The intelligent & relevant news service for investors and entrepreneurs
AngelNewsletter - No.93
 
 


Dear Reader

Uncertainty in the weather; uncertainty in the economy; certainty that angels and private investors supporting venture capitalists are in prime position to take advantage of the climate to build a portfolio which will be set to make great returns.  We are seeing a new level of friendship evolving between equity investors as we all come to realise we have more in common than not, especially when times get tough.

For those of you without deep reach into the angel market in particular, this month we list the 10 angels you need to know.  And we have also written about The joy of...VCTs!

If you are into technology the MOD might be interested in check our our Grant Aid article this month and of course if you are investing or planning to invest a review of our investment adverts will be of interest.

Next week Pitching for Management is in Guildford and Plymouth - I recommend you try to make it along if you can - there are some superlative companies pitching.  

Have a great weekend and God Bless Her Majesty on her Diamond Jubilee

All the best

Modwenna Rees-Mogg, Founder CEO, AngelNews
The relevant news service for entrepreneurs and investors
Email: modwenna@AngelNews.co.uk  |  Tel: +44 (0) 1761 452248


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The 10 angels all entrepreneurs should know
 

Whether you are fundraising today or tomorrow, here are the 10 angels whose attention we think you should catch!

Who What they look like Why
     
The Blakey Brothers
Avonmore Developments
Michael Blakey is the front man of this duo of brothers who have been serial angels for over a decade and are a couple of the most respected investors on the block
Martin Bowles
Horatio Investments
Based in deepest Somerset, Martin Bowles heads up Horatio Investments which is quietly pursuing a strategy of becoming the most prolific and successful angel investor in the UK
Sherry Coutu Sherry is high profile, charming and extremely intelligent. If you have in internet or social media business, winning Sherry as one of your investors will be a real feather in your cap
Peter Cowley
Martlet Corporate Angel
Peter has been instrumental and still runs Martlet Corporate Angel the most well known organisation that provides corporate angel investment – mainly co-investing with other angels Martlet’s position as a division of Marshall of Cambridge is one of the most innovative angels knocking around the UK today
Nelson Gray The big man in the Scottish angel investment scene, Nelson is one man entrepreneurs must have in their address books north of the border (see Waddell below)
Dale Murray Charming, smart and current Business Angel of the Year, Dale is on everyone’s invite list and she should be on yours too.
Jon Moulton With 60 current angel investments – Jon is one of the most prolific and sharpest investors in the UK. 
Rajat Malhotra
Wren Capital
Rajat, founder of Wren Capital is a relative newcomer to the angel scene, but has rapidly earned the respect of all the angels who come across him.
John Waddell And the other Scot you need to know is John Waddell and his gang of prolific angels at Archangels
Stephen Welton
Business Growth Fund
The BGF is the BFG VC hanging out in the angel world these days.  Keen to do deals with angels – get Stephen’s attention and he will find you the angels he is working with that can back you and ensure that the BGF will be there for the bigger round of funding you will inevitably need as you grow
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100 rules for entrepreneurs
 
 
I have enjoyed reading Neil Lewis's book
"100 Rules for Entrepreneurs"

With his permission from this month onwards we will summarise one of his rules each month in our AngelNewsletter.

Rule 2

Never blame the market

Never blaming the market goes hand in hand with the very essence of being an entrepreneur: paving your own way, driving your own success, building your own great business. So don’t fall for the excuse.


If you don't want to wait for further rules, we can sell you a copy of this book for £9.00+VAT + P&P.  Please email books@angelnews.co.uk for more information.

The joy of ….. VCTs
 
I spent a very enjoyable morning last week at the excellent AIC VCT conference and it reminded me that I had not written much about VCTs recently. 

The VCT industry is a £2bn+ market these days with a full spectrum of investment strategies, ranging from the most conservative possible under the scheme, to ones which even angels would call risky. Many angels I speak to are a bit sceptical of VCTs – particularly those who invested in new funds way back in the early days of the scheme and who are therefore sitting on capital losses. But observing the industry today, I think it’s now time that the angel market took another look at it.  Many of the problems that caused the poor performance in VCTs in the past have now been dealt with by the fund managers, and for the smart investor, there is now a real opportunity to pick up an investment in a transparent, established portfolio of companies at a significant discount to NAV if you are prepared to buy in the secondary market.

It is amongst the VCTs where, as a private investor, you are still most readily going to be able to win some personal exposure to growth stage investments, which will help to balance your portfolio in terms of stage risk.  As you can select from so many VCTs in terms of their sector specialisms– from the generalist to the specialist, it really is possible to use VCTs to fill strategic holes in your investment portfolio.

Many of the established VCTs are trading on reliable tax free yields of 5-8% or more, so holding a handful of the best VCTs will nicely diversify the average risk profile of a typical angel portfolio.  And the misconception that you cannot get out of a VCT investment is no longer true. All the quality VCTs offer share buy back schemes where they mop up shares held by the market makers.  You may not be able to sell today, but you will be able to sell in the foreseeable future, especially if you phase your exit in a planned way. 

The share buy back schemes usefully help to underpin share prices - which typically hover around 10-15% discount to NAV – which will protect your downside risk.  And perhaps if more secondary market investors come into the market, we might see share prices rise and discounts start to lessen, which would be a good thing in my view.

Of course, there is no point in everyone madly rushing to buy in the secondary market as VCT shares are still pretty illiquid; most investors in the good funds hold the shares for income just about forever!  And beware of inadvertently buying at too high a price because of a temporary spike in the market thanks to this article!!

If the secondary market is not attractive, there are still a number of offers still open from the 2011/12 season (a list can be found here: http://www.taxshelterreport.co.uk/vct_openfunds.htm).  The attraction of the 30% upfront tax break on up to £200,000 investment might appeal to some of you, especially if you are looking for long term ways to shelter tax now that loss relief on EIS is under debate.

If you did not already know it, I can assure you that your fellow angels are already amazingly well penetrated in the VCT world.  Across the dozens of fellow NEDs at the conference today, there were many faces that would be instantly recognisable in the angel world too. You can be pretty sure that if you invest in a VCT managed by one of the well known fund managers, there will be an angel on its board or very close by.   Indeed a surprising number of VCTs have quietly built “clubs” of angels that sit next to them, co-investing in deals or just providing a bit of high quality input now and then.  The most well known of these is, of course, Octopus Venture Partners, but it’s well worth putting in a call to the manager of the fund you may be looking to invest in to find out how they are interacting with angels these days. 

Even if a fund manager does not have a specific strategy to co-invest with angels, I am certain you will get a warm reception as a potential intelligent shareholder in their fund, especially if you make the effort to turn up and contribute positively to the AGMs and regular shareholder events.  Once they get to know you, they might even be interested in looking at some of the companies you have backed – provided only that you don’t bring them one with a shareholder list almost as long as a typical VCT shareholder base!

Now that the VCT market has truly matured it really is possible to compare apples and pears.  The AIC website is a good place to start http://www.theaic.co.uk/Search-for-an-investment-company/Sector-specialist-search/VCT-companies/Company-list/?all=1&sid=VCT&structure=2 as it lists all the VCT funds managed by AIC members – this group represents some 89% of the entire VCT industry.  You can usefully sort the list inter alia by NAV, share price returns, and yield. 

HM Government restated once again today that it is firmly committed VCTs as a vital part of the venture ecosystem.  The tax breaks on offer are not going to go away anytime soon.  Angels can take comfort from this.

And a big investor in VCT land is someone who invests £50-100k into a fund per year, so if you write a cheque for this amount, you will be noticed!

If you want some background to the VCT market and the good it is doing for the UK economy, check out It may surprise you where we have provided a link to the recent AIC report on “Delivering growth; The role of VCTs.”  Not all venture capitalists are vultures – you will see from the report that, like you, VCT fund managers really are delivering on the implicit promise accepted when they took the government’s venture capital tax break shilling.

Modwenna Rees-Mogg is a non-executive Director of Albion Prime VCT.

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It May Surprise You

Delivering growth: The role of VCTs

All investors should check out the AIC’s latest analysis of the VCT market.  

It makes for interesting reading, especially the statistics on where and what VCTs invest in, employment growth and R&D expenditure by VCT portfolio companies.

Knowledge Peers has just launched a research project into 'Innovative Routes to Funding'
 
Knowledge Peers has just launched a research project into 'Innovative Routes to Funding' - whether it's Angel Investment, Venture Capital or Crowd Funding, we're looking for investors and businesses to share their experiences with us.

For more information about the project and to hear about how you can get involved, click here, or email owen.williams@knowledgepeers.com

Brokers Tips

AngelNews works alongside Daniel Stewart to publish their morning reports on the state of the stock market and to give you up to the minute research on stocks and shares covered by Daniel Stewart's team of analysts.

We have been publishing these morning reports for two years now, and here is an idea of how some of the shares have performed over April since Daniel Stewart tipped them:

The best tips in April:

Date of Tip Company Share Price at time of Tip Target Price Advice Price at 15.05.12
04.04.12 BTG BGC 338p 375p BUY 373.10p
11.04.12 Porvair PRV 111p 159p BUY 120.50p
12.04.12 Magnolia Petroleum MAGP 1.1p 3.6p BUY 1.35p
26.04.12 Probability PBTY 74p 132p BUY 75.25

We also have Daniel Stewart's 'BROKERS TIPS' as a general sector page on our website where you can view a full list of Daniel Stewart's tips.

Don't Miss Out

Here are some upcoming industry events that we think you might be interested in:

 

Pitching for Management

 
     
 

Building management teams - in association with Russam GMS, Intramezzo & UKBI

Get involved the fastest growing entrepreneurial event sweeping the nation!


Upcoming events:


Tuesday 22nd May - Plymouth
Wednesday 23rd May - Guildford
Monday 28th May - Birmingham
Thursday 31st May - London

Connecting local businesses with top-level senior talent Pitching for Management enables diverse fast-growing companies to pitch for top-level executives to join their teams for salary, sweat equity, commission and/or bonus schemes. So if you are a company looking to build/expand your management team or an executive looking for a new career challenge, Pitching for Management is the perfect event for you.

Book now: http://angelnewsevents.eventbrite.com/?s=3240613 or call 01761 452248

 

 

Digital Shoreditch - Evening Networking Dinners

 
     
 

'Talent' Dinner! - Wednesday 23rd May, 6:30pm to 8:30pm

'Identity' Dinner! - Friday 25th May, 6:30pm to 8:30pm

'Growth' Dinner! - Monday 28th May, 6:30pm - 8:30pm

Central Working at Google Campus, 4-5 Bonhill Street, London EC2A 4BX.

Join fellow Digital Shoreditch entrepreneurs for exclusive networking dinners enabling innovators to leverage the expertise of other digital creatives and business professionals! We are confident this will provide stimulating business discussions. Book now, limited spaces available per night.

To find out more about the events and to book your ticket, visit: http://digitalshoreditch.com/tickets/#dinner

 

 

Urbano evening networking event

 
     
 

Wednesday 30th May, 6pm:
Furniture Makers' Hall, 12 Austin Friars, City of London, London EC2N 2HE

Join around 60 businesses from across all sectors of London business for Urbano's next monthly networking evening at The Furniture Makers' Hall in the City of London.

You will enjoy a couple of glasses of complimentary wine and nibbles, the best networking in London where everyone gets to meet each other in a friendly, unhurried and informal way.
This event is free for members and only £25 for non-members taking advantage of the early-bird price!

To find out more and book your ticket: http://www.urbanonetwork.co.uk/events/112

 

 

Life Science Leadership Series - Infectious Diseases and Vaccines

 
     
 

Thursday 17 May, 9am start.
Clare College, Cambridge

Q: What have the following companies in common?
Novartis, Enanta, Bristol Myers Squibb, Inhibitex, Celgene Corporation, Aliva Therapeutics, Gilead, Pharmasset, Roche, Anandys, Vertex and Alios

A: They have all been involved in major Hepatitis C drug development-related deals in the last year, with a collective headline value well in excess of $10Bn*
The size and frequency of announced deals in the Hep C space has been astonishing over recent months. Whilst there is scope for this to continue, it may also serve as an indicator of the growing interest and potential returns available in the anti-infective field with the discovery and development of new strategies of therapeutic intervention.

It seems timely therefore, that the next One Nucleus Life Science Leadership Series event to be held in Cambridge on 17 May 2012 is focussed on Infectious Diseases & Vaccines.

For further information on this event and to register, please click here.

 

 

Funding landscape for manufacturing and technology SMEs

 
     
 

Creating growth, particularly in the current economic climate is the challenge of every CEO. Be it new product development, incremental changes to existing technologies or open innovation; they all have their own challenges and of course their own funding requirements. So, what will you do and how will you fund it?

This initiative will seek to answer these two key questions.

Welcome to the Funding landscape for manufacturing and technology SMEs.  Pera Technology has partnered with a series of High Street banks and the Business Growth Fund (BGF) to give registered SMEs the opportunity to have their ideas expertly assessed and to fully understand and access the growth funding landscape; be it grant, debt or equity.  By registering your details you will receive a telephone consultation to consider your growth objectives, access a range of stakeholders and have the opportunity to attend one of the many regional breakfast meetings being held around the UK. 

Register online to secure your place and request a one-to-one conversation with one of our experts.

For further information, please contact Rachael Shilham on 01664 501268.

 

Granted - your key to unlock funding

In this monthly column Grant Aid intends to bring you news of lesser known grants that will enable you to grow bigger, better, and faster! The grant details may be obtained from the official grant websites listed but additional insight is on its website at www.grantaid.com. There too you can obtain news covering the full spectrum of business grants and subscribe to its newsletter.

A Source of Grants and a Ready Made Market – The MoD

We have talked about the MoD before but with a string of new calls by the MoD Centre for Defence Enterprise (CDE) just announced it seemed appropriate to remind everybody of the huge potential the MoD offers.

In summary the MoD CDE often in conjunction with the Technology Strategy Board offers various levels of support. They may offer:  -

  1. Grants at a percentage of the R&D to be carried out.
  2. Under the SBRI Scheme they may offer contracts for carrying out R&D which cover 100% of the costs.
  3. They offer testing facilities and evaluation facilities for MoD related projects.

Above all else they offer a readymade market for the successful products. Remember the UK is also a huge exporter of defence related products and acceptance by the UK MoD may well lead to NATO and indeed worldwide adoption of your product.

The most important point to emphasize is that the MoD in its defence procurement covers a huge range of products. By no means are all of them in themselves warlike or defence related directly. Thus a whole range of products from fabrics for clothing, nutrition, medical support, software systems to name but a few are all products which have huge non-defence applications, indeed often greater than the defence requirement but which the MoD is keen to acquire. A good example is given by Kraft Maus (who, incidentally, are advertising for funding via Angel News). They have developed integrated sustainable energy supply units from renewables such as wind and solar for use in off grid applications. Clearly this has worldwide applications in Africa, India and indeed other remote locations but one of their first customers has been the MoD which is going to use the system in Afghanistan to provide remote power facilities to our troops.

Below we list very briefly some recent calls that are open or are about to open but space does not allow detailed information and you will have to go to the CDE website for full details.

http://www.science.mod.uk/engagement/enterprise.aspx

You should be aware that although specific R&D and procurement tasks are carried out against particular calls there is also an open call facility whereby any idea, product or R&D project which you think has potential MoD applications may be submit to them at any time for evaluation by the Centre for Defence Enterprise and apply through that mechanism for a grant.

We have experience of obtaining grants in this field and in particular have ex-MoD personnel available to advise not only on grant matters but who are able to guide you through the complexities of dealing with the MoD.

Current or imminent calls
CDE Call for Research Proposals in Extremes Of Defence Medical Capability
Armour and Protection Science and Technology Centre
Improving the Mobility of Land Forces
Defence Implications of Emerging Technologies (DIET) in Advanced Design, Fabrication and Manufacture
See http://www.science.mod.uk/events/events_and_calls.aspx

The above is purely indicative and again you are strongly recommended to go to the MoD Centre for Defence Enterprise site for full information and ideally register for their newsletter.

We are very happy to help you through this complex process which can, however, be exceptionally rewarding.

ARTEMIS Joint Undertaking 

ARTEMIS research projects are industry-driven projects in the field of embedded systems, which aim at generating new and improved technologies and in applying them in products, processes or services; in order to strengthen the competitiveness of European industry, improve sustainability, and facilitate the emergence of new markets and applications that respond to societal needs.

The ARTEMIS Joint Undertaking is the Public Private Partnership with the European Commission, 23 ARTEMIS Member States and the ARTEMIS Industry Association that represent 200+ members. The ARTEMIS JU supports R & D Activities through open and competitive calls and the 2012 call opened on 19 April. It will close on 6 September 2012
The 2012 call recognizes 8 key areas

ASP1: Methods and processes for safety-relevant embedded systems
ASP2: Embedded Systems for Healthcare and Wellbeing
ASP3: Embedded systems in Smart environments
ASP4: Embedded Systems for manufacturing and process automation
ASP5: Computing platforms for embedded systems
ASP6: Embedded Systems for Security and Critical Infrastructures Protection
ASP7: Embedded Systems supporting sustainable urban life
ASP8: Human-centred design of embedded systems

The key areas are, as can be seen, very very wide ranging!

The programme is open to large and SMEs and, with industrial collaboration, academic bodies. Grant funding in the UK will be at 50% for commercial bodies and upto 100% for academic bodies.  The overall EU budget is in excess of Euro138 M for the 2012 call

The Programme requires a minimum of 3 independent legal entities in 3 different Artemis states to submit an application.

This year there will be a single stage application to be submitted by 06-09-12.

The sheer scope and potential ubiquity of embedded systems means that the possibilities for UK companies both large and small are massive and this programme is an ideal stepping stone for UK SMEs to get involved at a European level with strong financial support .

We can help with partner searches and formulating JVs and collaborative applications.

Further information from:
http://www.artemis-ju.eu/call2012
http://www.artemis-ia.eu/
http://www.artemisia-association.org/

That's neat, that's neat...

Venture Capital Fund

Glass Firm’s Management Team scoopes Exit Award

The management team of a Smethwick company has scooped a top award after being nominated by venture capitalist specialist Midven. Midland Industrial Glass, one of the largest independent specialist glass processors in the UK, has picked up the British Venture Capital Association (BVCA) Exit Management Team of the Year Award for the Midlands region.

Private Equity

Graphite Capital provides £21m expansion funding for Rex Restaurants, owner of The Wolseley and The Delaun

Graphite Capital, the UK mid-market private equity specialist, is investing £21 million in Rex Restaurant Associates Limited (Rex), the company owned by Chris Corbin and Jeremy King, widely regarded as London’s most successful restaurateurs over the past 30 years.

Computer Software

Harbottle & Lewis advises Brandwatch on $6m investment led by Nauta Capital

Harbottle & Lewis has advised social media monitoring company, Brandwatch, on its $6 million investment led by Nauta Capital.

The funding will fast track Brandwatch's plans to bring innovative products to market, expand internationally and bolster its sales and marketing teams.

Media & Communications

Kingswinford 4D Technology Company on the World Stage

A Kingswinford company which is one of the world’s leading suppliers of simulation and cutting edge technology for the entertainment industry has created six jobs as business continues to boom. Simworx, based on the Pensnett Trading Estate, is budgeted to turn over £5m in 2012. The company, which has provided media-based installations to theme parks and visitor attractions across the UK, has secured a raft of recent contracts.

Company Profiles

New companies signed up this month:

Business Angel Network

Anjos do Brasil

Business Services

Coracle Online Ltd

TutorNet Ltd

PollMe

Computer Software

Elitesuite Ltd

Capture Ltd

Consumer – Leisure

SmartDarts4Kids

Jeannie Ltd

Local Secrets Ltd

Consumer – Retail

T-Box Ltd

Energy

Kraftmaus

Epistemy

Environmental

Wessex Eco Fuels

Financial Services

Emerald Knight Ltd

Health and Beauty

Gentle Hands Ltd

Internet

Civico Live Ltd

Media and Communications

Plandoh Ltd

Magic Solver

Medical Instruments

Halliday James

Applied Functional Materials Ltd

European Technology for Business Ltd

Trillian Ltd

 Property

Smart Architects

Technology

NexEnergy Ltd

Clyne Energy Ltd

Digilets

The Float Yard Ltd

Makur Media

Transportation

Carkoon

D Log Systems Ltd

Something to make you smile

Angela Merkel decided to take a holiday in Greece to get away from the trials and tribulations of the Euro Crisis

On approaching customs her passport was examined and the officer said

"Name" : "Angel Merkel"
"Nationality" : "German"
"Occupation" : "No, just visiting"

Alfred Hitchcock said

"Drama is life with the dull bits cut out"

But Lucifer says

"Angel investing is venture capital with the dull bits cut out"

Musing


If they squeeze olives to get olive oil, how do they get baby oil?

 

 

 

 

 

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