Everyone’s entitled to their own opinions about Dragons’ Den but - if one thing’s for sure - it’s brought about more awareness of business angel funding than the billions of taxpayers pounds wasted over the years on Government investor-readiness ‘programmes’. However, when a world that was previously shrouded in mystery has the light suddenly beamed on it by reality TV, there will inevitably be misconceptions about the people and the process. Even with a respected newsreader anchoring the programme, real-life funding opportunities give way to dramatisation and editing in the interests of maximum entertainment. ‘Good TV’ after all is more compelling than ‘good business’. Here are seven myths expunged:

Myth 1. Investors will always want half your shares
Is it just me or are the Dragons getting greedier? Inflated by perceptions of their own value perhaps, figures of 50% are being bandied around without a glint of irony or opportunism. Business angels – the type of investors who give advice as well as financial backing – typically require up to a third of the shares in a business. In fact the following formula seems to be the norm: 1/3 for the angel, 1/3 for the inventor/founder, 1/3 for the management (often the same person/people as the founder/s).

Myth 2. Investors will always be better than you at negotiation
Typical angels are successful and will probably have made their ‘fun money’ from building-up and selling a previous business. Indeed we’re reminded in every episode that the ‘Dragons’ are serial-entrepreneurs. While success is unquestionable, this alone does not automatically grant everyone top level shrewdness… a lifetime’s hard graft could be the more likely reason an angel is rich and wants to help someone else.

Myth 3. A fifth of investors are women
The BBC producer is tasked with ensuring the panel of five is represented by at least one woman. In reality, 99% of business angels are men, despite the fact that 46% of high net worth people are women. The men in suits may well follow investment advice from their wives but few will readily admit that is how their decisions are made.

Myth 4. Investors make an offer on the spot
Investors will want to see a business plan, or executive summary at the very least before requesting a meeting. They will want time to consider the opportunity and conduct due diligence. Even at the height of the dotcom boom the fastest investment made (Atlas Venture putting £2.5m into Toby Rowland’s Clickmango) took 10 days of endless meetings and number crunching. The press seems to delight in stories of Dragon funding promises being broken on the back of things not being quite what they first seemed in the Den.

Myth 5. Investors are media-savvy ultra HNW egotists
Beer & Partners, the UK’s largest network of business angels with over 1,500 currently on its books, says ‘normal’ is the word to best sum up its members. They may have a combined total declared wealth of over £3bn still represent a fairly wide demographic. Investments in private equity can start as low as around £10k and the average is around £100k. There are a growing number of people with this level of funds at their disposal, who are attracted by the prospect of investing in a privately-owned business and leveraging their investment with their own knowledge, experience and contacts.

Myth 6. The opportunities to meet investors are very restricted
Where, for heaven’s sake, do you go about meeting a business angel without taking the risk of fluffing your presentation on national TV? Beer & Partners, which is FSA regulated, holds a variety of networking events up and down the UK throughout the year. Every six months, for example, it holds the London Investment Fair in St James’s, attracting up to 150 business angels wishing to invest in start-ups. It’s an informal and intimate event with room for just 32 investor-ready companies, fielding questions from potential suitors about their business expansion plans. As a successful format tried-and-tested for the past eight years, historically around a third of the companies attending the Fairs attract equity funding through contacts made.

Myth 7. Failure to attract investment will result in humiliation
While the questions posed by the Dragons might be pertinent, the way in which they are phrased is not true to life. Nor is the humiliation. Even winners are made to feel small. In the real world, off camera, business angels will want a civil conversation where unanswerable questions are simply parked. Semi-retirement is common among business angels and an invitation to meet for a chat at their home is not uncommon.

Michael Weaver is the chief executive of Beer & Partners, a leading source of venture capital and angel investment for growing businesses in the UK

 www.beerandpartners.co.uk