Envestors to operate YABA

On my Inventors Club website, I described a business angel as  

"a wealthy individual who wishes to invest in a new business. Typically, he or she may well have already built up and sold a business and will therefore have acquired skills, knowledge and experience that can be shared with the new business. According to the British Business Angels Association ("BBAA"), the industry association for business angels, a typical investment will be between £10,000 and £750,000 in return for which the investor will expect a proportionate share of a new company's capital and maybe a seat on its board. The investment may be made by the angel individually or as part of a syndicate of angels and other investors."

I added that most business angels belong to networks some of which are regional and I referred to the Yorkshire Association of Business Angels ("YABA") as an example.  I also wrote a little primer on angel investment in "On the Side of the Angels" on my former chambers website on the 8 July 2011,

A notice on the YABA website states:

"Additionally, as of 1 April 2013, Braveheart’s wholly-owned subsidiary Envestors Limited has acquired the rights to operate the Yorkshire Association of Business Angels (‘YABA’) from Yorkshire Association of Business Angels Limited and will combine this with the YABA secretariat, previously operated by VFM.

Scott Haughton, a director of Envestors, said: “YABA has been adapting its business model to develop its longer term sustainability. Envestors is ideally placed to power the growth and sophistication of YABA with increased deal flow and syndication opportunities for its members alongside Envestors’ extensive private investor network.”

So what does this mean in practice for local start-ups and entrepreneurs?   

Envestors describes itself as:

"an award-winning investor network dedicated to helping find quality investment opportunities for its network of 1000 private investors and 30 family offices. We specialise in raising from £300k – £1m in younger companies, and from £1m - £10m in more established companies. We work across most industry sectors with investee companies ranging in size from the smaller, earlier stage, through to the more mature. Investments usually qualify for EIS (Enterprise Investment Scheme). Aligned to our investors, we seek outstanding management teams capable of delivering their stated business objectives."

Its holding company, Braveheart Investment Group plc, was formed in 1997 and has been quoted on the alternative investment market since 2007. It manages around £120 million and offers equity, loan and mezzanine funding to SME as well as advice on corporate finance and investment readiness. 

The company from which Envestors took over the management of the YABA network was VFM.   Those letters appear to stand for Viking Fund Managers which is another Braveheart business. Yet another is Finance Yorkshire which offers seed corn funding, business loans and equity linked investments of between £100,000 and £2 million.

On its "latest deals" page YABA reports four transactions between 15 Feb 2012 and 26 Feb 2013. I shall follow this page with interest over the next 12 months and report back in 2014 as to the practical effect of the new tie up.

Incidentally, both business angels and entrepreneurs seeking angel investment require advice on company law, contracts, employment, tax and, of course, intellectual property.   I can help with IP and I have written a short article "What Business Angels and VCs need to know about IP" which can be downloaded from the JD Supra website.  Now that I am in 4-5 Gray's Inn Square I have colleagues who can help with all these other issues.   Should anyone require advice or representation on any aspect of angel investment or launching a new business, please call us on 0113 320 3232, 01484 599090 or 020 7404 5252 or fill in our contact form.  Our chambers are developing a strong presence in Yorkshire and the Humber and can see you in conference in Bradford or Huddersfield as well as London.

If you want to talk to me about this article, you can reach me through my contact form or call me on any of the above numbers.  You can also follow me on Facebook, Linkedin, twitter or Xing.

Angel Networks in Yorkshire

An "angel" is a wealthy individual who invests in start-ups and early stage businesses. The term probably comes from the stage. It is an actors' reference to those who support new productions and, thus, thespian livelihoods, as in: "Oh, you are such an angel, darling." According to the Annual Report on the Business Angel Market in the United Kingdom: 2009/10 published in May 2011 there were about 4,544 members of angel networks in the UK in 2010. They fill a gap between friends, fools and family who tend to provide seed funding and private equity and venture capital investors.

Why People become Business Angels

Unlike theatrical angels who were attracted as much as anything by the smell of greasepaint and the thrill of attending a first night without any expectation of every seeing their money again, business angels expect a healthy return. According to Professor Robert Wiltbank who wrote "Siding with the Angels" , a research report published by NESTA (National Endowment for Science, Technology and the Arts) and the British Business Angel Association ("BBAA") in May 2009, British business angels are attracted by such tax schemes as the Enterprise Investment Scheme ("EIS") and the enterprise management incentives ("EMI"). Others relish the challenge of a second or subsequent career in a new business having made their pile in a previous one. Yet others who attribute their success to a mentor or investor in their own businesses say they wish to give others a start or put something back into society. Yet others have seen their fellows do well out of investing in a new company and decide that they could do likewise.

Angel Networks

In recent years some but by no means all angels have begun to flock into networks that prepare and present new investment opportunities to their members. Those networks do not usually make investments of their own or even advise angels on individual investments. The decision whether or not to invest is left to each individual investor. The networks screen and filter the proposals, offer some education and training in investment to their investing members and probably, most importantly, put investors in touch with each other so that they can compare experience. Some of those angel networks are national such as Advantage Business Angels and Beer and Partners. Others are local such as YABA (the Yorkshire Association of Business Angels) in Yorkshire and the Humber. Our chambers through the NIPC Inventors Club is compiling a list of business angels broken down by region and function.

Approaching Business Angels

There are several ways of approaching business angels but the way that I would recommend is through at least one of the networks. It is in your interest as well as the networks and their members to read everything that appears on the website before picking up the phone or filling out the contact form. Most carry information that is very useful to entrepreneurs. I would commend in particular YABA's business plan template. Another way is to seek an introduction through an intermediary. I have been known to do that though I usually refer clients to an accountant, solicitor or other professional first. yet another way is through a network that enjoys good links with angels such as Connect Yorkshire, Bmedia, the Leeds or Sheffield inventors clubs or Gumption Networking. Angel News circulates proposals to subscribers and I have even seen a postcard bulletin board at the Said Business School during the Oxford Venturefest.

What happens next

If a network is prepared to present your scheme to its members the next stage they may offer help in refining your business plan and preparing your pitch. If they think you need professional help they may introduce you to one of their associated law firms, patent agencies, product development consultants or accountancy practices. And then they will invite you to pitch. To give you some idea, one that I attended a few years ago took place at a university staff club. After a good buffet lunch we were offered four short presentations on propositions ranging from a new age magazine to opera in the workplace after which investors were invited to talk to the entrepreneurs individually in an exhibition area.

Further Information

If you want to know more about angel investment you could do worse that read my article "On the Side of the Angels" and "Where are you going to get funding?" and the introduction to funding and angels on our Inventors Club website. So far have only got details of two angel networks for Yorkshire and the Humber (namely YABA and South Yorkshire Business Angels) but several national networks such as Angels Den and Beer & Partners have local representatives in our county.

We are also getting to know angels both within and outside the angel networks so you can also call us on 0113 320 3232 or through our contact form. We advise, assist and represent both angels and investors on issues relating to legal and technology issues and we have a network of colleagues with world class expertise from the Bar and other professions who can assist with all company formation, investment, patent, design and trade mark registration, product design and development and taxation including EIS, EMI and the patent box concessions.