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A new British-South Asian low-cost and long-haul airline, flypop, has raised £80,000 in SEIS funding through Angel Investment Network.


We gained a great deal of interest for the successful SEIS raise in Q1 2019 and hope this momentum carries on with the many global angels on the AIN platform. The low-cost non-stop aspect really resonated with a lot of investors from South Asia. They make these journeys frequently themselves and could really relate to this product.

Nino Judge, Founder offlypop

The airline focuses on point-to-point direct flights from the UK to secondary cities in several South Asian countries, starting with India. 
The list of affordable non-stop flights will be between the UK (initially London Stansted) and the Indian cities of Amritsar (Punjab) and Ahmedabad (Gujarat).

Targeting the 1.5 million Indian diaspora in the UK, flypop‘s service will offer return ticket prices from £350 (including taxes) with the first flights taking place in Q4.

The experienced founding team, with backgrounds including Ryanair, Team Lotus F1, British Airways, Emirates, JP Morgan and UBS, have stated that
flypop will be able to pass cost savings back to consumers via lower airport charges to tier 2 airports and its unique ‘wet’ lease start-up agreements.

There are ambitions to expand further from North America & Europe to South Asia via the UK and the business is now looking to raise £4m in its next EIS funding round. The team at flypop also intend to make the airline carbon neutral, offsetting each passenger that flies with the planting of a tree in a forest in the UK or South Asia.


Airlines still have an exciting allure to them and it was hugely exciting for our investors to invest in an SEIS round for one.

Ed Stephens, Head of Investor Relations at Angel Investment Network:

Good luck to Nino and the team! We will be following their progress with interest.

The post New low-cost airline Flypop completes SEIS funding on Angel Investment Network appeared first on Angel Investment Network Blog.

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Investors really really want to invest in Emma Bunton: £420k raise for Kit & Kin fastest in Angel Investment Network history

The commercial magic of the Spice Girls remains as strong as ever, as Emma Bunton’s ethical baby product business Kit & Kin, was responsible for the fastest raise in the Angel Investment Network’s 14 year history. It achieved its target of £420k in just one week.

Spice Girl, Emma Bunton, Founder of KIT & KIN

More than £1m was offered in total for her eco-friendly nappies, wipes and skincare business but Kit & Kin decided to only accept £420k at this time, an amount which included a key strategic investor.

The raise received unprecedented interest from our 170,000 strong worldwide community of investors. The business was launched in 2016 by Bunton and business partner Christopher Money, with their products available through high street retailers as well as their e-commerce platform. The investment will be used for staff, expansion and stock supply to service larger orders.

According to Mr Money: “The raise via the AIN has certainly surpassed all expectations and we ended up having to cap the number of discussions. We’ve come away from the raise with a select few who will bring significant strategic value that will certainly strengthen our offering and help us realise our potential over the years to come.”

Money and Bunton will be hoping to emulate the success of another celebrity turned entrepreneur, Jessica Alba, whose business, The Honest Company, floated for just shy of $1 billion in 2017.

According to Ed Stephens, global head of brokerage at AIN: “The level of interest for Kit & Kin’s business was unlike anything we’ve ever seen. It would normally take around 6 weeks to raise a similar amount – we had pledges for over one million and had to turn investors away…”

As a business it has some great fundamentals, but clearly Emma Bunton’s extra spice was a key ingredient.

Ed Stephens, Global Head of Brokerage

Bunton was famous for promoting girl power and her business was promoted through a new section on our site focused on supporting female founders and investors. This initiative was set up to address the under-representation of women as investors and founders in the industry.

The Spice Girls (1997)

Our investor community in the UK consists of around 17,000 angel investors, but less than 10% of these are women. We want to lead the way in tackling this industry problem starting with increasing the visibility of women-led businesses and helping them to find investment and mentoring from investors.

Here’s a few of the press publications that leapt upon this story (enjoy the headlines):

http://www.cityam.com/275884/baby-spices-baby-startup-kit-kin-breaks-record-fastest

https://www.thisismoney.co.uk/money/markets/article-6896385/Spice-Girl-Emma-Bunton-raises-420-000-ethical-baby-business-just-week.html

https://www.angelnews.co.uk/blog/equity-crowdfunding/emma-buntons-kit-kin-completes-fastest-fundraise-in-angel-investment-network-history-/

https://www.rte.ie/entertainment/2019/0407/1041170-emma-bunton/

The post Former Spice Girl’s Startup breaks investment record on Angel Investment Network appeared first on Angel Investment Network Blog.

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£7bn was invested into private UK companies in 2018, down 19% from record levels in 2017 but still significantly higher than any year before 2017, according to Beauhurst. Could this be the beginning of a decline? These are dark and uncertain times; and even those ‘presiding’ over Britain’s exit from the European Union are unable to agree on what the first order effects of this momentous action might be.

Data & Image from Beauhurst report on equity investments into private companies https://about.beauhurst.com/research/

Angel investors have far greater flexibility than any other investor type when it comes to adjusting their investment preferences. In times of macroeconomic uncertainty, they can easily defer activity until they have a clearer idea of the road ahead.

The warning signals, then, are there on a wider level. But on the Angel Investment Network platform, 2018 was a strong year with both UK investor and entrepreneur numbers rising to over 30,000 and 115,000 respectively. We now have over 1 million users globally. Our own analysis of the user activity on the site reveals some interesting insights into the angel investment landscape. And perhaps a light for the path forward.

Threadbare Fashion Sector

The High Street has had a tough time in the past year, with high profile fashion brands in trouble including House of Fraser and LK Bennett. According to user data on our site, investor willingness to back startup fashion brands has dipped dramatically with ‘fashion’ as a sector falling from the 6th to the 14th most popular sector in 2018, the largest slide of any category.

The poor performances of high street mainstays may have played some role in this, but more likely it is strong performances from other sectors that have contributed most tellingly to this dip in popularity. Judging from the performances of software, technology and the so-called ‘impact’ sector, it seems that fashion brands looking to raise investment will need to embrace technology and/or ethical mission statements as part of their proposition to regain investor interest.

Fintech Finesse

It will come as no surprise that the technology and software categories grew impressively and retained top spot for both investor interest and number of pitches looking for funding.  The rise of AI and machine learning with applications across so many industries has meant that many new startups have some form of digital technology at the core of their value proposition. The prevalence of industry jargon terms like ‘agrotech’, ‘insurtech’ and ‘fintech’ speak to this intersection between specific industries and the super-industry that software and technology is fast becoming.

Fintech in the UK is a great example. London has developed a well-deserved reputation as a Fintech hub over the past couple of years, thanks, in part, to the growth of companies like Monzo, Starling Bank, Revolut, and payment-linked-loyalty provider, Bink.

Their success has inspired a surge of exciting innovation in the space with some very promising startups coming onto the scene including: Coconut – a current account with inbuilt accounting; and Novastone – ‘WhatsApp’ for the finance sector. Both of whom completed funding rounds through Angel Investment Network in 2018, taking their total funding to £1.9M and £5.6M respectively.

We expect the fintech space to go from strength to strength in 2019 and beyond, and it may offer some hope for carrying the UK startup scene on its shoulders if the going gets tough.

The rise of impact investment

Another area starting to show promise is ‘impact investment’. Investor activity on the website mirrored growing societal interest in ‘impact’ or ‘profit-with-purpose’ – the notion that businesses should have some societal and/or environmental good at the core of their mission while still working for growth and profit, allowing investors to invest in line with their conscience without risking their chance of generating returns.

Investor searches for impact-related terms were up an average of 24.9% from 2017. The fastest growing sector was ’renewables’ which climbed from 40th to 32nd (a 25.4% increase in number of searches,‘greentech’ showed a 25.7% increase while ‘environmental’ had a 23.5% increase.

The United Nations’ Sustainable Development Goals

Some of the companies who benefitted from, or perhaps helped create, this growth in interest include: Verv – an AI home energy assistant – and Demizine – an end-to-end home water recycling system using technology originally engineered for space stations. In both cases, it is interesting to note the core role that cutting-edge software and technology plays in their value proposition.

Off the back of this, we recently launched a spin-off platform, Seedtribe, with the mission of building a community of impact entrepreneurs and investors. We are especially interested in the role technology can play for impact companies in bringing about positive change in the world, while generating returns for investors.

Equity property investments remain popular

As a final point, I should mention the property investment category which performed strongly on the site for the third year running. For context, our site was built to connect startup companies with angel investors, but from quite early on, property development companies would ignore our pitch framework (designed for startups) and submit their equity property deals on the platform. The appetite for their type of deal (25-35% returns per year over an 18-24 month period) was apparently strong among our investor community – perhaps as a less risky avenue for diversifying their portfolio. This remained the case in 2018 and we expect this to continue even with the current volatility in the property market.

Summary

Overall, investor and entrepreneur activity on our site has outperformed the sector at large. But in these uncertain times, we recognise that our efforts to support the early-stage investment community will have to go even further in 2019 and beyond.

Whatever the political climate, UK entrepreneurs will continue to bring out innovative solutions embedded in technology across a variety of industries in 2019. The Internet of Things, robotics and AI systems including software for autonomous vehicles are creating real excitement amongst our investor community, and rightly so. It is up to these investors to continue supporting the industry with capital, expertise and contact; and to light a way in these murky times.

Originally written by Oliver Jones, Head of Marketing at Angel Investment Network, for The Haggerston Times

The post Technology investors must shine a light in uncertain times appeared first on Angel Investment Network Blog.

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Every week The Sunday Times talk to a business angel investor, one of the early-stage investors who collectively inject £1.5bn a year into British start‑up companies. This week they featured our very own Olivia Sibony, Head of Impact at Angel Investment Network’s new impact-focused platform, Seedtribe. Here’s the piece as printed in The Times:

Olivia Sibony runs SeedTribe, an online platform that connects investors who want to back ethical businesses with entrepreneurs looking for funding. It is part of Angel Investment Network, which has about 1.1m members.

SeedTribe raised £2m last year and is currently working on companies including gaming developer, Playmob, and 28 Well Hung, a “carbon-beneficial” steak and chips chain.

Sibony, 38, co-founded Grub Club, helping London diners find culinary experiences. Two years ago, it was sold and rebranded Eatwith.

Star investment

Playmob can be integrated into a company’s website to engage users with the United Nations’ sustainable development goals. Dove [soap] uses it, reaching more than 4m people in three months. It is profit-driven, but at the same time doing good.

Common misconceptions

People think we don’t want to make a profit. If you don’t have any money in your bank account, you’re not going to be able to make an impact.

Mission-focused

Impact has to be embedded in the business. If you create a medical device that helps scan for early signs of skin cancer, the more devices you have the more impact you’ll have.

What I learnt

Building your own business teaches you what to do — and what not to do. I try to think of the next three things I need to do, rather than getting overwhelmed with 100 things at one time.

I wish I saw more…

Diversity among investors. That’s not just for the sake of diversity, which is important, but because we are missing out on so many potentially incredible businesses.

I wish I saw fewer…

Disposable cups and bottles all over the place. There is so much scope for creative entrepreneurship here. We can turn this growing and entirely needless problem into an opportunity.

Next disrupted industry

Housing. There’s a growing crisis — and great potential to do something that is financially viable that enables fewer people to be homeless.

You can read the original piece published in The Sunday Times here

Follow @Oliver_Jones7

The post The Sunday Times’ Q&A with Angel Investor Olivia Sibony appeared first on Angel Investment Network Blog.

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We are proud to be world’s largest online network of angel investors and entrepreneurs – we even passed 1 million users at the end of 2018. This scale means our data can reveal some interesting insights into the angel investment landscape. We’ve collected this information into a report which we’ve called the ‘State of the Angel Investment Nation’.

This first version of the report digs into the trends in the UK based on the data from more than 100,000 businesses and 30,000 investors.

Some Key Findings:

In a snapshot: Software retains its 2017 position as best performing sector, while food & beverage, fintech and property ventures showed strong growth.

• The UK’s position as a hub for food and beverage startups is highlighted by significant growth in both investors and pitch ideas. The sector climbed from the 4th to the 2nd most backed category by investors and remains the third most popular category for pitch ideas.

• Property remains an incredibly robust category for both investment and entrepreneurs. It matched its 2017 positions as third most popular sector for investors and second for pitch ideas. On the back of this, Angel Investment Network has launched BrickTribe – a platform focused specifically on property investments.

• Site activity mirrored growing societal interest in impact investment, with investor searches for impact-related terms up an average of 24.9% from 2017. The fastest growing sector was ‘renewables‘ which climbed from 40th to 32nd (a 25.4% increase in number of searches). ‘Greentech’ showed a 25.7% increase while ‘environmental’ had a 23.5% increase.

• Searches for ‘robotics’ were up by 7.8% becoming the 4th most popular search term for investors.

Discrepancies between number of Pitches and number of Interested Investors

The results also revealed a large discrepancy in some categories between the level of investment interest and the number of entrepreneurs looking for funding.

• Fashion was the 6th largest sector for pitch ideas, but drops to 14th in terms of the number of investors interested, with three times as many pitch ideas as investors.

• Technology sees a significant discrepancy between investors and pitch ideas. While it is the 4th most popular sector for investors, this falls to 9 for pitch ideas.

• The UK market seems to be under-served for investors in the medical sector. It is the 6th most popular category for investors but only 14th for pitch ideas.

View from the Founders

Angel Investment Network co-founder James Badgett commented:

“We are pleased to present our first public ‘State of Angel Investment Nation’. We hit the million-user mark just before the end of 2018 and so we feel the volume of our data is significant enough to yield meaningful insights.”

“Unsurprisingly, software and technology continue as strong performing sectors. We think the UK’s growing reputation as a FinTech hub, in particular, has helped these sectors maintain their positions. We’ve also seen a rise in other sectors including insurtech, AI/machine learning and IoT.”

Co-founder Mike Lebus added:

“The growth in investor interest for impact-related businesses is a rapidly rising trend and we expect this to continue over 2019 and beyond as investors increasingly become aware of the value of a conscience-driven approach. Impact projects we raised funds for in 2018 include Verv – an AI home energy assistant – and Demizine – an end-to-end home water recycling system using technology originally engineered for space stations.”

“Notable FinTech companies we’ve raised for include Coconut – current account with inbuilt accounting – and Novastone – a ‘WhatsApp’ for the finance sector. Another cutting-edge client in 2018 was Humanising Autonomy who’ve built the most advanced system for human-machine interactions using London pedestrians to train their algorithms.”

Industry Report Overview The Top 10 Sectors by Number of Pitches:

1. Software
2. Property
3. Food & Beverage
4. Hospitality
5. Transportation
6. Fashion
7. Media
8. Agriculture
9. Technology
10. Manufacturing

The Top 10 Sectors for Investors:

1. Software
2. Food & Beverage
3. Property
4. Technology
5. Hospitality
6. Medical
7. Transportation
8. Business Services
9. Energy
10. Agriculture

For the Full Report…

We will be presenting the full report to investors at our next pitching event in London (date in March to be confirmed). For more information on specific parts of the data or to request a place at the event, please contact me on oliver@angelinvestmentnetwork.co.uk

This report was referenced in City.A.M on 30th January 2019

This report was also used in a piece on Angel News on 31st January 2019.

Real Business published a longer analysis of our report on 1st February 2019.

Follow @Oliver_Jones7

The post Industry Report: Key Trends in UK Angel Investment 2018 appeared first on Angel Investment Network Blog.

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Fundraising is rarely easy. But the challenges faced vary between industries. The manufacturing sector, in particular, has its own pathways and hurdles to be navigated when it comes to fundraising.

Below, I cover the sources of finance available for manufacturing businesses and offer advice on which to choose for your business.

Why the right finance is so important for manufacturing businesses

Figures reported in January 2018 show that 17,243 UK companies entered insolvency – a 4.2% increase from the year before. It’s no secret that the first few years of a business are a critical time for its survival. The survival rate of business to year 5 is 44.1%.
________________________________________

“The UK is a great place to start a business, but survival rates are low. The recession has had an unsteadying effect on small and medium enterprises (SMEs) and we need to work hard to rebuild their confidence.”

David Swigciski, Head of Corporate, DAS UK Group

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The reasons that a business fails range from product failure, lack of market understanding and too much competition, through to the complexity of tax systems and too much red tape.

Financial planning is perhaps the biggest reason, especially for companies more than a year or two old. Without a stream of cash to sustain itself, a business will die very quickly. Lack of funding, late payments, increased business rates and maintaining your cash flow all contrive to limit the cash available.

When is the right time for a business to borrow?

The life cycle of a business needs cash injections at many stages, including:

• Expansion into new products or markets
• Fulfilling new orders above usual production demand
• Sourcing new suppliers
• Increasing inventory volumes to reduce costs
• Bridging a late payment from a large customer that is in financial difficulty

A good financial model for cash flow forecasting will highlight when your business may need more cash to continue to operate and understanding your working capital cycle is a vital part of this model.

The Working Capital Cycle Explained

The Working Capital Cycle (WCC) is the length of time it takes to convert net working capital (assets and liabilities) into cash in the bank.

If a business has a short WCC then it quickly releases cash from its production cycle which is then free to either reinvest or to purchase more materials. As a result, the business will require less funding.

If a business has a long WCC, then capital is ‘trapped’ in the working capital process and is not free to use. Businesses in this position are more likely to need funding and finance.

A business will try to reduce its WCC to as few days as possible, usually by increasing the payment terms with their suppliers and reducing the time to collect what it’s owed by its customers. Other ways to reduce the gap include streamlining processes, reducing manufacturing times and decreasing the sales cycle.

Understanding the WCC of a business is essential to plan for stability. As any CEO will tell you, the ability to weather all storms is the key to business success.

Once a business is aware of where the financial ‘gaps’ are to be bridged, it can then implement funding to ensure a healthy cash flow is available at all times in order to continue operating. This can range from organising a working overdraft, invoice financing or a short-term bridging loan for growth periods, for example when completing either a new order or launching a new product.

With this knowledge, a business owner can then look for sources of funding to support the business and to keep a healthy cash flow.

How to Choose a Finance Option

First, look for any government funding and loans that are either a non-repayable grant or a low-cost loan. These are regulated by specific guidelines and are often regionally based.

Failing this, you then need to look at equity or debt options…but which one?


Ask yourself the following questions:

1. How much money do you need?
Debt finance is suitable for anything between a few thousand to millions of pounds – dependent on finding a willing lender. Equity finance is usually from tens of thousands up to tens of millions and many VCs will only consider investing large sums.

2. Are you prepared to give away equity and a share of your business?
This is a clear choice between equity and debt. You will also have to consider how much equity you’re prepared to give away if you choose to go down an investment route.

3. What are your growth ambitions?
An equity investor is predominantly motivated by aggressive growth, for a return on their investment. A lender such as a bank is only concerned with their capital being repaid and growth is generally not an issue.

4. How long do you need the money for?
For a short-term cash injection, debt finance is the most suitable. If you have long-term needs, then equity investment could be a better option.

5. Do I need support?
An angel investor will also act as a mentor and can have significant input into helping you start up and grow a business. If you have a great product or a proven business but need help to take things to the next level, then an angel could be the best option for you.

It is worth noting that equity finance is a more expensive way to borrow money, but the investor is taking most of the risk. Debt finance means that you keep control of your business – and at a lesser cost – but most of the risk is yours.

What do I need to prepare to apply for funding?

1. Evaluate your business to understand what it requires

2. Draw up a business plan to clearly outline your strategy for growth and how you will use the required funding

3. Use research to show that your plan is realistic and achievable. Know your business, the market and your figures inside out.

4. Get advice on the application process, especially if you’re seeking equity investment. Speak to an adviser who can help you prepare your plan and who can give you advice on how to apply and pitch.

Sources of Finance for Manufacturing Businesses

Government Grants and Regional Agencies
The government has a variety of schemes, grants and funding options for businesses at every stage, from startup to innovation and exporting, and every business should review what funding and support is available. This type of funding is focused mainly on small businesses but not exclusively.

Grants and schemes are all subject to strict criteria and some are match-funded, which means the business must either self-fund or find external funding to match the grant on offer.

Funding support is available for businesses around the UK, with a variety of grants and loans on offer, all with specific regional criteria. Grants are constantly changing; therefore, it’s best to review what’s currently available here.

• For business innovation, Innovate UK has a series of competitions to fund between £25k and £10m for a product development project.

UK Export Finance can offer advice and support to businesses who are exporting, usually though underwriting loans and finance.

Business Finance Partnership helps small to medium-sized businesses find finance from private sector investors.

The Prince’s Trust has helped small businesses and entrepreneurs under the age of 30 since 1983. They offer mentoring, grants and loans.

For more info, I wrote a separate post on grants here.

Startup Loans

For a new manufacturing business struggling to get finance, the government-backed Startup Loans can offer a personal and unsecured loan of up to £25k. The benefit of this loan is that you do not need any assets to secure funding but the individual is personally liable for the loan and not the business.

To be eligible to apply you must be:

• Unable to have secured funding from elsewhere
• Your business is less than two years old and is based in the UK
• You are 18 or older and a UK resident, with the right to work in the UK

If there are multiple partners, each person can apply for a loan of £25k up to a maximum of £100k investment in one business. The loan is to be repaid over one to five years at 6 percent.

With the funding, a business also receives one year of mentoring and support to prepare a business plan.

________________________________________

“Bank Loans and commercial mortgages are the fourth most popular form of external finance among UK SMEs”

British Business Bank Analysis, SME Finance Monitor

________________________________________

Bank Business Loan

For an established business with a trading history, a bank loan is one of the most popular choices for securing finance.

Your options are based on the credit history of the business (including the business owners’) and whether you have any assets that you can offer as security. Property is usually the bank’s first consideration for security but machinery and equipment may be considered.

The business must prove that it can afford to repay the loan.

The other option, of an unsecured loan, will usually require a personal guarantee from the owner or directors of the business and will be subject to higher interest rates.

The benefit of a business loan is that you retain control of your business and can arrange funds quickly.

For a manufacturing business, a close relationship with their bank is essential to support their financial plans and to facilitate expansion and growth. Business loans are suitable for buying equipment, machinery or to fund the development and launch of a new product.

Bank Overdrafts

Another option for established businesses to support cash flow is a working capital overdraft with the bank. 16% of SMEs use an overdraft.

An overdraft is not a loan but is a means to both facilitate growth and to manage cash flow. An overdraft is expected to be used to bridge gaps on a monthly basis with the account being in credit for part of the month.

Overdrafts tend to have high interest rates but this is only paid on the overdrawn balance and so offers a flexible solution on a short-term basis to bridge gaps. There will also be an arrangement fee to pay.

Venture Capital (VC)

One of the most popular ways to fund a start-up or a business in its early stages, that has aspirations to scale quickly.

A VC is a fund of investors who are motivated to make an above-average return on their investment and in return they’re prepared to take a risk on early-stage, unproven businesses. They do factor that a certain percentage of their investments will fail but the ones that succeed can deliver massive returns.

The VC is focused on investing in a business that has long-term growth potential and will require a significant percentage stake in the business to reflect the risk that they’re taking. They expect to hold an interest in the business for five to seven years before they see a return.

Investment is delivered in a series of ‘rounds’, beginning with the seed round to test a proof of concept and then ‘series A’ onwards will be large cash injections to allow the business to scale.

A VC is not only looking for a strong business plan, they’re also concerned with the founders and the management team, and are investing in their ability to quickly scale and grow their business, as much as the business idea itself.

Venture capital investment can be used by a manufacturing company that has a new product to launch and expand into new territories or on a worldwide scale but in return, they will have to give away an equity stake in the business.

________________________________________

“VC is an incredible partnership between financial professionals and founders. Many VCs are often ex-entrepreneurs, so their advice can be invaluable.”

David Mott, Chairman, Venture Capital Committee, BVCA

________________________________________

Private Equity (PE)

Where a VC is focused on early stage investment in a business, PE is a medium to long-term finance option. It’s more relevant for a proven business that wants to grow or move to the next level and which needs help to achieve that.

The PE investment comes from individuals or specific private equity businesses, rather than funds made up of investors looking to speculate.

The PE investor will take a significant share of the business, often taking control. For this reason, this source of finance is relevant for owners who feel they have taken the business as far as they can and who now need help to achieve the next level, and are willing to relinquish control in return for this. Or, they may want to retire or step down from running the business and instead, retain a minority stake.

For a manufacturing business, growth could represent developing new and existing products, reducing costs and streamlining processes for more profitability and expanding into new markets.

________________________________________

“You build relationships in Private Equity over three or four years. So, if you’re thinking of retiring and there’s no obvious succession plan, Private Equity makes your exit easier.”

Tim Hames, Director General, BVCA

________________________________________

Angel Investment

Angel investment is finance provided by private, high-net worth individuals.

An angel investor usually has substantial business experience, with the knowledge and contacts to help other businesses succeed. They often take a hands-on approach and have significant input into the business. A strong working relationship is essential between an angel investor and the business owner they invest in.

Our service at Angel Investment Network is to connect entrepreneurs with our network of 180,000 angels investors worldwide.

A manufacturing business that has developed a new product would benefit from angel investment or a startup that needs the expertise of an experienced business owner to mentor them.

Expansion Capital

Once a business is established and has proven its success, it will want to grow. Rather than relinquishing control with private equity funding, expansion capital can be a partner to help the business achieve its goals by having the ability to inject funds at each growth stage with subsequent investments.

Expansion capital tends to be for higher amounts, such as £1-20m and an investor will expect a 10-30% stake of the business in return.

For a manufacturing business, expansion capital can be applied to the production of new products, entering new territories or even the strategic acquisition of another company (for either their manufacturing capability or even the intellectual property of another product).

Asset Finance

For an established business that has a trading history and which can show assets (that have value) on the balance sheet, finance secured on those assets can be an option to raise funding for growth, without giving away equity.

Banks often require a security guarantee for a loan but are restrictive in what they accept as security – usually only property. An asset finance lender will accept a wider range of security such as, the debtor book, machinery, equipment and stock. In some instances, intellectual property rights or patents can be used.

Traditionally, asset finance was considered a ‘last option’ to raise funding but has become more popular for any business that needs to quickly raise cash.

Leasing and Hire Purchase

A form of asset finance that is so popular in the UK with small to medium businesses that it’s second only in use to overdrafts.

The difference is:
Leasing means you pay a ‘rental’ on the item that you require, such as a van or a piece of machinery. At the end of the rental period the item is returned.
Hire purchase is an agreement to buy an asset over an agreed period of instalment payments. This means the business has the equipment it needs immediately without a large upfront investment and keeps the item once it’s paid for.

For a manufacturing business that needs to invest in a new fleet of delivery vehicles or production equipment this is an option to quickly put in place what is needed. Ideal for start-ups and growth periods.

________________________________________

“It does the job that businesses need it to, allowing them to get the asset on board quickly and simply so they can start using it within their business.”

Sam Dring, Senior Product Manager, Asset Finance, Lloyds Banking Group

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Invoice Financing

Also known as factoring, invoice financing is a way to reduce the working capital cycle by releasing the value of an invoice as soon as it’s issued to the customer.
An established business will need a trading history and payment terms of less than 90 days on their invoices. They will also need to show that their customers are reliable payers.

An invoice financing lender will lend up to 90 percent of the value of the invoice and then manage the payment recovery from the customer. The cost of the financing is a percentage of each invoice.

Especially relevant to manufacturing businesses who want to reduce a long working capital cycle, release finance out of the cycle quickly and manage their cash flow more efficiently.
The business owner has access to cash and retains control of the company without relinquishing equity.

Summary

It’s very rare that a business is so cash positive from the outset that funding is never needed. Even cash positive businesses often need external finance to accelerate growth and scale quickly.

Fundraising is, therefore, a bridge that almost all business owners face. Making the right choice for your business will save you time, stress and money; and could, ultimately, be the difference between success and failure.

Thanks to Sage for allowing us to use and share their original copy and images. You can view the original post here

The post Everything you need to know about Fundraising for your Manufacturing Business appeared first on Angel Investment Network Blog.

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Policy and regulation have a huge impact on the tech sector. A recent report by Allied For Startups takes a deep dive into how current regulatory systems are affecting the landscape for European startups…

We are in a period of unprecedented innovation and development across a wide range of sectors. Many of the new and impending technologies are so novel that it is unclear how existing regulation systems will manage them.

AI, drones and autonomous vehicles are just some examples of technologies giving regulators pause for thought. All three examples raise difficult moral as well as practical questions; and given the rate of innovation, it now seems like too many questions are coming at once.

The role of regulators is to ensure new technologies can be deployed in safe and meaningful ways. But this often slows the speed with which a new technology can come to market.

Regulators have to balance safe deployment with not hindering the release of exciting new tech. A difficult task – and one about which the investors interviewed in the report are concerned.

Who are Allied For Startups?

Allied For Startups is a worldwide network of startup associations and advocacy organizations focused on improving the policy environment for startups. Their report on ‘The Impact of Regulation in the Tech Sector’ provides insight into the views of technology investors (among others) on reactive regulation and policy decisions that impact the development of the sector.

What’s in the Report?

Tech ecosystems take time to develop, but the benefits to the economy are substantial as new companies are spun out of existing ones, and the sector as a whole creates jobs and wealth. Based on 185 interviews, this report flags areas of opportunity and risk for the European tech ecosystem in the coming years.

The report also highlights that tech investors are highly conscious and aware of the regulatory environment and that this can have a huge impact on their decision to invest or not. Furthermore, there are particular concerns among investors that regulation and taxes are designed to target larger companies but can have unintended consequences for startups, and that regulation is often reactive as opposed to strategic.

Allied For Startups conclude their report by stating that a fairer and more stable regulatory environment is needed to ensure the tech sector continues to flourish.

Read the Report here

For more information on Allied for Startups please see here.

Follow @Oliver_Jones7

The post The Impact of Regulation on the European Tech Sector – Report by Allied For Startups appeared first on Angel Investment Network Blog.

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The term ‘podcast’ was coined to describe audio content (other than music) that you could download to your iPod – you know, that Apple product long since ingested by the iPhone. But the term lives on and its popularity is on the rise.

According to Edison Research, 64 per cent of Americans are now familiar with the term “podcast” and over 4 in 10 have listened to at least one podcast. 73 million Americans listen to podcasts every week; their average weekly listening time is an astonishing 6 hours 37 minutes.

There is a number of reasons for this including:

  • A shift in audience entertainment expectations towards on-demand content
  • A desire for long-form content where listeners can, by degrees, come to understand fully the topic under discussion
  • A recent UCL study even showed that emotional responses are stronger from auditory content than visual

But the medium itself shouldn’t take all the credit for the popularity of podcasts. Podcast creators have contributed their time, creativity and expertise to produce compelling and informative audio experiences.

Today, the selection of top-quality podcasts is almost limitless. And that is true of any industry from gaming to politics; from children’s books to investigative journalism.

The startup and business space is no different. There is so much choice – it can be a little bewildering. Especially given that you are probably pressed for time and want to start by listening to the best podcast that is most relevant to you!

We love podcasts. We listen to many of them. And we even host our own podcast (see below).

To help you get started on your journey of discovery, we have compiled our list of the Top 5 Startup and Business Podcasts.

1. This Week in Startups

Tech entrepreneur Jason Calacanis interviews successful entrepreneurs to share their experiences and offer advice to people thinking of starting their own businesses.

2. The Pitch

Josh Muccio presents real entrepreneurs pitching in the hope of securing venture funding from investors. Entertaining and informative!

3. Masters of Scale

LinkedIn founder, Reid Hoffman hosts guests with expertise and insights into scaling a startup. The focus is on growth rather than starting out…

4. How I Built This

Guy Raz presents the journies of some of the most famous companies as told by the entrepreneurs who drove them.

5. The Startup Microdose Podcast

The only UK-based podcast to make our list is our own (hosted by yours truly and my colleague, Ed Stephens!).

Recently tracking at the number 1 in the Apple Business podcasts list, the Startup Microdose has exceeded all our expectations in its first year.

With guests including the founders of Huel, What3Words, Depop and Sweatcoin, we unpack the stories and secrets of companies right in the moment of their success.

Check it out on iTunes, Spotify or new podcasting platform, Entale.

Let me know your favourite (even if it’s not mine)!

Since we published this post, FeedSpot released their list of the ‘Top 30 Startup Podcasts on the Planet’

We are delighted that four of our list (Startup Microdose, Masters of Scale, TWiST and How I Built This) all made the cut.

Check out the full list here

Follow @Oliver_Jones7

The post Top 5 Startup Podcasts for Entrepreneurs & Angel Investors appeared first on Angel Investment Network Blog.

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At a glance, the Autumn Budget 2018 is a win for entrepreneurs and SME’s. If your personal income is less than £100,000 and you’re a ‘genuine’ entrepreneur, taxation rules and entrepreneurs’ relief remain favourable. The more indirect budget effects could also be highly beneficial.

Established entrepreneur and founder and MD of globally-recognised, Absolute Translations, Sergio Afonso summaries the 2018 Budget’s impact on UK entrepreneurs and SMEs.

1. Entrepreneur Relief Timeline Extended

Phillip Hammond decided to meet halfway regarding the contested £10m entrepreneurs’ relief allowance, choosing to revise rather than abolish. The change is an increased minimum holding period from one year to two prior to selling a business.

This is meant to reward ‘genuine’ entrepreneurs who recognise that establishing a successful business ready to sell takes time.

Those who build and sell a business within 24 months will no longer qualify for the tax allowance.

2. Rates slashed for independent businesses

Businesses of all sizes have generally gained.

High-street based small businesses are the biggest winners. Up to £8000 in tax savings are now available for small businesses who have a rateable value under £51,000 for the next 2 years.

The fight to protect independents from corporations like Amazon from running local enterprise out of business is additionally supported through co-funding to local councils, with Hammond committing of £675m to the transformation of streetscapes, infrastructure and transport access.

3. VAT Raid scrapped & allowances raised

Despite reports of a VAT raid on small business lowering the minimum required turnover amount required to pay VAT from £85,000 to £43,000, no such decision was officially made.

In fact, the chancellor raised the personal tax allowance from £12,500 for basic rate taxpayers and £50,000 for higher rate taxpayers in 2019.

Businesses seeking capital expenditure will also be pleased with the “Annual Investment Allowance” being substantially increased from £200,000 to £1m.

4. Digital Services Tax a win for Start-ups

Tech-based startups are likely to benefit indirectly from the digital services tax that will be placed on “established technology giants”.

Public calls for companies such as Facebook and Google to contribute to local tax and “pay their fair share towards support of public services” has encouraged Hammond to show the way to the international community.

The “UK digital services tax” introduces a 2% tax for tech companies with sales over £500m. This strategically avoids the UK startup and SME market and potentially creates an opportunity for them to gain market share.

Critics hope it has been designed in a way that doesn’t prevent home-grown tech innovation or international business investment in the UK.

5. Brexit’s Impact


The Budget 2018 cannot be evaluated without taking into consideration the broader implications of Brexit.

Hammond’s Budget aims to reduce austerity but, in the event of a no-deal Brexit, he concedes that the economic situation will continue for another 5 years.

This is a potential worry for UK-only entrepreneurs and businesses. Opportunities to take a global view is an option for relevant business owners to avoid the expected financial fallout. Others must hope that the unconfirmed but rumoured spending increase of 1.9% will come into fruition.

You can read more detailed takeaways from the Budget 2018 here
Follow @Oliver_Jones7

The post What the UK Chancellor’s Budget 2018 means for Entrepreneurs and SMEs appeared first on Angel Investment Network Blog.

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The gender pay gap has come under intense scrutiny in recent years. Movements like #MeToo and #TimesUp have brought sexism issues to mainstream attention. This is true across a spectrum of industries. But there is a nuance when it comes to the startup investment space. Female founders are still underfunded compared to their male counterparts.

As an industry, it’s time to close this gap. To do so, will require a concerted effort from all parties – founders, funds, networks and investors – to overcome biases and to support merit wherever it is found.

Elite Business Magazine recently did a feature on this to discuss why female founders find it harder to raise funding than males.

The feature includes an interview with our very own, Olivia Sibony. Olivia recently sold her startup to EatWith before joining our team. In the interview, she describes the difficulties she faced when fundraising including discrimination because she was “…of childbearing age”.

She now runs our impact crowdfunding arm, SeedTribe. Her mission encapsulates two main aims. She wants to help anyone fundraise evaluated purely on merit. And she wants to encourage more people to invest. She is confident that SeedTribe will be a great platform to achieve this. (A fact she discussed in an earlier interview for The Guardian).

You can read the full feature and Olivia’s thoughts on the Elite Business Magazine website.

Follow @Oliver_Jones7

The post Why Female Founders find it harder to get Investors appeared first on Angel Investment Network Blog.

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