual investors, there are also organisations in the Polish market that bring together business angels and invest in start-ups:

• PolBAN Business Angels Club – the first business angels club in Poland that finances projects that meet the conditions of innovation, market prospectiveness and a committed and motivated team.
• Lewiatan Business Angels – a network of business angels operating at the Lewiatan Confederation, looking for projects from various industries that stand out with a motivated team, innovation and potential to create competitive advantage.
• Amber Business Angels Network – a network developed by the Polish Entrepreneurship Foundation from Szczecin, bringing together around 50 investors from all over Poland. It supports projects at least in the prototype/beta phase with a strong team, innovative project, high potential and access to the market.
• Hedgehog Fund – a business angel fund investing in technology and communication ideas, specialising in marketplace, e-commerce, B2B or Internet of Things projects, with an investment portfolio including companies such as Allani, Evenea, Preply and others.
• AINOT Business Angels Network – a network of private investors supporting early-stage and high-growth companies, with a support project covering four phases: idea recruitment, pre-incubation, equity investment (up to €200,000) and phase II investment.

These organisations and funds have different operating models, but they all support and finance innovative start-ups in Poland, which contributes to the development of the entrepreneurial ecosystem in the country.