Big themes for a big year!

The outlook for angel investing has never looked better.  Everywhere I go I get told about new angel groups, new initiatives and more.  We are seeing a new choir of angels emerge from the world of our crowdfunding brethren and they in turn are serving angels, especially groups like Syndicate Room.

Meanwhile our Venture Capital fund manager friends are taking a greater and greater interest in angel investors, not just for their cheque books but also for their deal flow and skills.  Parts of the crowdfunding market are already blending with parts of the angel market. This trend will accelerate.

2016 is going to be very exciting indeed!

It’s always dangerous making predictions about the future but I am going to have a go anyway!

1.            We will see literally dozens of angel clubs set up by little groups of angels.  Scotland of course developed this model years ago, but for the rest of the UK watch out for a group springing up near you soon.  (And if you want to know about what is going on in the West Country let me know and I will tell you).

2.            Expect to pal up with a VC near you and take advantage of the opportunities to co-invest alongside the VC community.  CoInvestor will do a lot to enable this.

3.            It will become normal to invest online.  The Envestors my-edash platform will become a very useful tool for all those new angel groups! It will become distinctly uncool if you are have not been a lead investor for a fundraising on Syndicate Room.

4.            There will be a resurgence of the active angel who gets stuck into working with founders growing a business rather than just passively investing. 

5.            2016 will be the first real year of reckoning for the equity crowdfunding world.  Expect a lot of noise about exits as well as campaign volumes surging forward – don’t be surprised if by the end of this year we see the total money raised by crowdfunders exceed £500m – beating VCT investment volumes.  The big crowdfunding platforms will fund at least one £10m round sometime this year – maybe even four or five.  VCs take note.

6.            Put some money aside to invest in the first flotation of a peer to peer lender on the London Stock Exchange.

7.            Anticipate a call from the taxman about your EIS investments and more – HMRC will start going after more and more people now they are have got their teeth into the really big players and have established some case law!

8.            Look out for lots of interesting research being published and make sure you read it.  CrowdRating is about to launch a very interesting report based on the companies that raised money via the crowd in 2015.  It will tell you a lot (I know because I am writing it!), but there will be others who will give you information and ideas that will improve your investment knowledge.

9.            Expect structural change in EIS in the sense of who is using it and how.  We should see the numbers for 2015 massively increase in terms of volumes of investors (thanks to the crowd) but possibly lower overall investment by value. In 2016 expect this trend to evolve and maybe £2bn or more invested over the year.

10.          Angels locked into deals will increasingly champ at the bit for the right to have partial exits whether as part of a funding round or through the Asset Match platform in between funding rounds.  Entrepreneurs and their lawyers should start thinking about this now – rewriting articles of association to enable partial exits (with obvious restrictions like not selling to a competitor) from day one and changing extant articles if these rights are not already in place.

11.          The development of the markets will lead to the FCA calling for a complete rethink over regulation of private equity for private investors and start a consultation nicknamed “PIPE” – private investment in private equity, which will last for at least two years. (isn’t this a pipe-dream? – haha! Ed.)

12.          What will be the big investment sectors to invest in?  Space and driverless vehicles.  Internet search and cyber security.  Intelligent clothing. Gastronomic tech – especially addressing issues around obesity.  Ageing and caring.  Respectable film and entertainment. Insurance tech. Blockchain. 

And the big one!

The UK has a referendum on whether or not to leave the EU coming up.  Expect the debate to get hotter and hotter amongst both entrepreneurs and angels about whether or not it will be better to stay in or get out.