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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

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Presentation Transcript
slide1

Business Angel Investing:

Awareness Seminar

4th March 2010

Brewin Dolphin, Newcastle upon Tyne

slide2

Welcome

Dan Brophy

Chief Executive, Entrust

slide3

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

Did you know?
slide5

Graham Thrower

Board Member, North East Access to Finance

slide6

Anthony Clarke

Chairman, British Business Angels Association

slide7

Angel Investing

The Risks and Rewards

slide8

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

slide9

Finance Ladder

Exit

IPO/Trade Sale etc

CAPITAL NEEDS

Formal Venture Capital

HIGH RISK

Co-investment Funds

Business Angels

Friends, Family, Neighbours

LOW RISK

TIME

PRE-SEED

SEED

START-UP

EARLY GROWTH

SUSTAINED GROWTH

slide10

The Market

  • 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

Syndication

  • 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
  • Co-investment funds
  • Increasing number of funds set up on side of networks to close equity gap and attract new angels to the market across Europe

Trends in Angel investing

recent research on angel investing

NESTA-BBAA “Siding with the Angels”- May 2009

  • Angel Investing = Most significant source of investmentin 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 on Angel Investing

recent research angel returns

Recent Research:Angel Returns

% of Exits

Multiple Category

industry experience affects outcomes

Industry ExperienceAffects Outcomes

% of Exits

Multiple Category

due diligence affects outcomes

Due DiligenceAffects Outcomes

% of Exits

Multiple Category

board involvement affects outcomes

Board InvolvementAffects 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 backingthe 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

BBAA Campaign 2009-10

angel investors checklist

High net worth or self certificated as sophisticated?

  • How much can I afford to lose?
  • My age and other commitments?
  • Active/Passive investor?
  • 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

Angel Investors Checklist

slide19

Thank you

  • anthony@bbaa.org.uk
  • www.bbaa.org.uk
slide20

Investor Panel

Anthony Clarke

Alistair Arkley

Chris Thompson

John Josephs

slide21

North East Angel Fund

Jonathan Gold

Operations Director, Rivers Capital Ltd & Chief Executive, Finance Tree Ltd

slide22

North East based Corporate Finance and Investment Readiness training firm specialising in early stage companies with high growth potential

  • Jonathan Gold - CEO
  • London based VC firm
  • Manager of several UK funds
  • Run AngelNet
  • John White - CEO

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

slide23

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
slide24

16-18 Hood Street

Newcastle-upon-Tyne NE1 6JQ

0191 230 6370

www.riverscap.com

For more information contact:

To join AngelNet contact:

Natalia Blagburn

Investment Executive

n.blagburn@riverscap.com

0191 230 6370

Steve Garbutt

Fund Manager

s.garbutt@riverscap.com

0191 230 6370

slide25

North East Business Angel Network

Jane Ridley

Head of Operations, Entrust

slide26

Investor Forum

  • 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
slide27

Legal, Tax and Regulatory Guide

  • Upcoming Events;
  • Business Angel Master Class – 25th March 2010
  • Business Angel Master Class – 22nd April 2010
  • Presentation Evening – 29th April 2010
  • Presentation Evening – 24th June 2010
  • Presentation Evening – 23rd September 2010