Venture Giants Awarded
Number 1 Angel Investment network in the UK
Awarded from Angel Investor News (www.angel-investor-news.com) in May, 2010
The quality of angel investment networks in the UK has greatly improved since 2000. As an award winning Angel investor news service, we have been keeping an eye out on the progress that these angel investment networks have been making during this time.
When Angel Investor News set out at looking at the best Angel Investment networks in the UK we were specifically seeking Angel Investment networks that were created to take the entrepreneur and investor investment matching process to an innovative new level and provide a more intuitive, user friendly and more streamlined delivery of proposals to investors. Though we were restricted in our search and could not look deep into the investment networks angel investor database, we were able to scrutinize and look into the involvement and ease of registering as an Investor on each of the sites.
Although regulatory issues were not necessarily within the scope of this nomination, and although somewhat of a grey area in the UK, the general consensus is that any equity or financing agreements that are consummated as a result of any contacts made via an online matching service, that only provides initial matching and contacts, are considered "exempt distributions" as defined by the various securities commissions in the UK. The question really lies upon the integrity of the registration process (on both sides) and the ease that this is accomplished on the website.
Whilst we were looking at the angel investment matching services it is important to note that we did not take into account the size of the company, or view companies house accounts, turnover or amount of staff employed. Instead we were specifically looking at long term potential of leading the angel investment industry forward.
We found that Venture Giants were one of the few angel investment matching services that had an extremely secure registration process and we were impressed at Venture Giants' pursuit of verifying the information that an investor provided during his/her self certification registration. Surprisingly, we received a telephone call and were were asked to disclose some documents before our investor application could be fully activated! In contrast to this, we found other angel investment networks simply approving our account just from the details we supplied online. Yes in this case we were suitable for self-certification, but we found that the due diligence process carried out by Venture Giants was much needed within a fairly unregulated industry especially for the protection of entrepreneurs that choose to use an angel investment service such as this.
There is little doubt that the future of angel investing is only going to increase in size and volume. Banks are making it more and more difficult for start up entrepreneurs to obtain financing and the current problems with the sub prime housing markets, many entrepreneurs are finding their only alternative to start up funding is through family, friends or angel investors.
There is also an increased awareness of angel investing as a result of television shows such as BBC's Dragons' Den. These shows directly promote the involvement of anyone with enough extra money to get involved in innovative and unique companies requiring investment capital.
Entrepreneurs seeking investment capital and investors willing to make angel investments are not something new but it is still considered to be in the infancy stages in the UK and many other parts of the world. The US is the leading country in the world in this activity and in 2007, over $26 billion in 57,000 companies was invested, a 12% increase from 2006. This number is likely even much larger as only the organised groups would have been used to calculate this figure. Clearly, the trend will continue and the need will increase for both entrepreneurs and investors.
In order to fully understand the investment matching industry and markets, Angel Investor news looked at all of the players involved in all levels. This included analyzing:
Government Schemes - The Enterprise Investment Scheme or any government investment program or scheme is not necessarily aimed at direct investment but rather a complimentary program to assist private investors and start up companies. The government does not get directly involved with matching entrepreneurs and investors and this would not happen in the future as it would create a huge conflict of interest with free enterprise.
Organised Angel Investment Groups - There are estimated to be approximately 22 organised angel investment groups in the UK. Some of these fall under the "not for profit" category and mainly done so to appease the FSMA regulations concerning promotion and marketing of business investments. All of these groups however generally bring together a member based group of investors to directly invest into early stage and mezzanine financing type of deals. Groups usually invest as a collective team and unanimously select one or several companies a year.
Online Angel Investment Matching Services - As with many online companies, some are very small and some are very large. The advantages and disadvantages of this are that just about anyone can launch a company that can come across as professional, credible and of value. The reality with online angel matching services is that there are in fact some very poorly developed and operated ones but also a few in which they have more sophisticated software engines and doing a good job of accomplishing what they were created to do.
These groups are an important part of the overall industry and do a great deal to the UK spirit of investing. The downside however is that since they directly invest into only a few deals per year, many entrepreneurs are still left out and the investors don't have adequate time to properly review and assess that many deals.
Angel Investment Matching services carry the most amount of responsibility especially to entrepreneurs seeking Angel Investment, and we hope that these nominations will only encourage Angel Investment Matching services to improve the industry and offer more to entrepreneurs that choose to use these services.