Viewers of the BBC’s Dragon’s Den programme will mostly likely be familiar with the idea of the business angel and how far certain UK companies have grown with funding from ‘angel’ sources.

For the uninitiated, a business angel is an affluent individual looking to invest money in starts-up, usually in exchange for shared ownership of the company or simply as a loan to be paid back when the company can churn out revenue.

But as with many investments, being an angel is not just those with stacks of cash but importantly for those who have a keen eye for a sound business idea they would feel confident, quite literally, in betting their money on.

Recently there has been a flurry of sites popping up on the internet promising to match up savers, who are willing to lend, with borrowers – either individuals or small businesses.

However the industry has been mired with criticism that it is inundated with unviable businesses, lack of proper regulation as well as being funded by investors who fail to grasp just how much risk they are taking on and how long they should expect to lock away their money to see real profits.

The latest entrant into this space, the Syndicate Room, asks investors to put their money into companies which have already received substantial financial injections from professional business angels.

Essentially, the ordinary investor is given the chance to ‘piggy-back’ on dragons’ den style professional investors, who have already poured in funding.

The platform boasts that it is unique in the online funding platform world due to the ‘peace of mind’ smaller investors can get in the knowledge that when they invest in a smaller company, the legwork has already been done for them.

The ‘lead’ angels in the funding round will have undertaken their own due diligence on every smaller company with a ‘‘stringent vetting process’, after which the angel will also put in 25% of the value of the required funding.

Gonçalo de Vasconcelos, founder and CEO of SyndicateRoom, said: “By giving private investors the chance to invest alongside experienced business angels, who are putting their own money on the line, we’ve sought to add an extra level of security and peace of mind for anyone wishing to invest in UK start-ups via a crowd-funding platform.

“Clearly, this type of investment will always be classified as high risk, but knowing that the company you are buying into has undergone extensive due diligence by professional investors is something we felt was missing in the traditional crowd-funding model.”

Investing in smaller companies means investors will more than likely have to lock away their money for a number of years before they see any return, and even after that there is absolutely no guarantee they will make a profit.

As the funds are not covered by the Financial Services Compensation Scheme, investors will not be able to recoup their money should something go wrong. The platform is regulated by the Financial Conduct Authority.

De Vasconcelos warns: “Don’t put money in that you can’t afford to lose or may need in an emergency. You won’t see your money for a few years; expect to wait over seven years before you can access it.”

Darius McDermott of Chelsea Financial Services says that despite the platform looking ‘interesting’, it may not be the right investment for small ordinary investors.

He says: “It looks interesting because it will allow private investors access the opportunities that institutional investors would normally get. But whether it’s appropriate for private investors is the second question. The companies that they can invest will likely be higher risk investments. They will be small, and less liquid – and that doesn’t mean they are bad, but does that mean that’s what small investors should be investing in? This is more suitable for sophisticated investors. “

McDermott says investors need to make sure they choose an investment which suits their risk profile, and investing in companies on the platform could be ‘too niche’ for most ordinary investors.

Because of the nature of the companies available on the platform, it is possible for smaller investors to benefit from the Seed Enterprise Investment Scheme (SEIS). Tax relief is available on a maximum annual investment of £100,000.

The Syndicate Room charges the investor nothing. Instead it gets its fees from the businesses that have managed to successfully raise the required capital. Minimum investment amount into a company is £500.