Angel flights fully booked
Thursday, 24 February 2011 | Kath Walters
Money is running out at many of the 13 groups of angel investors – wealthy individuals who invest their own money
in new companies – across Australia, choking off one of the few forms of early capital for entrepreneurs.
The millions of dollars these groups have invested since forming is now fully invested. When the angels sell out of
these companies, they will re-invest in new companies. Until then, many can’t invest.
Angels are a major source of funds for entrepreneurs, according to a recent survey of angel investors by the
Australian Association of Angel Investors (AAAI), investing about $3 million a year in amounts between $25,000
and $1 million.
Leaders of the groups revealed their lack of new funds at a recent AAAI annual conference. A small amount of
federal government funding to administer and advertise angels groups would attract new investors, replenishing
funds for new companies, the association’s chief executive, Ruth Drinkwater, says. However, neither the AAAI nor
any of the groups receive any federal government support.
Scotland is one of the world’s most successful angel investment nations. Nelson Gray, executive director of LINC
Scotland, a peak body for angels, says government-funded angel groups are essential to making angel capital
available to entrepreneurs. They educate angels about how to make successful investments, making them more
likely to invest, and create awareness among the leaders of new companies on how to prepare for investment by
angel investors, he says.
Some groups have capital. Sydney Angels is trying to secure the last $3 million for a $10 million “side-car” fund that
will invest whenever the individuals in the Sydney angels make a deal. Western Australian Angels is just starting up.
Melbourne Angels is still looking for deals.
Kath Walters
BRW – http://www.brw.com.au/p/sections/fyi/angel_flights_fully_booked_nLloFOoqxP4jCMNdqGQN4K?hl