Business angels – some interesting facts
At a recent presentation given by Bill Morrow, the owner of Angels Den business Angel’s Group, some interesting statistics were revealed about the Group’s members:
– They have 5000 business angels on their books; the average deal is £208K for 22% of the business
– They will sift an average of 114 business proposals a week
– Angels who receive 12 minute pitches at selected events are carefully sifted
– They charge £850 for two pitches and give the entrepreneur a coaching session before the pitch. They take 5% fee for the money (Bill said if you need £100K ask for £105k…)
– Their top 500 angels have over £250k to invest which represents less than 8% of their total wealth
– The number 1 reason they invest is not to make money, it is to have fun (otherwise they would die of boredom!)
– Most startlingly, the average age that an Angel dies is 52. Heart attack is the primary reason
Having seen many clients sell their business over the years, only to dabble in other businesses in industries they have no knowledge of (and often squander a large part of their wealth in the process), none of the facts about the angels themselves surprises me (except for the average age of death- which I am double checking!)
The fact that the main motivation is the avoidance of boredom rings very true for many people. I can’t help thinking that the whole business angel world will forever be misunderstood as a result of its popularisation for mass TV audiences, as I explained in a previous blog.
To me this is all the more reason for successful business owners to stick with what they know and have been successful at for years, and to look at alternative succession planning options such as employee ownership that we advocate at K&H with Income & Share Ownership Planning (ISOP), so they can avoid the boredom and temptations of investing in ill-chosen businesses which may erode their hard-earned savings pot!
My thanks to Mike Casey of Futurenova Ltd for relaying this information to me.