Business Angel Investing: Awareness SeminarPresentation Transcript
Business Angel Investing: Awareness Seminar 4 th March 2010 Brewin Dolphin, Newcastle upon Tyne
Welcome Dan Brophy Chief Executive, Entrust
Introduction John Duns Divisional Director, Business Development & Marketing, Brewin Dolphin
Did you know?
· One of the largest independent private client investment managers in the UK
Over £20 billion assets under management
Significant financial planning expertise
Investment Banking Division with National coverage
Corporate adviser to over 100 corporate clients and Institutional clients
Graham Thrower Board Member, North East Access to Finance
Anthony Clarke Chairman, British Business Angels Association
Angel Investing The Risks and Rewards
Definition of a Business Angel “ An individual, acting alone or in a formal or informal syndicate, who invests his or her own directly in an unquoted business in which there is no family connect and who, after making the investment, takes an active involvement in the business, for example, as an advisor or member of the board of directors ”. Prof Colin Mason and Prof Richard Harrison, UK 2007
CAPITAL NEEDS TIME SEED START-UP EARLY GROWTH SUSTAINED GROWTH HIGH RISK LOW RISK Co-investment Funds Business Angels Formal Venture Capital Exit IPO/Trade Sale etc Finance Ladder PRE-SEED Friends, Family, Neighbours
UK Business Angels invest £750m p.a.
BBAA – 24 networks – 6,000 angel members
Approx 18,000 Angels (UK EIS statistics)
2007 – VCs invested £434m in start-up/early stage
Equals 50% of angel investment
EU : £3bn – £3.5bn invested p.a. (EBAN 2008)
EU :50,000-75,000 angels; UK = 30% Europe market
US : £18bn invested p.a.
US : 225,000 angels; 10,000 invest in angel groups
Trends in Angel investing
Angels increasingly investing in groups to leverage level of finance required by Entrepreneurs and skills of angels
(£500k deal; 5-10 angels; each angel 30k average ) - Lead Angel appointed)
US Angels investing in groups have average 27% return (ACA and Kauffman)
Angels Investing alongside VCs
41% of early stage VC deals in UK were public and private sector syndications
72% of US Angels have done deals alongside VCs
Increasing number of funds set up on side of networks to close equity gap and attract new angels to the market across Europe
Recent Research on Angel Investing
NESTA-BBAA “Siding with the Angels”- May 2009
Angel Investing = Most significant source of investment in early stage companies - more than half of investments made were pre-revenue.
Business angel investment does carry risks - 56% of all deals not returning their stake money.
But ….. 22% IRR return overall
Shows importance of promoting Business Angel finance as an important Asset Class to wealthy and sophisticated individuals
Recent Research: Angel Returns % of Exits Multiple Category
Industry Experience Affects Outcomes % of Exits Multiple Category
Due Diligence Affects Outcomes % of Exits Multiple Category
Board Involvement Affects Outcomes % of Exits Multiple Category
BBAA Campaign 2009-10
Build on Research results to promote awareness of angel investing across the UK regions – Promote recognition of this Asset Class
Recruit individuals with Business skills, expertise and Smart Money
Government (BIS) and RDAs backing the campaign
Regional Awareness events – identify new Angel investors to join local networks
Build the capacity of new angels to be effective investors
Opportunities for wide range of agencies to get involved
Angel Investors Checklist
High net worth or self certificated as sophisticated?
How much can I afford to lose?
My age and other commitments?
Single/syndicate investor preference?
My own skill sets/entrepreneurial background?
Sector preference/my experience?
Stage: Start up/ early stage/development?
Tax Planning: EIS Scheme Tax Breaks?
Marketability/location of investments?
10x return on start up/early stage investing
Thank you [email_address] www.bbaa.org.uk
Investor Panel Anthony Clarke Alistair Arkley Chris Thompson John Josephs
North East Angel Fund Jonathan Gold Operations Director, Rivers Capital Ltd & Chief Executive, Finance Tree Ltd
RCP is a joint venture between E-Synergy Ltd and Finance Tree Ltd E-Synergy Ltd is authorised and regulated by the Financial Services Authority As a parent of Rivers Capital Partners Ltd, E-Synergy Ltd will carry out all regulated business on behalf of RCP until it becomes independently authorised
London based VC firm
Manager of several UK funds
John White - CEO
North East based Corporate Finance and Investment Readiness training firm specialising in early stage companies with high growth potential
Jonathan Gold - CEO
Fund Size: £7.5m capital
Deal Size: £50-£150k initial deal size, capacity to follow-on
Can do stand-alone transactions
Mostly equity deals with potential for gearing
Focus is generalist, likely to be relatively early stage
Looking for management ability, market size and innovative products
Process around 8-12 weeks – includes introduction to Angels
Responsible for stimulating Business Angel activity in the Region
For more information contact: Steve Garbutt Fund Manager email@example.com 0191 230 6370 16-18 Hood Street Newcastle-upon-Tyne NE1 6JQ 0191 230 6370 www.riverscap.com To join AngelNet contact: Natalia Blagburn Investment Executive firstname.lastname@example.org 0191 230 6370
North East Business Angel Network Jane Ridley Head of Operations, Entrust
Showcasing high-growth knowledge based companies
A network which includes private equity and venture capital
investors, business angels, successful entrepreneurs, business
advisors and corporate financiers
282 network members of which 123 are business angels
Presentation events take place 5-6 times per year involving 4 or 5 pre-
vetted investment opportunities
Since July 2007 we have showcased over 50 investment
propositions, helping businesses to raise in excess of £1m