Connecting For Growth: From Angel Investment To Successful Scale-Up

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UK Business Angels Association

02 February 2015

250 leading players from the angel and early stage community came together on 28th January, at Level 39 the hotspot of technology innovation at Canary Wharf, to share insights on the challenges of scaling the UK’s next wave of high growth entrepreneurs.

See the presentations:

Brett Akker, Founder, Zipcar – Going Full Circle

Andrew Mayfield, Head of Strategic Gowth, MTC – Business Launch Centre

Economic Research Centre – Nation of Angels Report Presentation

The Forum heard from some of the nation’s most successful scale-up entrepreneurs who are now going full circle by reinvesting their success to build the next wave of great growth entrepreneurs .

Brett Akker, spoke of the challenges in founding and financing Streetcar in 2004 with 2 people that sold to Zipcar in 2010 having scaled to 250 employees. Brett told his story of how he went on to found Lovespace in 2012, providing instant , flexible self-storage which went onto raise £1.6m through Crowdcube in 2014, alongside further investment from Smedvig capital. Brett has at the same time angel invested in a whole raft of exciting new businesses that he is now nurturing, including Farmdrop, Housekeep, Hubble and Yuno Juno.

Brent Hoberman CBE, one of the gurus of entrepreneurship told his story of co-founding Last Minute.com in 1998 going onto scale and sell it to in 2005. On the back of this success Brent came up with idea of MyDeco.com which went to list on AIM in 2014 and from which he spun out Made.com . Brent explained how he also recycled his success from Last minute .com to found ProFounders Capital , a highly successful early stage investment vehicle bringing his experience and direct investment to successfully accelerate the growth of businesses such as Get your Guides, the no1 we start-up in Berlin and the successful OneFine stay the UK’s answer to Airbnb. Alongside all of this, Brent also described his continued passion for connecting successful entrepreneurs across the world through the expansion of Founders Forum which he set up 10 years ago.

A key theme of the conference was the need for all key players in the ecosystem to connect up to provide the environment that businesses need to scale up and grow. This topic was debated through a panel of leading plays from the finance market including Tim Hames , Director General of BVCA, Marcus Stuttard, Head of AIM, Rajat Malhotra, Angel of the Year 2013-4, Wren Capital and Richard Gibson CFO, Swiftkey, the maker of smartkey board apps and one of the fastest growing tech businesses in the UK. We have seen a vast range of different finance and growth options have emerge over the past few years creating an evolution in the finance market place, but at the same time offering a much greater flexibility for small businesses to support their growth. However, he warned that there was a need to ensure that the benefits of these new finance and structural developments were reaching businesses outside London and the South east whilst stressing the importance of future governments to maintain certainty for the early stage investment players through maintaining the valuable tax breaks through EIS and SEIS.

The significant role that angel investment plays in providing the essential early finance and nurturing to enable these innovating businesses to grow was reinforced by the launch also at the Forum of the results of the biggest survey of the angel market to date: Nation of Angels commissioned by UKBAA and Centre for Entrepreneurs and carried out by the Enterprise Research Centre, and backed by BVCA, Deloitte ,Barclays and ESRC. The research revealed the considerable impact that angels are having on the growth of their portfolio businesses with angels expecting that 45% of their investee companies to achieve good growth with 19% expected to achieve high growth. At the same time angels are found to be not investing alone with a large majority co-investing alongside other angels or other finance sources including VC (23%), debt finance (23%) and increasingly alongside crowdfunders (43%).. The research also bore out the fact that many angels investors were younger many under 50 years of age and with a changing profile with more women investing than ever before and sings of an emerging interest in investing among wider ethnic minority groups.

The impact of the lead angel in supporting successful scale up was presented in a short video presenting the reflections of a number of experienced lead angels This was further underlined through a panel of highly experienced angels , both in mobilising the angels into syndicates and supporting the relationships in the pre-investment process, but more importantly their role as business builder and bringing real value to the successful scale up and growth of the business. Kit Hunter Gordon , experienced angel and MD of the Summit Group said that he lead angle plays a key role in helping to keep the business on the growth track, keeping the team moving forward and focusing on growth. George Whitehead Octopus venture partners and Chair of the Angel Co-Fund felt that the most important role was in ensuring good communication links were maintained between the management team and the investors.

Peter Cowley, UKBAA Angel of the Year 2014-15, Cambridge Angels, felt that the lead angel’s role was to bring strong strategic support and governance to help the business to restructure as a growth business. Hannah O’Shaunessy, an active angel investor, felt that the real skill of the lead angel was to help the business to understand how position itself and reformulate the vision as growth business, including linking the business to other key players that can help to support the scale-up strategy.

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