Successful equity crowdfunding platform Crowdcube has shared a guide on Angel investing in partnership with What Investment magazine. The document features an introduction from Doug Richard who was one of the original “Dragons” on the BBC show “Dragons Den”. Richard now works with entrepreneurs by running a school for start-ups. He has also published a book on how to start a business.
The guide which is UK specific in some respects as significant tax incentives exist for investors willing to risk funds in small companies. These programs allow for dramatic tax relief by reducing capital gains taxes with investments in start up companies.
The guide quickly acknowledges that most start-ups fail. But with a balanced portfolio approach the average return, according to a report from Nesta and UKBAA, was 22%. It is noted that 9% of exits produced an incredible return of ten times the capital invested.
Typically Angel investors are high net worth individuals who are looking for a high return but frequently the investors are very interested in helping these businesses become successful. It is not always about the money. Site like Crowdcube allow investments for as little as £10 but the platform has seen an increase in wealthy but time poor types which leverage the technology of crowdfunding to seek out these kinds of alternative investments.
The UK has been a global leader in equity crowdfunding in many ways. This document is well worth a read for companies interested in crowdfunding their business but also opinion makers who are interested in the crowdfunding revolution occurring in the United Kingdom today.
The entire document is available for download here.