Why hy th the e Bus Busines iness s Ang Angel el Mar Market et an and d See Seed d Capita Ca pital l ne need eds s Pub Publi lic c Sup Suppo port FOURTH ANNUAL EBAN CONFERENCE 13 th November 2003 Anthony Clarke Managing Director One London Business Angels (OLBAN) London Seed Capital
OLBAN Not for profit BAN which is part of London based GLE Group Est. 1987; 200+ Reg. Angel investors. BAN raised over 1.5m EUR equity for SMEs in last six months. To date no public sector support Sister company London Seed Capital www.businessangels-london.co.uk
London: Early Growth SME Funding Scene British Venture Capital Association has 161 full members. Over 6 billion EUR invested by them in UK in 2002 Average investment of 5m EUR. Venture capital investment in start up/early stage SMEs almost non existent. Little VC appetite to invest below 1m EUR Deal size considered uneconomic and too risky for institutional investors. www.businessangels-london.co.uk
SME Equity Provision< 1m EUR Regional Venture Capital Funds Business Angel Networks Business Angel Co investment Funds University Seed Funds A small number of specialist VC’S and seed funds
Regional Venture Capital Funds Currently being established throughout UK Typical fund size circa 50m EUR 25% Public Sector subordinated funding Investment in SME up to 700,000 EUR Maximum initial investment 350,000 EUR Exits sought within 3-7 years
Business Angel Co Investment Fund London Seed Capital UK Govt. Funded. Angels match Launched Dec. 2002. 4 deals funded 4m EUR to invest. Max initial investment 150,000 EUR Fund invests on same commercial terms as angel investors
Why Angel Co Investment Funds? UK Government now establishing 6 Regional funds in UK Funds stimulate Angel activity Low cost model alongside BANs Fund encourages Angel Syndication LSC invested 600,000 EUR in 4 SMEs + Angels investing 1.2m EUR
Public Support to BANs? Angels invest in Equity Funding Gap. UK Angels activity trebled 1999-2001 BANs struggle to break even Accredited/proven BANs need public support to increase investment activity Public support to stimulate angel activity is cost effective for public sector Public funding for OLBAN’s Investor Training Programme
Seed/Early Growth Funds Sustainability Reg. Venture Capital Fund and Angel Co Investment Fund Models not yet commercially proven Public funding support key to introduction of both funding models Both models designed to earn a commercial return Jury is out!!
Anthony Clarke Managing Director OneLondon Business Angels & London Seed Capital c/o GLE Group 28 Park Street, London SE1 9EQ www.olban.co.uk
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