Building the angel ecosystem in Wales


Steve Holt
Director, Angels Invest Wales
Published:
Jenny Tooth

This interview with Jenny Tooth first featured in the Western Mail on 27 June 2018 

Jenny Tooth OBE, Chief Executive of the UK Business Angels Association

The latest figures for the UK angel market show that private investors supported 3700 entrepreneurs in the UK in 2017 with a total investment of £1.7billion. That’s the good news. The bad news is that 65% of this investment took place in the golden triangle of London, Oxford, Cambridge and 85.9% of investors were male.

Investor diversity

Only 5% of angel investment focussed on Wales yet Scotland attracted 18% and Northern Ireland 6%. Clearly, we need to build capacity for angel investment beyond London and the South East. We also need to encourage more women to invest; it’s a massive untapped pool so I am keen to ensure a female-friendly culture in angel groups across the country. 

At the UK Business Angels Association, we connect, build and support communities of investors and entrepreneurs. We represent over 15,000 angels investors and have access to some 26 investment funds and 17 online platforms. Supporting the early-stage investment community is what we do best through a programme of education, representation and networking. 

Progressive ecosystem

Building the angel ecosystem is a priority in Wales. We have a programme in place to build connectivity with the launch of angel hubs in key locations that will support syndication and co-investment. We are identifying lead angels so that we can draw on their experience. We also have an exciting new industry-validated online learning course that will help both experienced and first-time investors. 

There are a series of new Government initiatives designed to encourage angel investment including a new £100 million fund to leverage regional clusters and new additional tax relief for investing in knowledge backed businesses and new KIB funds. We can offer extensive support with tax breaks available via the Enterprise Investment Scheme and the Seed Enterprise Investment Scheme. There are also co-investment funds to leverage syndicated deals as that it where we get the real value from angel investors. 

Angels Invest Wales

Importantly, the launch of Angels Invest Wales gives us all a fantastic opportunity to reach out around the country to inspire new investors and nurture experienced angels. This isn’t another traditional networking forum or just rebrand of xénos. It is an exciting new initiative with a wider remit that is focused on offering facilitation, support and guidance that makes a real difference to entrepreneurs in Wales.  Furthermore, their new digital investment platform is making it easier for businesses to showcase opportunities and has enabled them to take on nearly 60 new investors in the last year.

We know that angel investment works best when investors work together in syndicates to pool skills, share knowledge and balance risk. It generates more firepower. That’s why we will be working with Angels Invest Wales and the team at the Development Bank of Wales to encourage and mobilise lead angels and first time investors to build syndicates. 

The team will be linking Welsh entrepreneurs seeking finance and expertise, with business angels and syndicates, who are actively seeking to invest in the brightest and best opportunities Wales has to offer. It is an approach that is internationally recognised as supporting economic growth in a way we know can make a huge difference to the survival chances of businesses. 

Angel Co-invetment Fund

We then have the new £8 million Angel Co-investment Fund as launched recently by Ken Skates, Cabinet Secretary for Economy and Transport. I am sure that this will be an important and valuable addition to the business and wider entrepreneurial support system in Wales.

The new fund will give Wales a competitive edge; enabling the development bank to encourage syndicated angel investment and provide essential equity funding for ambitious start-up and growth companies in Wales. They’ll be able to match fund investment from£25,000 to £250,000 on a 1:1 basisalongside a support programme that ensures business needs are being met.

In fact, it is hoped that the Angel Co-Investment Fund will support up to 80 businesses and create and safeguard 375 jobs over the next five years by attracting and encouraging angel investment across Wales. 

Business angels invest in a wide range of sectors; healthcare and digital, e-commerce, biotech and pharmaceuticals and financial technology are consistently popular with 81% of all angel investments in the technology sector.  Irrespective of sector, a successful investment is always attributable to strong management, vision, integrity and commitment. It really is all about people and passion. We have plenty of that in Wales.