What is an angel network, and how should we define them?

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An angel investor refers to an individual investor, who is usually but not always a high net worth individual. (Read here for more info on how Beauhurst can help you target HNWIs). An angel network meanwhile is an official collection of angel investors, who share introductions to companies and often syndicate their funds into a single pot and make joint investments. They are a looser, more personal alternative to a VC fund, with financial backing coming from a network of individuals as opposed to large institutional or corporate investors.

The top 10 uk angel networks*

London Business Angels (london, since acquired by newable)
88
24Haymarket (London)
87
Archangels (Edinburgh)
79
TRI Capital (Melrose, Scotland)
60
Equity Gap (Edinburgh)
49
Dragon's Den (London)
44
QVentures (London)
43
Cambridge Angels (Cambridge)
39
Kelvin Capital (glasgow)
39

*Based on equity finance deals  since 2011, where the investors have been publicly announced in the press, or where they’ve privately disclosed their activity to Beauhurst. A significant number of investors do not announce their activity. These figures should be taken as indicators only.

For example Cambridge Angels, one of the UK’s most active angel networks, describe themselves as: 

“A group of more than 60 high-net worth investors who have proven experience as successful entrepreneurs in technology, internet, software, hardware, digital healthcare and life sciences. Members invest in and mentor high quality start-up and early-stage companies in these sectors in Cambridge, London, Oxford and throughout the UK.”

An angel network can be an important source of funding to entrepreneurs and startups, either as an alternative to or in conjunction with traditional VCs. Indeed, a significant number of HNWIs have made their money through exiting on their own startups, meaning they can act as an invaluable source of experience and advice to their investees.

Some basic similarities exist between angel network and venture capital funds. JamJar Investments, for example, is the fund set up in 2013 by the founders of Innocent Drinks, following their sale of the company to Coca Cola in 2010. Prior to this, they had invested in companies together as angels. In this sense, JamJar started out like a very small angel network for three wealthy individuals.

Angel network or crowdfunding platform?

Comparisons can also be drawn between crowdfunding platforms such as Crowdcube and Seedrs, in that both syndicate capital from individual investors into a single investment. Experienced angel investors frequently use these platforms to purchase equity in young startups. However, angel networks are semi-permanent, usually an exclusive collection of investors who regularly invest together. To join an angel network is also more difficult than joining a crowdfunding platform – generally, you will require either significant wealth or significant investment experience. 

SyndicateRoom’s crowdfunding model sits somewhere between the two, letting the crowd invest alongside more established business angels.

Current angel networks who subscribe to the Beauhurst platform include 24 Haymarket, who use our software for a wide range of uses, including sourcing new deals and tracking their current investment portfolio. If you’re part of an angel network then it’s well worth considering our investment intelligence software.

Angel networks and the local economy

Angel networks often play vital roles in supporting local high-growth businesses. As this piece on Cambridge’s tech scene in CapX states:

“what’s perhaps the most remarkable feature of Cambridge’s growth is that it’s been achieved without dosh borrowed from or invested by those running the City of London, 57.8 miles due south. Indeed, the reverse may be true: much of Cambridge’s phenomenal success over the last 40 years is due to the fact that the brilliant academics, who have come up with ground-breaking ideas from Concorde’s droop nose to Bluetooth, have banded together with like-minded backers and business angels to find – and fund – their own eco-system.” 

This is certainly borne out by our data. One of the UK’s 10 most publicly active angel networks is located in Cambridge – Cambridge Angels. Cambridge Capital Group are also very active in the city’s investment scene, and have participated in 32 publicly announced deals since 2011. Scotland’s Archangels, Equity Gap, and Kelvin Capital have also been very active in Glasgow and Edinburgh. 

Clearly, local business ecosystems thrive with support from angel networks.
Disclaimer: it’s important to remember that these figures are based on deals where the investors have been publicly announced in the press, or where they’ve privately disclosed their activity to Beauhurst. Most investors hold their cards close to their chest. These figures should be taken as indicators only.

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