I was really excited to be at the UK Business Angels Association National Investment Summit earlier this July.
If you’ve not heard of it before, the UK Business Angels Association is the national trade association representing angel and early stage investment in the UK. It’s an organisation that KPMG is proud to work with, and most definitely one I’d recommend you follow.
As a trade association, the UK Business Angels Association represents all those involved in the angel investment market, with a view to ensuring a coherent ecosystem for financing the growth of start-up and early stage businesses. I was at the annual National Investment Summit in London on 3rd July, along with numerous angels, entrepreneurs and businesses from multiple sectors and the UK.
The first point of discussion was the results of a recent pulse survey of angel investors.
The survey showed that internet and consumer focused companies were receiving the most funding – at 50% of all angel investment. Media, HealthTech and CleanTech companies were also able to attract funding, while manufacturing and business services struggled.
Geographically, the survey revealed 54% of all investments were in London and the South East, with the South West and Midlands receiving 13% and 11% respectively. This sparked considerable interest from the audience – I’d say about half were not London based. Several people commented on the need to spread investment more evenly to reflect the great opportunities found across the UK. However, one London based angel noted that, if anything, even more should be invested in to London. He ventured that we should work to make London a true global leader for start-ups and innovation and to do this we should focus even more on the London region.
EIS (Enterprise Investment Scheme) and SEIS (Seed Enterprise Investment Scheme) were particularly popular topics. Around 80% of participants saw them as being beneficial, however some were concerned that the tax breaks promoted “bad investment habits”. Which bad habits, you might be asking yourself? The concern was that if people invest for the tax breaks – instead of tax breaks being a fringe benefit – there’s a danger they’ll make poor investment decisions. Overall, around 75% of investors saw EIS and SEIS as a significant part of their investment decision. Requests reflected this – multiple people asked for the £150k SEIS limit to be raised. Rt Hon Michael Fallon MP, Minister for Business and Enterprise said that Government is reviewing the EIS and SEIS limits but that there were no immediate plans for changes.
Crowd funding was another popular topic of discussion. Many angels and VC’s (Venture Capitalists) were worried that crowd funding is pushing company valuations up to unrealistic levels. This could have a knock on effect when companies grow and look to VCs for the next round of funding, by which time their valuations may actually decrease. That being said, crowd funding was seen as a positive development that is currently still finding its place, albeit one that will likely need greater regulatory control in the future.
Despite the drama of Wimbledon being played out at the same time, the summit successfully brought together stakeholders from multiple sectors and geographies.
For me, personally, the summit highlighted the growing success of angel investors, but also showed there is still a lot of untapped potential. I left feeling motivated to help realise this potential.
Were you at the summit? If you were, tweet me @jonathanroomer and tell me what you thought.