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THE ANGELS OF THE CITY
By Sam Enrico Williams 2012-04-16 19:51:15 | |
(TRAMP Magazine) - 
CITY OF LONDON CORPORATION CREATING ANGEL INVESTORS TO PROPEL GROWTH IN TECH CITY
Last month saw the first workshop in the new Angels in the City scheme, which aims to create a pool of 125 new Angel investors and secure £10m of Angel investment per annum for around 40 start ups in and around Tech City.
This Government backed area of East London is home to an exponentially growing number of SMEs – 400 start-ups have opened there in the past year sitting alongside major employers such as Google and Cisco – making Tech City a beacon of potential UK economic growth. At the workshop, successful Angel investors shared their inside knowledge and expertise with affluent individuals drawn from the Square Mile interested in learning the tricks of Angel investment.
Spearheaded by the City of London Corporation and delivered in partnership with London Business Angels, Angels in the City will teach affluent individuals how to be a savvy Angel investor, from how to get the best return on your investment and take advantage of tax breaks and incentives, to how to negotiate the best deal and what to look for in an investment opportunity. Once ‘trained’ the new Angels can take this knowledge and invest, potentially seeing an excellent return on their investment. Through Angels in the City, they will be introduced to Tech City investment opportunities at pitching events.
The City of London Corporation is both funding and driving the scheme by utilising its extensive range of contacts to identify individuals who have the capacity to be Angel investors and encouraging them to participate in the free scheme. According to Stuart Fraser Chairman of the Policy and Resources Committee at the City of London Corporation, “Angels in the City will tap into the privately held wealth within the City and use it to benefit technology start-ups to help build the next wave of companies.”
For the investor, Angel investment can offer a smaller scale and more accessible alternative to private equity investments albeit at a higher risk; some say up to half of investments do not succeed. Investors can invest as little as £10,000, a very small figure relative to more traditional private equity investments. There can be a higher rate of return on Angel investment but over a number of small investments. Angel investor, Sandy Black, for example, supports around 15 small businesses to varying degrees and typically invests between £30k and £150k per enterprise.
According to Black, “Angels in the City will help potential Angel investors overcome possible boundaries such as the sometimes disproportionately high costs of legal and other due diligence advice.” Whilst Black comes from a legal and financial background, for others without this kind of experience or particular technology or service expertise, he says it can be more difficult. “The scheme will allow potential Angels to pool their money and expertise through associations and syndicates.” This can be beneficial to start-ups as it can gain them access to a wide range of expertise and experience to benefit their business.
To support Angel investors and encourage this kind of early stage business investment, there are generous tax incentives available through the new Seed Enterprise scheme and the Business Angel Co Investment Fund announced in the Government’s Autumn Statement. Eric van der Kleij, CEO of the Tech City Investment Organisation, the body charged by the Government with developing the region, notes, “Entrepreneurs Relief and R&D Tax Credits help to boost confidence among both entrepreneurs and investors alike. Angels in the City is directly sending a welcome message to City of London and other investors to roll-up their sleeves and work with us to help create the next generation of tech and digital growth businesses.”
Angels in the City comprises a rolling programme of workshops and roundtable events taking place over the next 18 months, providing insight into the Angel investment process, risks and rewards, and how to take advantage of tax breaks with experienced investors offering top tips. Three pitching events, where London Business Angels will facilitate face-to-face meetings between new Angel investors and innovative entrepreneurs from Tech City and the surrounding areas, are already scheduled for May 2012, November 2012 and February 2013. The next introductory workshop is taking place on 7 February 2012. For further information regarding Angels in the City and participating, please refer to the website: www.cityoflondon.gov.uk/angelsinthecity Click here to continue reading.... | |
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