(Business) Angels of the North
Dragons’ Den without the humiliation
When most people think of angel investing they picture a scene from Dragons’ Den, the BBC television business programme. The programme presents the investors as intimidating figures, reclining in comfortable chairs beside their piles of cash. They preside over pitches from nervous entrepreneurs presenting businesses of varying quality. A deal is struck in minutes, or not at all, and more often than not the entrepreneur leaves the den with nothing but dashed hopes and wounded pride. Whilst this might make for good television, in the real world, angel investing is conducted rather differently.
Steve McEwen is the North of England regional director for Beer & Partners, the UK’s leading business angel network. Beer currently has 1,700 registered business angels spread throughout the UK, of which more than 500 are currently living in the North of England. For the past two years Steve has been organising ‘Investment Evenings’ across the region, designed to introduce capable entrepreneurs to appropriate investors. This year events are planned for Liverpool, Manchester and Leeds.
“It’s Dragons’ Den, but without the humiliation” he explains. “The evenings are designed to introduce entrepreneurs to active investors in a warm and friendly environment, so that they can relax, present confidently, and do themselves justice.”
Each event typically attracts around 30 high net worth investors, who come to see presentations from 3 early-stage fund-seeking companies. The entrepreneurs each have 10 minutes to present and 10 minutes to answer investors’ questions, after which the angels chat to the entrepreneurs over a glass of wine.
Steve stresses that Beer’s events are targeted towards giving the entrepreneurs the best chance of securing funding. In contrast, he believes that Dragons’ Den often deliberately presents entrepreneurs who haven’t hope of securing the investment, so that they can be picked apart by the dragons for the viewers’ entertainment.
“In the real world there is no audience apart from the investors, so it is in nobody’s best interest to present companies which are not up to scratch. That’s why we only work with companies that are able to demonstrate significant growth potential, have a suitable exit strategy, a capable management team in place…and a firm grip on reality”, he says with a wry smile. “That way we ensure there are no nasty shocks for unprepared entrepreneurs, or any disappointment for our investors.”
In the wake of Beer’s most recent event, which took place in February at the Great John Street hotel in Manchester, two of the three presenting companies have received offers of investment from angels who attended. One company, which has developed a tasty soft drink that also burns calories, and the other, a specialist supplier of pipeline equipment, both look set to raise the full amount of investment they require, assuming they can agree terms with investors they met on the night.
Unlike Dragons’ Den, at Beer’s events there is no pressure to seal the deal on the night. Steve explains that
“a competent angel investor will want to meet with the entrepreneur at least twice, and conduct their own due diligence before considering investing. The best investments are those that take time, because they ensure that the entrepreneur and investor are a good match, which sets them in good stead for the future.”
In the last 2 years Beer has raised well over £18m for around 100 companies. Their 50% success rate for securing funding is more than double the industry average, and Steve believes that the Investment Evenings play a key role in securing funds for entrepreneurs. Beer’s next Investment Evening is due to take place on May 10th at HBJ Gateley Wareing in Manchester, and events are planned for Liverpool and Leeds later in the year.
For information on how to become a Beer & Partners client, or to registering as an investor, visit www.beerandpartners.com