Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Business angels most effective in strategic development role, says Newcastle Business School study

26.07.2007
Business angels can have the biggest impact on their investee company when they help shape its strategic direction, according to a new study published by Newcastle Business School at Northumbria University.

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
Further information:
http://www.newcastlebusinessschool.co.uk

More articles from Business and Finance:

nachricht How Strong Brands Translate into Money
15.11.2016 | Kühne Logistics University - Wissenschaftliche Hochschule für Logistik und Unternehmensführung

nachricht Demographic change depresses tax revenues
04.11.2016 | Fraunhofer-Institut für Angewandte Informationstechnik FIT

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Novel silicon etching technique crafts 3-D gradient refractive index micro-optics

A multi-institutional research collaboration has created a novel approach for fabricating three-dimensional micro-optics through the shape-defined formation of porous silicon (PSi), with broad impacts in integrated optoelectronics, imaging, and photovoltaics.

Working with colleagues at Stanford and The Dow Chemical Company, researchers at the University of Illinois at Urbana-Champaign fabricated 3-D birefringent...

Im Focus: Quantum Particles Form Droplets

In experiments with magnetic atoms conducted at extremely low temperatures, scientists have demonstrated a unique phase of matter: The atoms form a new type of quantum liquid or quantum droplet state. These so called quantum droplets may preserve their form in absence of external confinement because of quantum effects. The joint team of experimental physicists from Innsbruck and theoretical physicists from Hannover report on their findings in the journal Physical Review X.

“Our Quantum droplets are in the gas phase but they still drop like a rock,” explains experimental physicist Francesca Ferlaino when talking about the...

Im Focus: MADMAX: Max Planck Institute for Physics takes up axion research

The Max Planck Institute for Physics (MPP) is opening up a new research field. A workshop from November 21 - 22, 2016 will mark the start of activities for an innovative axion experiment. Axions are still only purely hypothetical particles. Their detection could solve two fundamental problems in particle physics: What dark matter consists of and why it has not yet been possible to directly observe a CP violation for the strong interaction.

The “MADMAX” project is the MPP’s commitment to axion research. Axions are so far only a theoretical prediction and are difficult to detect: on the one hand,...

Im Focus: Molecules change shape when wet

Broadband rotational spectroscopy unravels structural reshaping of isolated molecules in the gas phase to accommodate water

In two recent publications in the Journal of Chemical Physics and in the Journal of Physical Chemistry Letters, researchers around Melanie Schnell from the Max...

Im Focus: Fraunhofer ISE Develops Highly Compact, High Frequency DC/DC Converter for Aviation

The efficiency of power electronic systems is not solely dependent on electrical efficiency but also on weight, for example, in mobile systems. When the weight of relevant components and devices in airplanes, for instance, is reduced, fuel savings can be achieved and correspondingly greenhouse gas emissions decreased. New materials and components based on gallium nitride (GaN) can help to reduce weight and increase the efficiency. With these new materials, power electronic switches can be operated at higher switching frequency, resulting in higher power density and lower material costs.

Researchers at the Fraunhofer Institute for Solar Energy Systems ISE together with partners have investigated how these materials can be used to make power...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

ICTM Conference 2017: Production technology for turbomachine manufacturing of the future

16.11.2016 | Event News

Innovation Day Laser Technology – Laser Additive Manufacturing

01.11.2016 | Event News

#IC2S2: When Social Science meets Computer Science - GESIS will host the IC2S2 conference 2017

14.10.2016 | Event News

 
Latest News

UTSA study describes new minimally invasive device to treat cancer and other illnesses

02.12.2016 | Medical Engineering

Plasma-zapping process could yield trans fat-free soybean oil product

02.12.2016 | Agricultural and Forestry Science

What do Netflix, Google and planetary systems have in common?

02.12.2016 | Physics and Astronomy

VideoLinks
B2B-VideoLinks
More VideoLinks >>>