Stephanie Macht, a researcher in small business strategy, has surveyed 71 angels about their post-investment involvement and found that activities such as formulating strategies impact most positively upon investees’ success. The study also concluded that becoming an employee or a member of the company’s management team had the least positive effect.
Despite the widely acknowledged importance of business angels to UK small firms, little was previously known about their involvement and impact after they have invested. Miss Macht said she hoped her study would shed light on how growing companies can best work with their angels. “Although two thirds of business angels said that gaining return on investment was important to them, more than half also said that the enjoyment of supporting the entrepreneur through their knowledge, skills and network of contacts was a strong motivation for investment,” she said. “Using angels’ expertise and enthusiasm to advise the company strategically is clearly the best use of their time as opposed to getting them involved in day-to-day matters.” On average angels spend one day a week in their investee company, the report said.
Seventy two per cent of business angels questioned for the study had both founded and owned a small business before, but only 32 per cent stayed within industries in which they had prior work experience. Only a quarter of responding angels had ever received some kind of formal training or mentoring.
One business angel involved in the study was Tony Douglas, who has been investing in North-East companies for a decade. Having spent 10 years in his own defence and image analysis company, Joyce-Loebl Ltd, Mr Douglas sold up and joined a business investors group. He has invested in a total of 17 businesses including a music venue, magazine publisher and translation company, but only two have reflected his own expertise in electronics engineering. His latest pursuit is Current Thinking, where his angels group has invested £100,000, and he has recently taken on an executive role. “Typically I’m looking to double my money in three years, or gain a higher return over five years,” he said. “On average this happens in one or two out of every 10 investments and between four and six fail altogether.”
Mr Douglas said the Newcastle Business School at Northumbria University findings mirrored his own contribution. “Like any investor I want to make money, but I like to think I bring a lot more to the table including sales ability, knowledge of the market and a sympathetic ear,” he explained. “Not everyone can be a managing director, but angels are hired on the assumption that they have been successful in running their own business and know how to make money. That’s why involvement in strategic development is a must for any business angel in a young or growing company.”
Phil Smith | alfa
Frugal Innovations: when less is more
19.04.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO
Europe's microtechnology industry is attuned to growth
10.03.2017 | IVAM Fachverband für Mikrotechnik
Two-dimensional magnetic structures are regarded as a promising material for new types of data storage, since the magnetic properties of individual molecular building blocks can be investigated and modified. For the first time, researchers have now produced a wafer-thin ferrimagnet, in which molecules with different magnetic centers arrange themselves on a gold surface to form a checkerboard pattern. Scientists at the Swiss Nanoscience Institute at the University of Basel and the Paul Scherrer Institute published their findings in the journal Nature Communications.
Ferrimagnets are composed of two centers which are magnetized at different strengths and point in opposing directions. Two-dimensional, quasi-flat ferrimagnets...
An Australian-Chinese research team has created the world's thinnest hologram, paving the way towards the integration of 3D holography into everyday...
In the race to produce a quantum computer, a number of projects are seeking a way to create quantum bits -- or qubits -- that are stable, meaning they are not much affected by changes in their environment. This normally needs highly nonlinear non-dissipative elements capable of functioning at very low temperatures.
In pursuit of this goal, researchers at EPFL's Laboratory of Photonics and Quantum Measurements LPQM (STI/SB), have investigated a nonlinear graphene-based...
Dental plaque and the viscous brown slime in drainpipes are two familiar examples of bacterial biofilms. Removing such bacterial depositions from surfaces is...
For the first time, scientists have succeeded in studying the strength of hydrogen bonds in a single molecule using an atomic force microscope. Researchers from the University of Basel’s Swiss Nanoscience Institute network have reported the results in the journal Science Advances.
Hydrogen is the most common element in the universe and is an integral part of almost all organic compounds. Molecules and sections of macromolecules are...
22.05.2017 | Event News
17.05.2017 | Event News
16.05.2017 | Event News
22.05.2017 | Materials Sciences
22.05.2017 | Life Sciences
22.05.2017 | Physics and Astronomy