Nation of angels: the unsung heroes of Britain’s economy


Britain is becoming a nation of angels. As business formation rates continue to hit new records, more and more individuals are choosing to invest in Britain’s engines of growth: entrepreneurs.

Anecdotally, the impact of recent market developments and government policies have led to an explosion in angel investing – particularly when examining the Seed Enterprise Investment Scheme or the rise of crowdfunding. But until now, research that examines the impact of such developments and the level of angel investing was lacking.

To fill that gap, the Centre for Entrepreneurs (CFE) and the UK Business Angels Association (UKBAA) partnered to undertake a major research project under the ‘Nation of Angels’ campaign banner. From May 2014 to January 2015, UKBAA and CFE worked with the Enterprise Research Centre (ERC) to understand the changing demographics and behaviour of angel investors, the relationship between angels and their investee companies, and the economic and social impact of angel investing.

Our research achieved unprecedented scale. A record 403 angels responded to our online survey to share details of their portfolios. 42 angels engaged in in-depth telephone interviews to discuss their investment behaviour and 28 syndicate and network leads representing 8,000 angels engaged in a separate online survey.

The resulting report, ‘Nation of angels: assessing the impact of angel investing across the UK’ makes for encouraging reading. The findings – summarised by CFE and UKBAA in a shorter report – demonstrate the crucial role that angel investors are playing in the economy, bringing risk capital, business experience and skills to support the growth of small businesses.

Women now represent one in seven angel investors, double the rate observed in 2008. Angels are also getting younger – three quarters of angels are aged under 55, with 44% under 45 and 16% under 35 years. In London and the South East the shift is more pronounced, with 46% of angels aged under 45 compared with 37% across the rest of the UK.

Alongside this changing profile, angels are making more investments than ever before. The median number of investments is now five – double that reported in 2009. Angels are increasingly investing outside their home region (58.4%) and outside the UK (22.3%) , showing geographic distance is becoming less important in investment decisions.

Both the Seed Enterprise Investment Scheme and the Enterprise Investment Scheme play a big role in encouraging investment activity. Nine out of ten angels have used one of the schemes and 80% of investments in angels’ portfolios were made under EIS (55%) or SEIS (24%). The research also found that one in four angels have invested in ventures that have a social impact. Social impact investments accounted for 24% of deals by angels in the study.

The research also finds that angels are far more confident in the growth status of their portfolios, with some 45% of angels reporting that their investee businesses are showing high growth and with higher expected rates of return than found in earlier studies.

We are grateful to Barclays, BVCA, Deloitte and ESRC for sponsoring this project; to Prof Mark Hart, Prof Mike Wright and the ERC for undertaking the research and to Maserati for providing prizes to incentivise angels to engage in the survey.

Read the CFE & UKBAA summary report: Nation of Angels – the unsung heroes of Britain’s economy

Read the full ERC paper: Nation of angels – assessing the impact of angel investing across the UK.

Nation of angels: the unsung heroes of Britain’s economy


Britain is becoming a nation of angels. As business formation rates continue to hit new records, more and more individuals are choosing to invest in Britain’s engines of growth: entrepreneurs.

Anecdotally, the impact of recent market developments and government policies have led to an explosion in angel investing – particularly when examining the Seed Enterprise Investment Scheme or the rise of crowdfunding. But until now, research that examines the impact of such developments and the level of angel investing was lacking.

To fill that gap, the Centre for Entrepreneurs (CFE) and the UK Business Angels Association (UKBAA) partnered to undertake a major research project under the ‘Nation of Angels’ campaign banner. From May 2014 to January 2015, UKBAA and CFE worked with the Enterprise Research Centre (ERC) to understand the changing demographics and behaviour of angel investors, the relationship between angels and their investee companies, and the economic and social impact of angel investing.

Our research achieved unprecedented scale. A record 403 angels responded to our online survey to share details of their portfolios. 42 angels engaged in in-depth telephone interviews to discuss their investment behaviour and 28 syndicate and network leads representing 8,000 angels engaged in a separate online survey.

The resulting report, ‘Nation of angels: assessing the impact of angel investing across the UK’ makes for encouraging reading. The findings – summarised by CFE and UKBAA in a shorter report – demonstrate the crucial role that angel investors are playing in the economy, bringing risk capital, business experience and skills to support the growth of small businesses.

Women now represent one in seven angel investors, double the rate observed in 2008. Angels are also getting younger – three quarters of angels are aged under 55, with 44% under 45 and 16% under 35 years. In London and the South East the shift is more pronounced, with 46% of angels aged under 45 compared with 37% across the rest of the UK.

Alongside this changing profile, angels are making more investments than ever before. The median number of investments is now five – double that reported in 2009. Angels are increasingly investing outside their home region (58.4%) and outside the UK (22.3%) , showing geographic distance is becoming less important in investment decisions.

Both the Seed Enterprise Investment Scheme and the Enterprise Investment Scheme play a big role in encouraging investment activity. Nine out of ten angels have used one of the schemes and 80% of investments in angels’ portfolios were made under EIS (55%) or SEIS (24%). The research also found that one in four angels have invested in ventures that have a social impact. Social impact investments accounted for 24% of deals by angels in the study.

The research also finds that angels are far more confident in the growth status of their portfolios, with some 45% of angels reporting that their investee businesses are showing high growth and with higher expected rates of return than found in earlier studies.

We are grateful to Barclays, BVCA, Deloitte and ESRC for sponsoring this project; to Prof Mark Hart, Prof Mike Wright and the ERC for undertaking the research and to Maserati for providing prizes to incentivise angels to engage in the survey.

Read the CFE & UKBAA summary report: Nation of Angels – the unsung heroes of Britain’s economy

Read the full ERC paper: Nation of angels – assessing the impact of angel investing across the UK.