UK: MARRIAGE POSTPONED - COMPANIES AND CAPITAL.

UK: MARRIAGE POSTPONED - COMPANIES AND CAPITAL. - It's axiomatic that the smaller the business, the greater the difficulty of raising funds. A start-up may need only a few thousand pounds-worth of seedcorn in order to get off the ground, but at this leve

It's axiomatic that the smaller the business, the greater the difficulty of raising funds. A start-up may need only a few thousand pounds-worth of seedcorn in order to get off the ground, but at this level the banking system is almost wholly unable to help. What the ambitious entrepreneur could need is a business angel, to put up the money in return for a piece of the action. But how is the entrepreneur to go about finding a compatible angel? And how is the angel to identify a - for him - really interesting opportunity?

It was previously estimated that there are as many as 50,000 well-heeled individuals in the UK with a potential £3 billion available for investment in private companies. A recent survey commissioned by Venture Capital Report (VCR), probably the UK's best known business introduction agency, suggests that the total sum available could be considerably greater than that. The survey also found that, contrary to earlier assumptions, business angels do not confine themselves to companies down the road, but will range far and wide in search of a good prospect. However, this does little or nothing to improve the chances of the right investor hearing about the right needy company.

VCR's Dr Hamish Stevenson argues that, in its efforts to encourage investment in small industry, the Department of Trade and Industry merely fragmented the market, by bringing about a proliferation of small local introduction bureaux. A majority of the angels who responded to the VCR survey would like to see the formation of a single national network, enabling them to pick and choose between investment opportunities anywhere in the land. Stevenson, too, would 'like to think that a national scheme will be created' - and help to create a more entrepreneurial climate in Britain.

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