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Business angels

Business angels

Business Angels and access to finance

Business Angel is as “A knowledgeable private individual, usually with business experience, who directly invests part of his or her personal assets in new and growing unquoted businesses. Besides capital, Business Angels provide business management experience for the entrepreneur.” 1

Broadly speaking, Business Angels concentrate on the ICT, Biotech and Healthcare sectors. The majority of funding takes place at the Seed and Early Stage/Start-Up level although in a number of countries Business Angels are also involved in expansion stage finance. Given the need to provide advice to companies, Business Angels tend to support ventures that are in their own region.

Available data

The information presented on this page is adapted from the European Angel Investment Overview by EBAN .2. The analysis by EBAN was based on data collected through EBAN members and credible sources across Europe (e.g. government agencies, Bureau Van DIJK (BvD)).

Generally the Business Angel market is characterised by an informal nature resulting in an absence of reliable statistical data. An important source of information in relation to the visible part of the Business Angels’ market is the annual survey by EBAN. However, the survey has a number of limitations including the fact that not all responses are complete and that there are differences from year to year in terms of the number of responses per country. Thus, the data from the EBAN survey represents a low end estimate of the number of Business Angels in Europe.

Scale of the Business Angel market

There were 460 BANs in Europe in 2012. The number of BANs in Europe in 2012 was seven times greater than the number recorded in 1999. Apart from 2005-2006 there has been steady growth in the numbers BANs in Europe – growing on average 14% annually. This growth trend is presented in Figure 1.

Figure 1: Number of BANs in Europe 1999 - 2012

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Investment by Business Angels

Figure 2 shows that €509 million was invested by BA members in 2012. This represented a 19% increase on the year previous. In 2010 investment was at the lowest level recorded over the time series 2007-2012 at €157 million. BAs members’ investment is classed as the visible market – EBAN estimate that the invisible market in 2012 was worth €5.1 billion. Therefore the visible market only represented 10% of the total estimated angel investment market in 2012. It was estimated that the total angel investment market in the USA was €17.4 billion in 2012. This illustrates the small scale of European BA activity which only equates to 30% of USA activity.

Figure 2: Amount invested by BAs members – visible market

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Figure 3 presents data on the number of BAs in individual European countries and their respective amounts invested in 2012. UK and France had the greatest number of BAs at 4,200 and 4,150 respectively. The average number of BAs per country was 1,070. As well as having the greatest number of BAs the UK also had the largest investment by BAs at €68.3 million and this was followed by Spain at €62.5 million. Greece, Lithuania and Luxemburg had the lowest levels of investments and BAs.

Figure 3: Investments made and BAs operating through BANs, 2012

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Figure 4 shows investment amount as a percentage of GDP in 2012. Finland had by far the greatest proportion of investment as a proportion of GDP at 0.015%. Italy, Luxembourg, France and Austria had the lowest volumes of investment in terms of GDP. Figure 5 shows the number of business angels per country scaled by GDP. Lithuania, Finland, UK and Ireland had the largest ratio of BAs to GDP. At the opposite end of the spectrum Greece and Italy had the lowest ratio of business angels to GDP.

Figure 4: Investments by BAs per country as a percentage of GDP, 2012

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Figure 5: Number of BAs scaled by GDP per country, 2012

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The average investment by BANs in Europe was €1.1 million. Figure 6 provides more detail on average investment by country. The average investment by BANs for Finland was significantly above estimates for other countries at €7.1 million. On the opposite side of the scale Luxembourg had the lowest estimate at €267,000. A more comparable cross country comparison is provided when BAN investment amounts are taken as a proportion of GDP – see Figure 7. Here we see investments by BANs in Lithuania and Finland are greatest per euro of GDP at 0.004% and 0.0037% respectively. Germany, France, Italy and Spain have the lowest BAN investment levels as a proportion of GDP.

Figure 6: Average investment amount by BANs

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Figure 7: Average investment amount by BANs (% of GDP)

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In summary the European angel market broke the €5 billion barrier in 2012. The data showed an increase in the number of BAs and BANs in 2012. EBAN suggest the growth was mostly due to increased activity in the €10-30 million investment range markets with substantial increases seen in countries such as Finland (+42%) and Ireland (+61%). There were also some increases in established markets such as in the UK (+12%) and Spain (+5%). In contrast decline in investment was also observed in some countries such as France where investment fell in 2012 compared to the previous year (-10%).

Additional information about the Business Angel market in Europe can be found in a study by CSES on European Union (EU) Member States’ Business Angel markets and policies3. Much of the data used in the study was based on the 2010 EBAN (the European Trade Association for Business Angels, Seed Funds and other early Stage Market Players) Statistical Compendium and supplemented by fieldwork across eight Member States (France, Italy, Germany, Netherlands, Poland, Spain, Sweden, United Kingdom (UK)).

1) See:

2) EBAN (2013)

3) Report published on:

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