Angels Invest Wales Director Steve Holt reflects on the company’s first year and their drive to work with new Lead Angels

Author

UK Business Angels Association

25 October 2019

Steve HoltsAngels Invest Wales is the biggest angel network in Wales connecting experienced investors with Welsh businesses seeking private investment. Part of the Development Bank of Wales, the organisation was set up in 2018 and in its first year it made 22 separate deals to the value of £3.25 million.

Director Steve Holt explains that part of Angels Invest Wales’ role is to offer a support mechanism for SMEs. “We work with SMEs and entrepreneurs that want to grow their business. We then link them to suitable business angels or (if required) introduce the client to the other ‘investor readiness’ support mechanisms that are available in Wales.”

An online investment platform is used to match investors and businesses. Businesses are able to upload deal information to the platform that is showcased directly to registered high-net-worth individuals. When the platform launched, there were 90 investors on board and within 12 months that has risen to over 160.

Wales has many strengths in a number of sectors, good examples are Insurance and Financial and Professional Services with comparison sites being a particularly strong area for the country. Cardiff is making strides in FinTech while Health, Life Sciences and MedTech are buoyant across the whole of Wales. The creative industries, particularly TV, film and animation, are strong too particularly around Cardiff Bay and Swansea.

Breaking it down further Steve shares, “Wales is attracting Financial and Professional Services who are developing ‘back office’ service projects – these are typically regional expansions of bigger players or FinTech start-ups looking to grow. This activity spins out into investment opportunities and bright individuals coming out of those companies and starting their own businesses, embedding themselves in the economy and creating further jobs along the way.

Development Bank of Wales’ £8 million Wales Angel Co-Investment Fund (also launched in the last year) is a key offering to develop the Angel investing eco system in Wales. Operating over 4 years, the fund supports the creation of angel networks and syndicates by providing match funding and equity up to £250,000 per project to ‘lead’ investors looking for co-investment and additional investment ‘fire power’

With half a dozen lead investors appointed already, Steve says the objective for this year is to increase that cohort and continue to expand small angel syndicates capable of investing across Wales’s business landscape.

“This year the focus is absolutely on finding a few more strategically chosen lead investors, who can generate new investment opportunities. The companies seeking investment have to be in Wales, but the lead investors don’t as long as they’ve got the ability to build a syndicate and as long as that syndicate is going to invest in a Welsh-based business or a company.”

Finding a good lead investor isn’t as straightforward as you might think. The individual needs to have certain qualities and traits in order to successfully take on the role.

Steve elaborates, “The best lead investors are the ones with an obvious track record of personal investment – but also the work ethic and time to pull a syndicate together. They have to be natural leaders and ideally will have the right kind of character that others gravitate towards and co-invest alongside.”

“This year the focus is absolutely on finding a few more strategically chosen lead investors, who can generate new investment opportunities. The companies seeking investment have to be in Wales, but the lead investors don’t as long as they’ve got the ability to build a syndicate and as long as that syndicate is going to invest in a Welsh-based business or a company.”

Establishing Angels Invest Wales hasn’t been without its challenges. “The very first challenge last year was to expand the network and convince new angels that we had good quality angel investment opportunities.

It felt relatively subdued in Wales for angel investing so we were starting from quite a low point. Some of them were cynical that engaging with our service was worth their valuable personal time and money.”

“We had to build a little bit of trust with them in the first year to show that the opportunities on offer were worth pursuing and of a decent quality. As a team we were very much selling the concept of the new angel network and the platform.”

One of the challenges that is not unique to Wales was to change perceptions and remove the mystique around angel investing. One of the key things they’ve focused on is simplifying the concept and removing some of the perceptions that TV shows such as Dragons’ Den have given the industry.

“The angels in our network, obviously want to be successful and want to make money but they are really, really interested in having involvement with and developing companies in Wales. They are motivated by the desire to ‘put something back’, having had a successful career in business themselves prior to taking up angel investing. Empathy is the key word.

I think the humanity of that, when you introduce an entrepreneurs to an angel and they realise, ‘they’re not here to criticise me, and they’re here to help’. That’s very rewarding because you can see the chemistry unfolding and a partnership developing.”

What’s next on the agenda for Angels Invest Wales? Steve says that having worked with the platform and their network for the past 12 months, it’s a case of fine-tuning moving forward to ensure that the right sectoral opportunities reach the right potential angel investors as quickly as possible. Being ‘fleet of foot’ and maintain a focus on quality is the priority for Angels Invest Wales as it seeks to facilitate and encourage further investments and grow its investor network.

For more information about Angels Invest Wales please visit https://developmentbank.wales/other-services/angels-invest-wales

Want to learn more about angel investing? Enrol in our The Effective Angel Investor E-Learning course at https://bizangels.thinkific.com/.

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