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Business Angel Investing: Awareness Seminar 4 th March 2010 Brewin Dolphin, Newcastle upon Tyne

Business Angel Investing: Awareness Seminar 4 th March 2010 Brewin Dolphin, Newcastle upon Tyne Welcome Dan Brophy Chief Executive, Entrust Introduction John Duns Divisional Director, Business Development & Marketing, Brewin Dolphin

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Business Angel Investing: Awareness Seminar 4 th March 2010 Brewin Dolphin, Newcastle upon Tyne

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  1. Business Angel Investing: Awareness Seminar 4th March 2010 Brewin Dolphin, Newcastle upon Tyne

  2. Welcome Dan Brophy Chief Executive, Entrust

  3. Introduction John Duns Divisional Director, Business Development & Marketing, Brewin Dolphin

  4. · One of the largest independent private client investment managers in the UK Over £20 billion assets under management Significant financial planning expertise Investment Banking Division with National coverage Corporate adviser to over 100 corporate clients and Institutional clients Did you know?

  5. Graham Thrower Board Member, North East Access to Finance

  6. Anthony Clarke Chairman, British Business Angels Association

  7. Angel Investing The Risks and Rewards

  8. Definition of a Business Angel “An individual, acting alone or in a formal or informal syndicate, who invests his or her own directly in an unquoted business in which there is no family connect and who, after making the investment, takes an active involvement in the business, for example, as an advisor or member of the board of directors”. Prof Colin Mason and Prof Richard Harrison, UK 2007

  9. Finance Ladder Exit IPO/Trade Sale etc CAPITAL NEEDS Formal Venture Capital HIGH RISK Co-investment Funds Business Angels Friends, Family, Neighbours LOW RISK TIME PRE-SEED SEED START-UP EARLY GROWTH SUSTAINED GROWTH

  10. The Market • UK Business Angels invest £750m p.a. • BBAA – 24 networks – 6,000 angel members • Approx 18,000 Angels (UK EIS statistics) • 2007 – VCs invested £434m in start-up/early stage • Equals 50% of angel investment • ---- • EU: £3bn – £3.5bn invested p.a. (EBAN 2008) • EU:50,000-75,000 angels; UK = 30% Europe market • US: £18bn invested p.a. • US: 225,000 angels; 10,000 invest in angel groups

  11. Syndication • Angels increasingly investing in groups to leverage level of finance required by Entrepreneurs and skills of angels • (£500k deal; 5-10 angels; each angel 30k average) - Lead Angel appointed) • US Angels investing in groups have average 27% return (ACA and Kauffman) • Angels Investing alongside VCs • 41% of early stage VC deals in UK were public and private sector syndications • 72% of US Angels have done deals alongside VCs • Co-investment funds • Increasing number of funds set up on side of networks to close equity gap and attract new angels to the market across Europe Trends in Angel investing

  12. NESTA-BBAA “Siding with the Angels”- May 2009 • Angel Investing = Most significant source of investmentin early stage companies - more than half of investments made were pre-revenue. • Business angel investment does carry risks - 56% of all deals not returning their stake money. • But ….. 22% IRR return overall • Shows importance of promoting Business Angel finance as an important Asset Class to wealthy and sophisticated individuals Recent Research on Angel Investing

  13. Recent Research:Angel Returns % of Exits Multiple Category

  14. Industry ExperienceAffects Outcomes % of Exits Multiple Category

  15. Due DiligenceAffects Outcomes % of Exits Multiple Category

  16. Board InvolvementAffects Outcomes % of Exits Multiple Category

  17. Build on Research results to promote awareness of angel investing across the UK regions – Promote recognition of this Asset Class • Recruit individuals with Business skills, expertise and Smart Money • Government (BIS) and RDAs backingthe campaign • Regional Awareness events – identify new Angel investors to join local networks • Build the capacity of new angels to be effective investors • Opportunities for wide range of agencies to get involved BBAA Campaign 2009-10

  18. High net worth or self certificated as sophisticated? • How much can I afford to lose? • My age and other commitments? • Active/Passive investor? • Single/syndicate investor preference? • My own skill sets/entrepreneurial background? • Sector preference/my experience? • Stage: Start up/ early stage/development? • Tax Planning: EIS Scheme Tax Breaks? • Marketability/location of investments? • 10x return on start up/early stage investing Angel Investors Checklist

  19. Thank you • anthony@bbaa.org.uk • www.bbaa.org.uk

  20. Investor Panel Anthony Clarke Alistair Arkley Chris Thompson John Josephs

  21. North East Angel Fund Jonathan Gold Operations Director, Rivers Capital Ltd & Chief Executive, Finance Tree Ltd

  22. North East based Corporate Finance and Investment Readiness training firm specialising in early stage companies with high growth potential • Jonathan Gold - CEO • London based VC firm • Manager of several UK funds • Run AngelNet • John White - CEO RCP is a joint venture between E-Synergy Ltd and Finance Tree Ltd E-Synergy Ltd is authorised and regulated by the Financial Services Authority As a parent of Rivers Capital Partners Ltd, E-Synergy Ltd will carry out all regulated business on behalf of RCP until it becomes independently authorised

  23. Fund Size: £7.5m capital • Deal Size: £50-£150k initial deal size, capacity to follow-on • Can do stand-alone transactions • Mostly equity deals with potential for gearing • Focus is generalist, likely to be relatively early stage • Looking for management ability, market size and innovative products • Process around 8-12 weeks – includes introduction to Angels • Responsible for stimulating Business Angel activity in the Region

  24. 16-18 Hood Street Newcastle-upon-Tyne NE1 6JQ 0191 230 6370 www.riverscap.com For more information contact: To join AngelNet contact: Natalia Blagburn Investment Executive n.blagburn@riverscap.com 0191 230 6370 Steve Garbutt Fund Manager s.garbutt@riverscap.com 0191 230 6370

  25. North East Business Angel Network Jane Ridley Head of Operations, Entrust

  26. Investor Forum • Showcasing high-growth knowledge based companies • A network which includes private equity and venture capital • investors, business angels, successful entrepreneurs, business • advisors and corporate financiers • 282 network members of which 123 are business angels • Presentation events take place 5-6 times per year involving 4 or 5 pre- • vetted investment opportunities • Since July 2007 we have showcased over 50 investment • propositions, helping businesses to raise in excess of £1m

  27. Legal, Tax and Regulatory Guide • Upcoming Events; • Business Angel Master Class – 25th March 2010 • Business Angel Master Class – 22nd April 2010 • Presentation Evening – 29th April 2010 • Presentation Evening – 24th June 2010 • Presentation Evening – 23rd September 2010

  28. Thank you to our host and sponsors:-

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