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Tag: networks

Join the angels

If you’ve ever thought of becoming an angel investor, the new Be an Angel web site, launched today, is hosted by the British Business Angels Association, and has been designed to provide you with the information and resources you will need before making your first investment.

The launch of the Be  an Angel web-site coincides with the launch of Lord Young’s Enterprise report “Make Business Your Business” being launched today and a new £82m loan scheme for young people seeking to set up a new company.

It’s aimed at raising awareness  and encouraging individuals to become Business Angels,  giving detailed information and advice about the overall angel investing process and identifying the risks and rewards. The site also includes new downloadable fact sheets  on due diligence as well a  newly revised legal precedent documents and a new revised guidebook on technical and regulatory issues related to Angel investing. It also includes quotes from angels (including yours truly)  about why they became angel investors and encouraging others, as well as entrepreneurs that have received angel investment.

I’m welcoming of this online initiative, together with the enthusiasm that the government is showing for upping the rate of formation of new businesses.  In the end though, it’s up to us as individuals to decide whether we want to back these businesses with our hard-earned cash.

Breakfast at Number 10: Part 1 – Encouraging investment

‘Angels, your country needs you!’

Well it wasn’t ‘Breakfast at Tiffany’s’ although there was plenty of silver on display. I was invited to a business summit for angels and entrepreneurs at Number 10 Downing Street on Friday.  I suspect that my inclusion on the guest list resulted from interest in Qi3 Accelerator’s new model for investment in High Value Manufacturing businesses.

David Cameron spoke about his drive to make the UK a great place for companies to attract investment and grow. Like Kitchener, he exhorted us with the words ‘Angels, your country needs you!’ Having just climbed the famous staircase featuring portraits of all 73 of Britain’s Prime Ministers, it was clear that this was a place in which such a statement should be taken seriously.

He went on to highlight the tax incentives for investors introduced over the past 2 years:

  • increased the rate of income tax relief for the Enterprise Investment Scheme (EIS) to 30 per cent to encourage more equity investment in start-ups;
  • doubled the investor limits to £1 million per year from this April;
  • launched the new Seed Enterprise Investment Scheme (SEIS), which provides 50 per cent rate of income tax relief for individuals who invest in new early stage businesses; and
  • from April, for one year only, to kick start the scheme there will be a capital gains tax holiday, so gains can be re-invested into start-ups and be exempted from capital gains tax.

Whilst I’m not yet fully convinced by the details of SEIS, there’s no doubt that a 50% income tax and 28% capital gains tax relief makes for an extraordinarily generous attempt to kick-start seed investment at the £150k level.  I shall certainly be looking for an Accelerate to Investment seed opportunity right now.

There were numerous questions from the floor about the details of the EIS tax relief. This is a superb scheme, but definitely requires simplification and specific extension to enable investor directors to benefit from EIS-able share options.

Lord Young in his talk emphasised that now is a great time to start up and grow businesses. I heartily agree with this perspective.  Whilst others are locked in corporate stasis and gloom, it’s the time for up and coming businesses to defy recession and go for growth.

Other speakers introduced the Angel CoFund, Business Coaching for Growth programme and the Business Growth Fund, which is aimed at growing businesses that have already reached £5m annual revenues.

Of course the real-life war stories from Giles Palmer (Brandwatch) and Dale Murray (BBAA Angel of the Year 2011) brought humour and reality to the morning. I especially noted Dale’s remarks on a ‘bad angel’ who had sought to seize control of her business.  The event was attended by several MPs and ministers including David Willetts (Universities & Science) and David Gauke (Treasury).

Whilst the event tried to cram an awfully big subject into a 3 hour session, the politicians impressed me with their openness and willingness to listen. They repeatedly encouraged direct input to Lord Young’s programme.  It was evident that the newly launched Angel CoFund, the Business Growth Fund and the new Seed Enterprise Investment Scheme are all direct outcomes of input from the British Business Angels Association and other bodies.  Anthony Clarke at LBA/BBAA has clearly maximised the lobbying power of this community, amongst a bewildering array of angelic acronyms and organisations.  Somehow, even Angela Knight, the voice of the British Banker’s Association (BBA), seemed to think that banks have something to offer through mentoring, if not money.

Even more important was the understanding that finance and tax incentives are necessary but not sufficient to kick start this part of the economy.  Companies need to be able to access the skills and support of experienced businesspeople and specialist mentors if they are to be able to recognise and achieve their full potential.

Connecting Cultures

‘You’re more than a networker, you’re a connector’ was the praise bestowed upon me this week by a business associate.

I initially wasn’t sure whether to take this as a compliment or an insult, as I hadn’t understood the difference between the two.  So when I returned to my desk I looked it up.

Networkers are ‘me’ focused, making connections as a means to an end. Connectors are ‘you’ focused, insatiable resource investigators who just love making connections between people because of an innate desire to help others.  The outcomes may be the same, but the personal motivation is different, and clearly evident to others.

Some of my best moments over the past 12 years at Qi3 have been the realisation that astronomers could contribute significantly to the computer games industry or that techniques for manufacturing telescope mirrors could be applied to orthopaedics. My many years of association with CERN were dominated by a hunger to find the next world wide web or high energy cancer diagnostic or therapeutic modality.

Whilst I wouldn’t describe my every move as altruistic, I am driven by my enthusiasm for business, and especially for making seemingly weird connections between the worlds of physics / engineering and industry.  I bridle at suggestions that words like ‘passion’, ‘enthusiasm’ and ‘fun’ aren’t grown-up business terms.  If growing up means that I have to be dead-pan, I’d rather stay young!

Can you discover your enthusiasm for helping others around you, and feel the karma flow?

Qi3 Accelerator leads syndicate investment in Phase Vision

It always takes far longer to close a deal than I imagine at the outset. There’s always some hiccough or another that introduces a few weeks of delay.

Anyway, I’m delighted to be able to confirm today that Qi3 Accelerator, working with existing investors Octopus Investments, has completed a £1.5m investment in Loughborough-based industrial inspection business Phase Vision.  I’ve joined the board as a non-executive Director, to support the development of the business in the aerospace, automotive and nuclear markets, and to represent our substantial Business Angel consortium.  Our syndicate comprises a wide range of Cambridge, London and East Midlands based investors.  Great task sharing between Tim, Paul and me, together with support from other investors, made this a real team effort.  Most importantly, the management and staff at Phase Vision have been a pleasure to work with throughout, seemingly unflappable in the face of our persistent questioning.

And this is why we started Qi3 Accelerator; to find great British engineering companies and provide them with the financial and management support they need to accelerate their development.  Phase Vision offers for me the perfect combination of a strong team, a super product that benefits efficient manufacturing and reduces environmental impact, and global export opportunities.

I’m sure there will be plenty of problems along the way – it’s a risky game investing in High Value Manufacturing, particularly in the midst of a prolonged economic downturn.  But in life you have to choose whether to be a spectator or a doer, and I hope to see Phase Vision do well.

Ready to invest?

I attended a 3 hour session on angel investing organised by London Business Angels (I’m a member now).  Most of the afternoon covered familiar ground, but the scary part was the detailed exposition of the lists of items to be covered in due diligence.  Of course I like to think that I’m reasonably thorough in these things, but it’s clear that the world of angel investing is more generally populated with people who are happy for somebody else to do the due diligence and structure the deal, leaving them with the job of writing a cheque and chasing the share and EIS3 certificates.

I can see why.  The checklist presented in this afternoon’s session took me back to my corporate venturing days, when I had the time to spend months with lawyers dotting the ‘i’s and crossing the ‘t’s on warranty clauses.

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