Not the heaven-sent kind, but a new generation of private investors known as business angels.
Leading the way in the Midlands is a syndicate of private investors known as the Minerva Business Angel Network. Based at the University of Warwick Science Park’s Venture Centre, in Coventry, the group of more than 100 investors has committed almost £1.5 million to promising young companies since 2010.
But who are the people behind the investment, and what encourages them to part with their hard earned cash?
John Dixon, 67, is one of the men filling a funding gap created as traditional sources of funding tighten their purse strings.
The Kenilworth resident knows a thing or two about rising from humble beginnings to success – making him an ideal mentor and a perfect fit in the world of start-up investment.
After leaving school with no qualifications, Dixon worked as a milkman and a carpet fitter before rising to establish Coventry-based IT firm Computime and grow it to a company with a turnover of more than £1 million employing more than 20 staff.
He has since sold the business and now he is hoping his experiences as well as his investments can help fledgling businesses in the area replicate his success.
“Being an angel investor is not just about giving money to promising companies with the hope of seeing a return, it’s also about being a mentor,” said Dixon.
“That’s my area of interest, being able to share my experiences and help others avoid mistakes I made. Ultimately to help them succeed.
“The desire is obviously to see a return on our investments, but I think this is an extremely challenging and exciting way of remaining involved with the business community.”
With business loans increasingly difficult to secure on reasonable terms, Dixon believes the shift towards private investors as a source of funding for fledgling business is likely to be a long term one.
“Angel investment is a route more and more early stage businesses are being forced to go down and it’s something the government is encouraging,” said Dixon.
“There are always risks for investors but 30 per cent tax relief on Angel investment previously and recent legislation which allows investors to claim up to 50 per cent on seed funding is a real help and encouragement for people considering becoming a business angel.
“The benefits are not just for the investor, businesses are likely to get expertise and hands-on support from a private investor that would not be available through more traditional sources of finance.
“But of course there are big incentives for investors, and in the current climate, those willing to become business angels are likely to see a much healthier return on their cash than if they left it lying dormant in a bank or building society.”
So far Dixon has invested in three early stage businesses, with another potential deal on the horizon.
Companies to have received his support are social media management software firm Crowd Control HQ, broadband technology company Genesis Technical Systems and beauty therapy business Sparcana.
He has already started to see the benefits of his and Minerva’s investment for the firms, notably Stratford-upon-Avon based Sparcana which was named as Minerva’s fastest growing investment in 2011 after successfully launching its products in the UK, Italy and the USA.
“I think the biggest frustration for many of the investors is that we would like things to happen more quickly, but when companies do achieve success and we have played a hand in that, it is extremely rewarding,” said Dixon.
“But we are there to provide guidance, an outside objective voice, and we recognise the importance of doing things correctly rather than hastily.”
Many will be familiar with the BBC’s Dragons’ Den and the internal battles which go on between the competing investors, but how much of that is reflected in the real world?
“I would say only about 70 per cent of the discussions you see between the investors is replicated in our real life investor seminars.
“Of course a lot of what you see on the television is created for entertainment purposes – we don’t have piles of cash on the table and we are not allowed to try and undercut each other and get the best deal for ourselves.
“Joining a Business Angel Network like Minerva has been great for me- I get to see lots of well prepared opportunities and benefit from the experience of other investors.
“It’s enjoyable and, of course, we are there ultimately to try and help companies succeed – even if we do not invest personally.”
For more information on how to become an angel investor or receive support from the Minerva Business Angel Network visit
