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Jenny Tooth comments on the latest UK Business Angel Market Report launched today by British Business Bank

The UK Business Angel Market 2020

Today sees the launch of the latest UK Angel Market Report from British Business Bank in collaboration with UKBAA. The report once again demonstrates the vital role that Angel Investment plays in the supply chain of growth capital to small businesses in the UK.

The report is based on a survey carried out at the end of 2019 prior to the pandemic, so it was agreed that a further shorter survey would be carried out in July this year to gain a better picture of the impact of Covid on the Angel community. It is clear from the research that the pandemic has presented new challenges to Angel investors over the past months, both in relation to their own personal investment capacity and with many businesses in their portfolios requiring support, with over 50% of our community having identified a negative impact on their investing. However, what is clear is that Angels have demonstrated throughout this period the important role they play in, not only bringing much needed capital, but providing business experience and strategic advice, drawing on their own experience of dealing with previous economic crises. The report shows that the Angel community has shown amazing resilience during this period with over half of our respondents having made at least one investment during the Covid period and with around 47% of Angels feeling positive about making new investment in the coming months.

The research results demonstrate the continuing disparities in levels of angel investment across the UK regions with over 56% of investors based in London and the South east and whilst we had a relatively low participation from regional angels in the survey, we must continue to conclude that many regions outside the Golden Triangle lack sufficient levels of angel investment. This situation was also corroborated by HMRC statistics on location of EIS/SEIS investors. It will be vital at this time as we seek to rebuild local economies and focus on levelling up that we increase the number and capacity of angels in the underserved regions to support the growth needs of small business. The BBI Regional Angels Programme is an important instrument in bringing much needed co-investment funds alongside angel investment. We hope that many more angel groups across the UK regions can take advantage of this in the year ahead.

UKBAA has for some time been working to increase access for female founders to angel investment and we have been focusing on growing the number of female investors as a key part of the solution. We are proud to have been a founding signatory of the Investing in Women Code which resulted from the Rose Review and pleased that many members of our investment community have also now signed the Code. It was good to see that more women investors participated in the research, but it would seem that the proportion remains at between 15 to 18%, so there is still considerable progress to be made to increase the number of female angel investors across the UK. It is also notable from the research that we lack many experienced women with capacity to act as lead Angels. At the same time, the number of angel investors from black and ethnic minority groups remains very low indeed, despite the fact that we are now identifying a number of new emerging black investor groups. Nevertheless, we know that many of our Angel groups have identified an increase in the number of women investors in their groups and several are taking direct actions to increase diversity, both in relation to their investments and in their investment base so we look to build on their work and achievements going forward.

We are extremely grateful to our members and those in the wider angel community who supported this research and generously gave their time to complete the survey, both in 2019 and the more recent one in July 2020. On behalf of UKBAA, I should like to thank the British Business Bank for providing this most valuable research report and look forward to our continuing collaboration.

Read the full report

 

UKBAA

By UKBAA08 Oct 2020