Lancashire Business Growth Forum Steve Wall Manager North west Business Angels – Access to Finance #LBGF
UK Business Angel Investing
‘Matching Businesses With Finance ’ • Ensure Viable NW SMEs Are Investment Ready • Support The Process Of Obtaining Appropriate Funding • Impartial / Independent • Experience / Knowledge • Complementary • Fully Funded – ‘Free To Access’
The Innovation Funding Ecosystem CAPITAL NEEDS High Risk Trade Sale IPO (AIM) Formal Venture Capital / Corporate Venturing Accelerators Incubators Business Angels & Co-investment Funds Low Risk Proof of Concept, R&D Grants & Loans Equity Crowdfunding 3 F’s TIME Seed Start-up Early Growth Sustained Growth
Who Are Business Angels? • High net worth individuals • Sophisticated Investors • Company directors looking to diversify their businesses • Investment syndicates ( Groups of individuals ) • Increasingly anyone with an interest via Crowdfunding Platforms !
UK Angel Investing Market UK Business Angels Invest £800m- £1bn p.a. (UK EIS stats) Approx 18,000 Angels ( Iceberg Effect ) VC Investment : £340m pa (BVCA 2015) Angel Investment = 3 x Early Stage VC Investing
UK Angel Investing Market
Business Angels – Observations • Angels Invest Own Money • Equity / Business Experience / Contacts • Average Angel Deal - £50k - £250k First Round • Angels Invest In Syndicates , Pooling Finance / Skills, Usually Around A Lead Angel • Entrepreneurial Angel Groups - “Super Angels” Establishing Funds / Accelerators - Often Replacing Seed VCs • Angels prepared to do follow-on funding rounds • Angels Co-Invest With VCs / Banks / Crowdfunders , also R&D grants
What Are Angels Looking For ? Entrepreneur Or Team – Skills / Drive To Build Growth Business Passion / Commitment ! Business Addresses – Global / Social / Market Challenges Generally Post Proof of Concept Scalable Business Model - 10x x return Can Be Pre-Profit – Clear Strategy To Achieve High Turnover / Growth
Attracting Angel Investment Customer validation – Demonstrable Customer Commitment / Orders / Will Pay The Price For Product / Service Defensible Competitive Position - IP Protection ( Patents ) Or First Mover Advantage Differentiate From Your Competitors Prepared To Have Investors On The Board / Take Strategic Advice Evaluate Potential Tax Advantages – SEIS / EIS Clearly Identify How Will Exit – Angels Need Liquidity !
Seed Enterprise Investment Scheme - SEIS • Investors Receive Up To 50% Tax Relief • Also Exemptions From Capital Gains Tax • Investor Can Invest £100k Each Year • Maximum Business Investment Total £150,000 • Early Stage Business - < 25 Employees / Assets <£200,000 • Trading < 2 Years - Can Be Pre-Trading Or Business Incorporated For Longer . • Business Must Gain Advance Clearance - HMRC
Enterprise Investment Scheme • Investors - Up To 30% Tax Relief + Capital Gains Tax- Deferral • Investors Can Invest £1m Each Year - Company Can Receive £5m EIS Investment PA • SME - 250 or fewer staff • Restrictions On Certain Sectors • Investor Cannot Be Connected To The Business • Investment Must Be Held For 3 Years • Essential - Gain Advanced Clearance From HMRC
Finding Angels • Process - Typically 1 - 3 Months • You Need To Kiss A Lot Of Frogs !
North West Business Angels What do we do ? We match entrepreneurs seeking investment with investors looking for new opportunities .
How do we do it 1.We see up to 40 businesses per month. 2.We review the business for suitability for angel funding 3.We support with investment readiness
How do we investment ready the Business • We help client to produce a fit for purpose business plan Support client with the production of a business plan summary • Help prepare a suitable presentation and coach the client with its delivery
Presentation to Business Angels 1.We arrange a meeting of the Angel investors . 2.Clients will then present their opportunity at an event . 3.Clients also have a showcase at the event and enable direct communication with interested angels .
Message to the Angel network • Not every one can attend our events • We therefor circulate the business plan summaries to our angel population
Businesses grow and may need more funding • We follow up to see if your business is fully prepared for future development . • If additional funding requirements are forecast , we can introduce you to follow on funders who can help you .
Steve Wall North West Business Angels www.nwbusinessangels.co.uk 07824472105
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