“HNW” funding involves seeking loans or issuing equity investment (i.e. shares or options that convert into shares) from or to “HNWs” or “high net worth” individuals.
These people can also sometimes be known as “angel” investors.
HNW’s tend to have already have made their money and are looking to re-invest a percentage of their profits, typically by loaning small amounts of money to a large number of start up businesses.
HNW funds tend to be reasonably modest sums of money, sometimes £1,000 or up to £500,000 and typically, the expectation on the part of the HNW lender is to get their money back plus a reasonably aggressive interest rate. Some may take equity in your company in return for their investment and, again, as loans to start up businesses are generally high risk, they may ask to be issued with a large percentage share of the equity in your company.
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