Call for more angel investment in the region to ‘level up’ economy

An angel investment group – which is part of the University of Warwick Science Park – hit a record for the amount of cash injected into businesses in 2020 despite the Covid-19 crisis.

Minerva Business Angels, which now has investment groups across the Midlands and on Merseyside, pumped £1.4 million into start-up, spin-out and scale-up businesses over the past 12 months.

Over £24m has now been invested and used to leverage around £75m angel investing since it first grew out of the University of Warwick Science Park Ltd in 1994, with 129 companies being supported – putting Minerva at the top of the UK’s Angel networks.

But Alex Toft, who has overseen the expansion of the Minerva network since becoming head of the group in 2017, says it is vital that the regions close the gap on London when it comes to angel investment into firms and that local investors get involved.

He was speaking at Minerva’s annual review of activity, which took place online and heard updates from several businesses which have received investment from the group – from a company that is helping to increase broadband speeds across the world through to a firm that has created an online sales platform for used industrial machinery.

Alex said: “Minerva is now one of the oldest angel investment networks in the country and, despite the crisis of the past year, we’ve continued to expand our reach.

“In 2020, we hit the £1.4 million mark, but I think that would have exceeded more than £2 million had it not been for Covid-19.

“We’ve had more than 320 applications and had 70 pitches from businesses looking for angel investment funding. On top of that, we are developing new partnerships and a new Super Start-Up Club to provide a structure to work with and develop spin-outs from universities.

“Our angels provide so much more to businesses than cash – in many cases they join the board or offer mentoring and the companies benefit massively from that experience and networks.

“We heard from some of the companies we’ve supported during our event – not as many as we would if we were able to meet up in person, but enough to know the difference angel investment can make and to a business and how it can lever in other funding.

“Over the past year, we’ve heard a great deal about the levelling up agenda and the support for start-up, scale-up and spin-our businesses has to be part of that. London and the South East still dominates when it comes to investment and rest of the UK has to catch up. We need these early start-ups and scale-ups to become the norm in any investment portfolio and people still don’t understand the significant tax benefits that come with such investment.

“We are providing a platform to bring angel investors together with businesses but if we really want to develop high-tech, high growth companies, we have to see more of that private cash moved out of London and into the regions. Unlike the South East, property is seen as the principal way to achieve a return locally and thus they are also missing the chance to give back and help grow the local economy.  We have ‘shop locally’ as a phrase we all know and need to add ‘invest locally’ too.”