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New multi-million pound fund to boost angel investor activity in Wales; The fund and new support network also want to attract angel investors outside of Wales.

Byline: Sion Barry

A new fund that aims to significantly boost the amount invested by angel investors into growth firms in Wales has been launched.

The Welsh Government's [pounds sterling]8m Wales Angel Co-investment Fund, which will be managed by the Development Bank of Wales, will seek match funded investment from angel investors a so providing a financial fire power of at least [pounds sterling]16m over the next five years.

And it comes as a new network for angel investors has also been established. Angels Invest Wales, a wholly-owned subsidiary of the development bank, will bring together syndicates and facilitate a not just with the support of the new fund a increased investment across Wales by angel investors, who are often successful entrepreneurs.

The fund will be looking to invest between [pounds sterling]25,000 to [pounds sterling]250,000 per deal a match funded by angels.

It is hoped that the Wales Angle Co-Investment Fund will support up to 80 businesses and create and safeguard 375 jobs over the next five years.

The focus of Welsh angel activity has previously been managed through the xenos, the Wales Business Angel Network.

As a highly mobile source of investment, angel investment is often driven by environment and return as opposed to specific business sectors or locations. The development bank estimates that business angels co-invested more than [pounds sterling]4 million alongside them during 2017/18.

Economy Secretary, Ken Skates said: "I am pleased to launch the development bank's new business angel network, along with the new [pounds sterling]8mWales Angel Co-investment Fund, which will be an important and valuable addition to our business and wider entrepreneurial support system in Wales.

"The network will work to match Welsh entrepreneurs seeking finance and expertise, with business angels and syndicates, who are actively seeking to invest in the brightest and best opportunities Wales has to offer.

"It is an approach that is endorsed by the BeTheSpark initiative and one that is internationally recognised as supporting economic growth in a way we know can make a huge difference to the survival chances of businesses.

"I am committed to ensuring that our SMEs have the access to finance they need to enable them to start-up, strengthen and grow and as set out in our Economic Action Plan, the Development Bank of Wales, working in parallel with Business Wales, is right at the centre of our work to deliver this."

It is estimated that [pounds sterling]1.5bn is invested annually in the UK through angels with around 18,000 active angel investors.

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Giles Thorley, chief executive of the Development Bank of Wales, which has its headquarters in Wrexham and is wholly-owned by the Welsh Government, said: "Business angels are increasingly being recognised around the world for their role in supporting economic development. Indeed, Scotland has a particularly active angel community led by LINC Scotland and there are a number of networks around the country.

"The new fund will give Wales a competitive edge; enabling us to encourage angel investment and provide essential equity funding for ambitious start-up and growth companies in Wales. We'll be investing between [pounds sterling]25,000 and [pounds sterling]250,000 on a match funding basis at a minimum of 1:1 alongside a support programme that ensures business needs are being met.

"Business angels typically come with a wealth of experience having successfully operated their own businesses or have been part of a successful management team. These skills are then shared with the businesses themselves through management advice, mentoring and networking. This is the key differentiator which increases the chances of angel investments being successful as many early stage businesses will have inexperienced management teams."

Professor Dylan Jones-Evans, whose access to finance review for the Welsh Government, highlighted a lack of angel investor activity in Wales compared to other parts of the UK, like Scotland, said: "With 58 new investors signed up, this promises to address the poor record of its predecessor xenos in supporting funding within early stage firms in Wales.

"Certainly, this initiative is long overdue and we can only hope that it will close the business angel funding gap with the rest of the UK and help the entrepreneurial talent we know exists across Wales to grow their businesses."

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Seve Holt, director Angels Invest Wales: "Angels Invest Wales is part of the development bank focused on enabling, co-ordinating, supporting and ultimately enhancing angel investment activity in all regions of Wales.

"Early stage businesses in particular often face barriers to finance as they are still in the development stage, in an emerging market, or not ready for mainstream funders.

Angel investors plug this gap and the new Wales Angel Co-investment Fund will ensure that a more vibrant angel investment market can be created. We are keen to develop the investor ecosystem in Wales and are actively looking to build a strong network of lead investors for this fund."

The application process for the Angel Co-Investment Fund will open on 1 June.

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Title Annotation:Business
Publication:Wales Online (Cardiff, Wales)
Geographic Code:4EUUK
Date:May 25, 2018
Words:864
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