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Improving Funding Opportunities for Businesses

A new report has revealed a clear regional disparity across the UK in terms of where Angel investors are based and where they invest. 

Regional Disparity

According to the report, which was published by the British Business Bank, 57% of business Angels are based in London and the South East, with 35% in London and 22% in the South East. In addition, nearly a third of business Angels’ investments are made in London (31%), followed by the South East (12%).

In England, the South West has the largest number of business Angels outside of London and the South East (6%), followed by the North West (5%) and the East of England (5%). In the devolved regions, 8% of UK Business Angels are based in Scotland, 4% in Wales and just 1% in Northern Ireland.

The report also looked into the sectors most Business Angels choose to invest it, and found the four sectors most-favoured by Business Angels are Healthcare (27%), Life Sciences (26%), Fintech (25%) and Software as a Service (24%). The median initial investment by a Business Angel is £25k with a median follow on investment of £7.5k.

Addressing the Disparity

To address the regional disparities revealed in the survey, the British Business Bank is establishing a new commercial programme to support developing clusters of business angels outside London. Alongside its existing programmes, the bank will increase its physical presence across the UK by leveraging regional angel groups and establishing a network of regional relationship managers. It is expected that these new initiatives will help deliver further improvements in the UK’s Business Angel finance ecosystem, making it more dynamic and diverse.

“The findings of this report show extremely positive signs of continuing growth in the angel market, but many regions continue to show an underserved level of angel investment,” commented Jenny Tooth OBE, Chief Executive, UK Business Angels Association. “We therefore welcome the British Business Bank’s implementation of this major new commercial investment programme to stimulate new regional business angel clusters.”

“At UKBAA, we are complementing this important initiative with capacity building actions, including new regional Angel Hubs, combined with our new national e-learning programme on angel investing,” she added.

British Business Bank Launches British Patient Capital

In other news, the British Business Bank has announced the launch of British Patient Capital, which it describes as a new £2.5bn programme designed to enable long-term investment in high growth potential companies across the UK led by ambitious entrepreneurs who want to build successful, world-class businesses.

The creation of the programme forms an important element of the Government’s Industrial Strategy, and aims to support UK businesses with high growth potential to access the long-term financing they need to scale up. By investing alongside the private sector, British Patient Capital will support a total of £7.5bn of investment for British businesses. It will be developed as a separate subsidiary of the British Business Bank with a view to future sale into the private sector with an established portfolio and proven track record.

“The UK is home to some of the world’s most innovative companies and I want to make sure that they stay at the forefront of the tech revolution,” explained Rt Hon Philip Hammond MP, Chancellor of the Exchequer. “So, British Patient Capital will provide an extra £2.5 billion for these cutting-edge businesses ensuring Britain remains one of the best places to start and grow a company.”

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