East needs more angel investors
A series of events will take place across the region starting later this month to try to convince more East of England entrepreneurs and high net worth individuals to find their wings as angel investors.
The 'business angel awareness events,' which are organised by St John's Innovation Centre (SJIC) and will take place in Norwich, Ipswich, Chelmsford and Cambridge over the next two months, coincide with the launch of the East of England Development Agency's (EEDA) new angel co-investment loan fund at the beginning of April. The fund, which is to be managed by Finance East, will make available to early stage businesses a total of £1.25m as match funding for business angel investment.There are an estimated 4,000 to 6,000 business angels in the UK but the British Business Angel Association (BBAA) and NESTA suggest more could invest their time, experience and money in early stage ventures. Early stage ventures report that fundraising has been exceptionally challenging in the last 18 months as the banks, venture capitalists and friends and family have battened down the hatches. Grant funding remains a useful source, but it requires match funding which frequently comes from business angels. The BBAA and NESTA published a report last year that confirmed the importance of business angels in supporting early stage companies and painted a positive picture of the investment returns. The report, based on a survey of 158 UK angels carried out in late 2008, found that up to a billion was pumped into young companies by such investors·Based on the sample used by the report, the average angel investment is £42k, with angel investors typically making an average of six investments, usually with co-investors. Angel investing is usually a local activity, with tax incentives a key motivator. 56 per cent of exited investments were at a loss but 44 per cent were at substantial gains, leading to an average multiple of 2.2 in just under 4 years, the report found.Cambridge already has established networks of active business angels -players such as Cambridge Capital Group and Cambridge Angels - but SJIC hopes that the awareness raising events it is organising, the growth of co-investment funds and other initiatives such as its ‘Understanding Finance for Business’ programme could further invigorate the scene in the city, as well as improve the picture elsewhere around the region.Among Cambridge's hottest tech start-ups to have been given a helping hand by local angels are Light Blue Optics, Nujira and Ubisense. David Gill of SJIC believes the ‘Understanding Finance for Business’ programme his organisation runs has the potential to deliver useful deal flow for business angels: “As the Managing Director of one of the East of England’s most vibrant enterprise hubs and a seasoned investor, I see many start-ups created out of hugely innovative technology having to work extremely hard to secure funding. Time spent fundraising is time not being spent developing their technology and it is my firm belief that if the UK is to continue to compete as an innovator, business angels are needed now more than ever.” “The BBAA/NESTA report demonstrates that angel investment is a proven solution for early stage ventures and it is needed now more than ever. We have a number of angel networks in the region and we would benefit from more investors; the more angels in the mix, the more expertise and funding will be available to prove and develop emerging technologies with the help of the new co-investment fund.” The business angel awareness events are for people with an interest in angel investment, either on their own account or a client’s. There will be an opportunity to talk to members of the BBAA, Business Angels, tax advisors and representatives from EEDA's Business Finance team. The events will take place on the following dates: Norwich: 23 March 5.30pm - 8pm @ St Giles Hotel, Walnut Street, NorwichIpswich: 25 March 5pm - 8pm @ Ramada Encore, IpswichChelmsford: 20 April 5pm - 8pm @ Pontlands Park, ChelmsfordCambridge: 29 April 5pm - 8pm @ Murray Edwards College, Cambridge To find out more or register to attend one of the events, please contact Miranda Edwards on 01223 421988 or medwards [at] stjohns.co.uk.