UK ANGEL INVESTORS
Most Angels invest in 5 companies or fewer in any given year and expect to hold their investment for 3-5 years. EIS/SEIS require an investment to be held for at least 3 years to qualify for the tax benefits.

Angel investors bring ‘Smart capital’, who offer extensive business experience, alongside financial capital, to support the successful growth of small businesses in the UK. Business angel investment represents ‘smart capital’, as the value of the investment to the business extends beyond the finance.

41% of angel investors have increased their level of investing in the 2016-17 tax year. With 69% identifying strong growth and scale-up of their investee businesses, exceeding their expectations.

An Angel Investor needs to be one of the following...

01. Certified High Net Worth Individual is either...
  • has a net income in excess of £100K
  • or has net assets in excess of £250K beyond their pension fund assets and private residence

Or

02. A Certified Sophisticated Investor must be one of the following
  • A director of a company turning over at least £1 million within the last two years
  • Have made more than one investment in an unlisted company in the last two years
  • A member of a network or syndicate of business angels for at least six months
  • Have worked in the past two years in a professional capacity in the private equity sector
  • or in the provision of finance for small and medium enterprises

% Angels investment decision making

The entrepreneurial team has the relevant skills/experience
Shows potential to achieve growth and scale
Expected returns
The valuation was realistic
Strong potential for being disruptive
Recommendation from a trusted source
Can contribute skills/experience to the business
The exit route and timing are clearly identified
Introduction to Angel investment
Angel investing has been recognised as the most significant source of equity investment in startup and early stage businesses seeking to grow.

Investors would normally take shares (an equity stake) in a business in return for providing a cash injection to to help the business grow. They not only provide funds, but also bring their experience, knowledge and connections to help speed up the growth rate.

Individual investors invest either alone, or as part of a syndicate (a collective group of investors). Angels differ in their appetite for certain deals, and usually invest between £10,000 – £500,000. Deals of up to £2m are becoming more common, due to syndication.

Angel investors seek to gain return of 7x - 12x on their investments as they are aware that some of their investment will fail but for the few that exit and sell, this usually make up for the failures.

Angels typically keep their investments over a period of 3-5 years.