British Business Investment has announced a new initiative aimed at improving the flow of ‘angel’ funding to small and medium sized businesses in the UK’s regions.
Research carried out by the organisation – a subsidiary of the British Business Bank – has revealed significant regional imbalances in the availability of angel funding. According to the study, 57% of business angels are located in London and the South East and 43% of their investments are made there.
In contrast, the South West, which has the second highest concentration, is home to just 6% of business angels while the North West and East of England each have a 5.0% of the national total. Turning to the devolved nations, Scotland hosts 8% of Britain’s angels. The figure for Wales and Northern Ireland are 4.0% and 1.0% respectively.
To address these disparities, British Business has launched a £100m Regional Angels programme, – essentially a fund that will invest alongside angels in the regions. The hope is that the fund will act as a catalyst to spur more equity investment in SMEs with growth potential.
Commenting on the initiative, Catherine Lewis la Torre, CEO of British Business Investment said: “The programme will ensure that ambitious smaller businesses can access the early stage equity finance they need.”
The move was welcomed by the UK Business Angels Association. “This will bring a real boost to the funding stream in areas where angel capacity is uneven,” said CEO Jenny Tooth. “This additional investment capital offers the opportunity to stimulate vital new sources of angel capital to back entrepreneurs with growth potential – many of whom have to currently seek the investment they need in London and the South East “
The launch of the initiative is one of several concepts that sprang from the Government’s Patient Capital Review, the aim of which was to improve the availability and diversity of long-term finance.