A recently released report has uncovered that the source of investment in UK start-ups shifted in 2021 for the first time in a seven-year period. Prior to last year, most equity deals came from crowdfunders in Britain, but statistics show they have been overtaken by high-net worth individuals, commonly referred to as “angel investors”.
The analytics revealed that, by number of deals, wealthy individuals were responsible for more funding activity than established crowdfunding platforms. The study suggests that this change is due to a legitimate increase in activity, but is also impacted by more enterprises selecting to make angel investor participation public.
Investors injected over double the capital into private British companies in 2021 than they did in 2020, showing a rise from £11.3 billion to £22.7 billion. Venture capital (VC) funds and private equity (PE) maintained a substantial lead over other types of funds.
However, while PEs and VCs retained their position as the most active type of investor, all categories experienced increased activity in 2021, especially wealthy individual investors. The angels finished on 602 deals, almost doubling numbers for 2020 and exceeding the number of deals from crowdfunding platforms such as Crowdcube and Seedrs.
Angel investing of this magnitude is considered a strong indicator of a burgeoning and healthy start-up scene. High net-worth individuals here in the UK often seek out investment advice in Shropshire, Hampshire and other counties from wealth management firms. Able to offer an expert and unbiased opinion of investment opportunities, they can explain the potential risk and returns involved.
