John Whatmore's blog

Growth in UK Angels

John Whatmore - 23.07.2012

The annual National Investment Summit run by the UK Business Angels Association, which I attended recently, illustrated the growth of angel investing in the UK and its increasing sophistication.

The angel investment industry in the UK is taking off, fuelled perhaps by the fact that top end bonuses and salaries have continued to fare well; and it is attracting new investors and seeking new syndicate leaders.

Although it is perhaps no more than twenty years old, some say that it is now bigger than the venture capital industry (which has declined substantially in recent years), and of course it has a role in replacing the funding that the banks used to provide. It is moving into new areas (eg in collaboration with new mezzanine funds) and combining with new partners (eg co-funders), although it does not yet have the same capacity as its counterparts in the States.

Such are the risks that angel investing only makes sense, as some speakers made clear, in the context of large portfolios and repeat investing, in which clear investment strategies will benefit. Leaders see themselves as having a special contribution to make to their investments - through a close knowledge of a particular sector, and their understanding of and ability to contribute to the evolving needs of early-stage businesses; all founded on the ability to know what makes a good business opportunity. But experts in angel investing are as yet in short supply.

The UK Business Angels Association announced its new name, a new constitution - that embraces a wider range of participants than the individual angels for which it was originally constituted, a new organisation and a new Chairman - in Sir Nigel Rudd.