The UK business angel market is one of the most developed in Europe, but just who are these angels? What are they investing in? And what effect what do their activities have? Asks Steve Mullins. Well, for one, there are increasing number of female angels doing their thing in the UK – though they still make up no more than 14% of the total – and there has also been a rise in the number of younger angels (16% are aged under 35). And that means, Brit angels now have less experience than previously, according to the Nation of Angels research from the UK Business Angels Association together with the Centre for Entrepreneurs.
In the 12 months to April 2014, each angel had made, on average, three first-round investments, with the highest number being 36. Unsurprisingly, two-thirds of angels are located in London and southeastern England, though close to 60% do invest outside their home regions. Pretty much all angels make investments in the UK, with 22% having invested in overseas businesses.
As to the type of activities they invest in, they range from tech, naturally, to manufacturing and services. The top five sectors for investments are professional services, healthcare, ICT software, food and drink, and digital media, with retail and e-commerce, financial services and leisure also in the frame. Close to 70% of angel investors are putting their money into technology-intensive businesses, while nine out of 10 have investments in other non-technology-intensive sectors, within their portfolios.
However, over three-quarters of angels investing in the gaming, fashion and design, film, security, social media, and digital media sectors are located in London and the south east. In other regions, there is a low level of investment in creative industries.
One-quarter of angels invest in ventures which have a social impact, with social investments accounting for almost 24% of total investment deals. Social-impact investments are more likely to be undertaken by less-experienced angels - almost two-thirds of such investments are made by those with up to five years’ experience as an angel.