UK Angels still active during Lockdown — but startups need to be quick
A survey of UK Angel investors regarding their investment strategy during the COVID-19 pandemic has found that over 65% of Angels investors are continuing to invest in startups during Lockdown, but with predominantly new deals. Many are completing more deals and increasing their cheque size by as much as 18%. However, the pandemic has reduced their total capital to invest in 2020 by just over 61%, while just under 60% think the effects of COVID-19 will negatively affect their ability to invest for the rest of 2020. Over 250 Angels completed the full survey in the last two weeks, after TechCrunch exclusively published it.
These are the findings of new UK initiative Activate our Angels (AoA). The initiative comes just as the UK government’s “Future Fund” for startups, which has been criticized as being inadequate for the needs of Angel and Seed-stage startups, is poised to be launched some time this week.
AoA was started by Nick Thain the former CEO and co-founder of GiveMeSport, which was acquired last year and includes representatives from 7percent Ventures, Forward Partners, Portfolio Ventures, ICE, Foundrs, Punk Money, Humanity, Culture Gene, Barndance, Bindi Karia and Stakeholderz.
Activate our Angels started its campaign just under two weeks’ ago with the goal to give founders actionable data to help them make funding decisions, during and post-lockdown.
The survey shows that while angels are currently investing, founders will need to lock this funding down fast, as 59% of Angels surveyed says their future investing will be negatively affected the longer the lockdown goes on.
This becomes more important if a startup has raised under £250,000.
Furthermore, the survey concluded that Angels are investing 18% more per deal and have increased the frequency of deals in Lockdown by over 122% from 0.27 deals per month in 2019 to 0.6 deals per month in the last 3 months.
Angels are looking for increased runway and revenue generative businesses, and they’re seeing reduced valuations and smaller rounds.
Additionally, Angels are told the survey that they have 61% of the capital to invest in 2020 compared to 2019. This suggests that Angels are “making hay while the lockdown-sun is shining” said the survey.
Consequently, Angels will have significantly less money for the rest of 2020.
For start-ups that have not raised yet, the findings suggest they should do their first round as soon as possible.
For start-ups who have already raised, this impending angel capital crunch ￼makes initiatives such as the forthcoming government-backed Future Fund as important as ever, says the survey.
“If Angels are not investing in Lockdown, they are holding cash and waiting to be confident that Covid-19 is over. The best way to contact them is via an introduction/recommendation, email or linkedIn, not via Social Media,” it added.
The results from the survey have been summarised below.
● 66.7% of Angel investors are still investing during Lockdown
○ 77% of those are investing in new deals
○ 23% of those in existing portfolio deals
● 33.3% of Angels are not investing in Lockdown
○ 71% of those are reviewing deals
via Twitter – TechCrunch https://techcrunch.com
May 18, 2020 at 06:09PM