89. Business Angels


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89. Business Angels

  1. 1. Business Angels & Venture Capital - The Swedish Experience Maria Nilsson, Business Angel Relations, SVCA German Business Angel Day Halle, 8 October 2007
  2. 2. Business Angels Venture Capitalists Buyout firms Business Angels … supporting the interests of….
  3. 3. Swedish Private Equity in an international perspective EVCA Yearbook 2007 Private equity investments in % of GDP 2006
  4. 4. VC focus on start-up and expansion Early-stage investments 2001-2006, amount (MEUR) Source: SVCA quarterly reports 2001-2006
  5. 5. Our business angels play a crucial role in the financing value chain IPO Public financing Business Angels Venture Capital Buyout Capital <ul><ul><li>Estimations of the Swedish business angel market </li></ul></ul><ul><ul><li>3000-5000 business angels in Sweden… </li></ul></ul><ul><ul><ul><li>Whereof approximately 5-10 % female angel investors </li></ul></ul></ul><ul><ul><li>… .invest approximately 200 MEUR per year </li></ul></ul><ul><ul><ul><li>Whereof approximately 50% of investments in early-stages </li></ul></ul></ul>
  6. 6. Swedish Business Angel Networks Delfinerna i Västerbotten Uppsala Privatinvesterare Roslagens Affärsänglar Kista Investment Network Östgötaänglar Värmlands privatinvesterarnätverk Connect Väst (4 lokala nätverk) Connect Syd Connect Skåne Delfinerna i Skåne Partners för Utvecklingsinvesteringar inom Life Science (PULS) Business Angels Syd <ul><li>Inget geografiskt fokus </li></ul><ul><li>Spiltan </li></ul>Y Network X-Invest Connect Östra Sverige Almi Stockholm DalaBan Coach & Capital North Sea Angels Coach & Capital Theia
  7. 7. Summary of BAN activities 2006 Source: Activities in Swedish Business Angel Networks 2006, SVCA <ul><li>14 BANs reported investment activity last year </li></ul><ul><li>Approximately 12 MEUR invested through the networks </li></ul><ul><li>72 companies received financing through the networks </li></ul><ul><li>166 business angels invested in projects presented through the networks </li></ul>
  8. 8. Some reflections on trends in the Swedish Business Angel Market <ul><ul><li>Well functioning BANs become more professional </li></ul></ul><ul><ul><ul><li>Requirements on members: membership fee, investment capacity, accessibility, credibility… </li></ul></ul></ul><ul><ul><ul><li>Increased focus on investment process: syndication, standard documentation etc. </li></ul></ul></ul><ul><ul><li>A number of business angel funds are getting started, often with a combination of private and public money </li></ul></ul><ul><ul><li>Incubators are increasingly building networks of business angels as a way of securing financing for the entrepreneurs </li></ul></ul><ul><ul><li>Focus on female business angels </li></ul></ul><ul><ul><li>Business angels are receiving a lot of attention in media and in the public debate </li></ul></ul>
  9. 9. Working towards an improved relationship between angels and VC investors <ul><ul><li>Creating forums where business angels and venture capital representatives can meet </li></ul></ul><ul><ul><li>Leveraging the Association’s activities and publications to spread knowledge about each investor group and their respective approach to investments </li></ul></ul><ul><ul><li>Working to enhance the professionalism in the business angels investment processes </li></ul></ul><ul><ul><ul><li>Transfer of best practice from venture capital processes </li></ul></ul></ul><ul><ul><ul><li>Creating model legal agreements </li></ul></ul></ul><ul><ul><ul><li>Increase understanding of the importance a realistic view on future capital needs </li></ul></ul></ul><ul><ul><li>The Association’s Board of Directors is being composed by representatives from all investor groups </li></ul></ul><ul><ul><ul><li>BA related issues being taken into account in the overall strategic discussions </li></ul></ul></ul><ul><ul><li>Business angel related information included in the quarterly venture capital statistics </li></ul></ul>
  10. 10. Thank you! More information on www.svca.se
  11. 11. Swedish Business Angels   – German Business Angel Day Halle, 8 October 2007 Nils Månsson Institute of Economic Research School of Economics and Management, Lund University, Sweden [email_address]
  12. 12. Sampling business angels <ul><li>There are no public records of business angels. </li></ul><ul><li>Business angels are only a fraction of the general population (probably 0,05-0,15%). </li></ul><ul><li>Hence, a non representative sample must be used in order to be able to reach a large number of business angels. </li></ul><ul><li>Panel studies are needed to identify trends. </li></ul>
  13. 13. The survey study <ul><li>Mixture of different sub samples. </li></ul><ul><li>1519 questionnaires sent out. </li></ul><ul><li>So far 617 questionnaires returned (41%). </li></ul><ul><li>297 active investors (20%). </li></ul><ul><li>High net investors and densely populated areas overrepresented. </li></ul>
  14. 14. Finding investments <ul><li>Informal every day ties as friends and colleagues are very important. </li></ul><ul><li>BAN plays an important role. Among BAN members 29% of investments are found through BANs. </li></ul><ul><li>Formal ties to lawyers, accountants, banks etc play a subordinate role. </li></ul>
  15. 15. The business angels’ investments The average investor invests 333 000 Euros annually, the median investor 90 000 Euros annually .
  16. 16. Way of exiting
  17. 17. Thank you! Nils Månsson Institute of Economic Research School of Economics and Management, Lund University, Sweden [email_address]