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
Mathematical confirmation: Rewiring financial networks reduces systemic risk
22.06.2017 | International Institute for Applied Systems Analysis (IIASA)
Frugal Innovations: when less is more
19.04.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO
University of Maryland researchers contribute to historic detection of gravitational waves and light created by event
On August 17, 2017, at 12:41:04 UTC, scientists made the first direct observation of a merger between two neutron stars--the dense, collapsed cores that remain...
Seven new papers describe the first-ever detection of light from a gravitational wave source. The event, caused by two neutron stars colliding and merging together, was dubbed GW170817 because it sent ripples through space-time that reached Earth on 2017 August 17. Around the world, hundreds of excited astronomers mobilized quickly and were able to observe the event using numerous telescopes, providing a wealth of new data.
Previous detections of gravitational waves have all involved the merger of two black holes, a feat that won the 2017 Nobel Prize in Physics earlier this month....
Material defects in end products can quickly result in failures in many areas of industry, and have a massive impact on the safe use of their products. This is why, in the field of quality assurance, intelligent, nondestructive sensor systems play a key role. They allow testing components and parts in a rapid and cost-efficient manner without destroying the actual product or changing its surface. Experts from the Fraunhofer IZFP in Saarbrücken will be presenting two exhibits at the Blechexpo in Stuttgart from 7–10 November 2017 that allow fast, reliable, and automated characterization of materials and detection of defects (Hall 5, Booth 5306).
When quality testing uses time-consuming destructive test methods, it can result in enormous costs due to damaging or destroying the products. And given that...
Using a new cooling technique MPQ scientists succeed at observing collisions in a dense beam of cold and slow dipolar molecules.
How do chemical reactions proceed at extremely low temperatures? The answer requires the investigation of molecular samples that are cold, dense, and slow at...
Scientists from the Max Planck Institute of Quantum Optics, using high precision laser spectroscopy of atomic hydrogen, confirm the surprisingly small value of the proton radius determined from muonic hydrogen.
It was one of the breakthroughs of the year 2010: Laser spectroscopy of muonic hydrogen resulted in a value for the proton charge radius that was significantly...
17.10.2017 | Event News
10.10.2017 | Event News
10.10.2017 | Event News
20.10.2017 | Information Technology
20.10.2017 | Materials Sciences
20.10.2017 | Interdisciplinary Research