UK business angels are stepping up their level of investment in start-up companies, according to the latest annual report on business angel activity produced by the British Venture Capital Association (BVCA). Total investment of £28.3 million by registered business angels is recorded for the year, this is equivalent to a 40% increase in value terms on the previous year and a 16% increase in the number of deals, which reached 224 in 1999/2000.
The growth is encouraging, given the importance of business angels, already demonstrated by their dominance in the US. The figures recorded by the BVCA are, by the nature of the activity, likely to represent just a portion of the picture. In calculating its figures, the BVCA contacted a number of the networks listed in the UK business angels directory, which provided the BVCA with the investment data collected from members.
Of the £28.3 million figure, £13.8 million was invested in the technology sector in 101 deals and £11.4 million was invested in 94 manufacturing companies. Seventy-three per cent of business angels invested sums of less than £100,000 and the average investment in 1999/2000 was £55,000. Seed, start-up and early stage capital accounted for 59% of all investments and received £14.7 million. Scotland, Wales, the North East and South East of England saw the most business angel investment.
Since 1993 the number of business angel networks in the UK has almost trebled and the amount invested by registered business angels has increased more than fourfold.