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idea #016: Angel Banks


Create a community across a bank.




Access to capital and resources is always an obstacle, especially for small businesses. Banks historically are risk-averse and will provide loans to lifestyle businesses with a more predictable business model. On the flip side, VCs and Angels typically will fund higher-risk ventures with the opportunity to hit a 50x ROI. There's definitely a middle-ground between these extremes.

So.

Why not have the bank act as a broker between high net worth individuals or institutions (current customers of the bank) and small businesses looking for capital (potential customers of the bank), that may be too risky for the bank to support themselves?

This could be a separate investment product offered by the bank where they contribute some internal capital (or none), but the larger value-add would be creation of a community and network to further support emerging businesses. For the new business, it's really difficult to build a network and find individual investors, and the opposite is true for angel investors, which is why the bank would be the perfect intermediary. I'm sure there are processes and infrastructure already in place that would make this an even more efficient model.


This would be particularly interesting for local and regional banks.


Cheers



#dailystartup, #funding, #innovation, #smb, #investing



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