SLIDE 1 Why hy th the e Bus Busines iness s Ang Angel el Mar Market et an and d See Seed d Ca Capita pital l ne need eds s Pub Publi lic c Sup Suppo port FOURTH ANNUAL EBAN CONFERENCE
13th November 2003
Anthony Clarke
Managing Director One London Business Angels (OLBAN) London Seed Capital
SLIDE 2 OLBAN
Not for profit BAN which is part of London based GLE Group
- Est. 1987; 200+ Reg. Angel investors.
BAN raised over 1.5m EUR equity for SMEs in last six months. To date no public sector support Sister company London Seed Capital
www.businessangels-london.co.uk
SLIDE 3
London: Early Growth SME Funding Scene
British Venture Capital Association has 161 full members. Over 6 billion EUR invested by them in UK in 2002 Average investment of 5m EUR. Venture capital investment in start up/early stage SMEs almost non existent. Little VC appetite to invest below 1m EUR Deal size considered uneconomic and too risky for institutional investors.
www.businessangels-london.co.uk
SLIDE 4
SME Equity Provision< 1m EUR
Regional Venture Capital Funds Business Angel Networks Business Angel Co investment Funds University Seed Funds A small number of specialist VC’S and seed funds
SLIDE 5
Regional Venture Capital Funds
Currently being established throughout UK Typical fund size circa 50m EUR 25% Public Sector subordinated funding Investment in SME up to 700,000 EUR Maximum initial investment 350,000 EUR Exits sought within 3-7 years
SLIDE 6
Business Angel Co Investment Fund
London Seed Capital UK Govt. Funded. Angels match Launched Dec. 2002. 4 deals funded 4m EUR to invest. Max initial investment 150,000 EUR Fund invests on same commercial terms as angel investors
SLIDE 7
Why Angel Co Investment Funds?
UK Government now establishing 6 Regional funds in UK Funds stimulate Angel activity Low cost model alongside BANs Fund encourages Angel Syndication LSC invested 600,000 EUR in 4 SMEs + Angels investing 1.2m EUR
SLIDE 8
Public Support to BANs?
Angels invest in Equity Funding Gap. UK Angels activity trebled 1999-2001 BANs struggle to break even Accredited/proven BANs need public support to increase investment activity Public support to stimulate angel activity is cost effective for public sector Public funding for OLBAN’s Investor Training Programme
SLIDE 9 Seed/Early Growth Funds Sustainability
- Reg. Venture Capital Fund and Angel Co
Investment Fund Models not yet commercially proven Public funding support key to introduction
Both models designed to earn a commercial return Jury is out!!
SLIDE 10
Anthony Clarke
Managing Director OneLondon Business Angels & London Seed Capital c/o GLE Group 28 Park Street, London SE1 9EQ
www.olban.co.uk
