The UK Business
Angel Market 2020
british-business-bank.co.uk
The UK Business Angel Market 2020
British Business Bank
Contents
Contents
Foreword
3
UK Business Angels Association introduction
4
Executive summary
5
Introduction
6
Sizing the market
9
A tale of two surveys
10
1. Investing in the time of Covid
11
1.1. New and follow-on investments
12
1.2. Targeted smart money
13
1.3. Portfolio performance
14
1.4. Exits
16
1.5. Government schemes
16
1.6. Challenges and outlook for angel investing
18
2. Investments 2017-2019
19
2.1. Volume of investments
20
2.2. Value of investments
20
2.3. Performance and exits
21
2.4. Sectors
23
2.5. Decision making
24
3. Our angel population – 2019 survey
25
3.1. Gender
26
3.2. Ethnicity
28
3.3. Age
29
3.4. Experience
30
3.5. 2020 Survey
30
4. Geographic spread of angels
31
5. The impacts of angel diversity
34
5.1. Age and experience
35
5.2. Impacts on volume and value of investments
35
5.3. Decision making
37
6. Female angels
38
6.1. Why are there not more female angels?
39
6.2. Are there any encouraging signs?
40
6.3. What is the industry doing to improve gender diversity? 41
2
british-business-bank.co.uk
The UK Business Angel Market 2020
3
British Business Bank
british-business-bank.co.uk
Foreword
Foreword
The British Business Bank is committed
to developing clusters of angels and
enhancing business angel networks
across the UK, as part of its mission to
make finance markets work better for
smaller businesses.
This UK Business Angel Market report, now in its
second edition and published in collaboration with the
UK Business Angels Association (UKBAA), highlights
the important role angels play in seed and early stage
investment. Given the private nature of the majority of
angel investments, it offers a unique lens on trends in
such investments in the UK.
To build on the UK’s position as a scientific superpower,
we need to provide the world-class businesses of the
future with the capital they need to start-up, scale-up
and remain anchored in the UK. Business angels are the
most significant source of equity investment in start-up
and early stage businesses seeking to grow, also
providing ‘smart capital’, alongside equity finance, as
they bring business experience, strategic advice and
networking opportunities.
A changing market
A record £8.5bn of equity finance was invested in 2019,
showing the strength of the UK equity ecosystem in
supporting scale-up companies. but there were
indications that the UK equity market was changing
even before the emergence of Covid-19.
The amount of annual investment going to seed stage
companies declined by 1% in 2019, however. Although
the rate of decline is small, this ends continuous year
on year increases since 2011, and coincides with 2019
being the first year where the number of companies
receiving follow on rounds exceeded the number of
companies raising equity finance for the first time.
It is, however, encouraging that business angels appear
to be responding positively to the Covid-19 pandemic,
with more than half making an investment between
April and July this year, nearly half planning to build
their portfolio in 2020/21 and nearly three quarters
confident about future growth.
The British Business Bank is committed to addressing
imbalances in the demand for and supply of capital so
that funding flows to talented entrepreneurs,
irrespective of their background or business location.
This report shows early signs of improvement in the
diversity of funders but many challenges remain in
achieving greater representation of diverse groups of
both funders and founders of smaller businesses.
Supporting angels in the regions
Access to finance for businesses across the UK is
inconsistent, with uneven regional and local
distribution. For seemingly near-identical companies,
where they are based has a significant impact on the
type of finance and the finance providers they access,
and this is particularly the case for equity finance.
Angels can be key to creating and building regional or
local finance ecosystems as they make investments,
exit, and then recycle their capital into new ventures.
They have historically been heavily concentrated in
London and the South East, alongside established
groupings in cities such as Oxford and Cambridge,
meaning many areas of the country have,
unfortunately, missed out on the benefits they bring.
To address this, the British Business Bank supports the
Angel CoFund and established its £100m Regional
Angels Programme in 2018. The programme seeks to
develop clusters of angels outside of London and the
South East so that other regions can start to build the
vital ‘grassroots’ components of an equity ecosystem,
particularly benefiting early stage businesses seeking
smaller investment sizes.
Providing this angel funding can be especially beneficial
in developing science and technology businesses, such
as prospective globally competitive companies in
frontier sectors such as Biotech, Deeptech, and Clean
Renewable Energy. By supporting these important
sectors, we can help maintain the UK’s position as a
technology centre and provide the high-quality jobs and
tax base necessary for a strong and advanced economy.
We look forward to working with the UK’s business
angel community and the UKBAA as we continue to
improve this vitally important area of the finance market
so that smaller businesses can access the finance they
need to grow and thrive.

Catherine Lewis La Torre,
CEO, British Business Bank
The UK Business Angel Market 2020
4
british-business-bank.co.uk
Uk Business Angels Association Introduction
UKBAA
Introduction
Angel investment is a vital part of the
supply chain of risk capital to innovating
growth focused small businesses across
the UK and this has been a lifeline to
many businesses during the crisis.
We are very grateful for the support of the British
Business Bank once again in carrying out this research
on the angel market in 2019 and the additional survey in
July 2020. This will enable us to better understand the
trends, opportunities and needs across the angel
landscape and identify what more can be done to build
further angel investment to support economic recovery.
The pandemic has presented new challenges to angel
investors over the past months, both in relation to
their own personal investment capacity and with
many businesses in their portfolios requiring support.
Angels have demonstrated throughout this period the
important role they play in, not only bringing much
needed capital, but providing business experience and
strategic advice, drawing on their own experience of
dealing with previous economic crises. It is heartening
to see that the angel community has shown such
resilience during this period and that many angels
feel positive about making new investment in the
coming months.
The research results demonstrate the continuing
disparities in levels of angel investment across the UK
regions and whilst we had a relatively low participation
from regional angels in the survey, we must continue to
conclude that many regions outside the Golden
Triangle lack sufficient angel investment. It will be vital
at this time as we seek to rebuild local economies to
increase the number and capacity of angels in the
underserved regions to support the growth needs of
small business. The BBI Regional Angels Programme is
an important instrument in bringing much needed
co-investment funds alongside angel investment.
We hope that many more angel groups across the UK
regions can take advantage of this in the year ahead.
UKBAA has for some time been working to increase
access for female founders to angel investment and we
have been focusing on growing the number of female
investors as a key part of the solution. We are proud to
have been a founding signatory of the Investing in
Women Code which resulted from the Rose Review and
pleased that many members of our investment
community have also now signed the Code. It was good
to see that more women investors participated in the
research, but there is still considerable progress to be
made to increase the number of female angel investors
across the UK, as well as investors from ethnic minority
groups. Nevertheless, we know that many of our angel
groups are taking direct actions to increase diversity,
both in relation to their investments and in their investor
base and we will look to build on their work and
achievements going forward.
We are extremely grateful to our members and those
in the wider angel community who supported this
research and generously gave their time to complete
the survey, both in 2019 and the more recent one in
July 2020. On behalf of UKBAA, I should like to thank
once again the British Business Bank for providing this
most valuable research report and look forward to
our continuing collaboration.

Jenny Tooth OBE,
Chief Executive, UK Business Angels Association
British Business Bank
The UK Business Angel Market 2020
5
British Business Bank
british-business-bank.co.uk
Executive summary
Angel investors play a key role in the
early stages of the equity finance
landscape with their ability and
willingness to make very high-risk
investments. They are also often referred
to as ‘smart capital’ because, alongside
the equity finance they provide, they
bring business experience, strategic
advice and networking opportunities.
Executive
summary
Due to the private nature of the vast majority of angel
deals, data on the size of the angel market is patchy at
best. This report takes a look at a range of data sources
and estimates of the size of the UK angel market in an
attempt to quantify the support they provide privately
owned businesses with high-growth potential with our
best estimate at around £2bn a year. The UK angel
investor community continues to lead the way in
Europe no matter which data source you choose,
though it is still some way behind the US.
Given the lack of data, this report presents the findings
of two surveys of business angels commissioned by
the British Business Bank with support from UK
Business Angels Association and independently run by
PwC Research. The findings reflect the responses of
over 650 business angels and provides data and
insights into angel activity both before and after the
onset of Covid-19.

The report highlights several key themes:
The UK business angel market has continued to
support businesses since the onset of Covid-19
During these unprecedented times, angels are still
using both their money and expertise to support UK
SMEs. At the time of our second survey (July 2020)
over half of our respondents had made at least one
investment and over half had increased their
engagement with their investee businesses. This latter
point could prove the most important during these
challenging times given the years of experience the
average angel possesses.
This support is despite half of our respondents reporting
a negative impact from Covid-19 on their investments,
with only one in ten seeing a positive impact due to the
current Covid-19 situation. While angels have continued
to invest in and support businesses, this may have
impacted the value of initial and follow-on investments
made by angels since the end of the last tax year, both
of which are lower than in previous years.
Angels have had consistent sectoral preferences
throughout both surveys
Our angels invest across a broad range of sectors, but
the same four sectors received investment from the
largest proportion of our respondents both pre and post
the onset of Covid-19. These sectors were Healthcare,
Digital Health and MedTech, Bio Tech, Life Sciencesand
Pharmaceuticals, Software as a Service and FinTech.
Our latest survey found that these were the sectors that
the majority of angels considered were performing
relatively well since April 2020, suggesting it is unlikely
they will fall from favour anytime soon.
There is a lack of gender and ethnic diversity in our
angel sample but some positive signs
The demographic profile of angel investors from our
initial survey was largely consistent with that of
previous studies - predominantly male, White, aged 55
years on average and concentrated in London and the
South East. However, the percentage of females in our
sample increased and over half of our respondents
stated they were seeing an increase in the number of
female investors in their network over the last three
years. Furthermore, four in ten stated they always or
frequently co-invest with female angels, either in a
syndicate or via a mixed investor group.
As with the investors who identify as female, the
number of ethnic minority respondents has increased
since the 2017 survey but Black and Asian investors
remain underrepresented. This mirrors the Diversity VC
and OneTech survey of venture capitalists which
suggested that the London VC community is also
disproportionately White British.
Business angels remain confident about the future
While the respondents from our latest survey noted
challenges and changes to come, the majority of angels
(72%) are confident about the future growth in value of
their portfolio and the opportunities for both
investments and exits. Around a half of our
respondents are open to building their portfolio in the
current climate while only 12% said they did not intend
to make any further investments.
This report yet again highlights the importance of angel
investors to the UK economy. The British Business Bank
has been and remains committed to supporting UK
angels through our programmes whenever possible.
The information we receive via this survey, alongside
our more regular interactions with angel finance
partners and the UKBAA, is invaluable in informing the
Bank’s and UK policy makers’ understanding of the
angel market and the challenges and opportunities
it faces.
The UK Business Angel Market 2020
6
British Business Bank
british-business-bank.co.uk
Introduction
This is the second edition of the British
Business Bank (‘Bank’) UK Business
Angel Report examining trends in UK
angel investing, which is published in
collaboration with the UK Business
Angels Association (‘UKBAA’). Due to
the lack of published angel data,
as discussed in the Sizing the Market
chapter, the reports are based on
surveys of those angels we can reach via
the UKBAA and our own programmes.
Introduction
The 2020 edition was originally due to be published in
Spring 2020 following a survey completed in the latter
half of 2019. However, given the impact Covid-19 has had
in 2020 we decided to delay the publication of the
report until Autumn 2020. This delay has allowed us to
go back out in the field with a follow-on survey designed
to gain insight into the impacts of Covid-19 on angel
investment in real-time, while the data collected during
the original survey serves as an important benchmark of
the market prior to the pandemic and gives context to
what has happened since.
As noted in the British Business Bank Equity Tracker
Report 2020, Beauhurst reported a record £8.5bn
of equity finance was invested in 2019, showing the
strength of the UK equity ecosystem in supporting
scale-up companies.1 Strong investment was combined
with an increase in the number of announced equity
deals which grew 4% in 2019 to 1,832, the highest
annual number since the series began in 2011.
Although activity has been strong overall in 2019,
there were indications that the UK equity market was
changing even before the emergence of Covid-19.
The amount of annual investment going to seed stage
companies declined by 1% in 2019. Although the rate of
decline is small, this ends continuous year on year
increases since 2011. This reversal coincides with 2019
being the first year where the number of companies
receiving follow-on rounds exceeded the number of
companies raising equity finance for the first time.
Against this wider equity background, the following
report discusses the important role angels play in early
stage investment and, given the private nature of the
majority of angel investments, offers a different lens on
trends in seed and early stage equity investments in
the UK. The survey responses received from the angel
community will act as a record of previous activity and
will help inform policy makers, both local and national,
as the situation evolves.
UK equity finance and the importance of
business angels
The UK is a world-leading place to start a business.
Despite this, UK productivity lags those of our G7
peers and the Bank’s Small Business Finance Markets
report2 notes that whilst international comparison of
UK performance in translating start-ups into scale-ups
has improved, some of the UK’s highest potential,
most innovative start-ups can struggle to scale up
because of a lack of finance.
SMEs are a crucial part of the UK real economy and
supporting scale-up SMEs could help to address
the UK’s productivity puzzle. Research has shown
that successfully increasing the number of firms that
scale-up would substantially impact job creation,
productivity and growth. As such, there remains more to
be done to deliver an effective patient capital system.
Evidence suggests that there is a lack of effective
supply of long-term investment in innovative firms
led by ambitious entrepreneurs who want to build
large-scale businesses in the UK. For a start, fewer UK
companies with high growth aspirations attract early
stage equity funding at scale, particularly relative to
their American competitors (figures 1 & 2).
Figure 1

Cohort analysis of companies receiving initial
VC funding in 2011-2012
Source: British Business Bank analysis of PitchBook
Per cent
55 57
35 36
19
22
11
11
5 5
Round 2 Round 3 Round 4 Round 5 Round 6 Round 7
0
10
20
30
40
50
60
2 2
UK
US
Figure 2

Cohort analysis of companies receiving initial
VC funding in 2011-2012
Average deal size by funding round (£ million)
Source: British Business Bank analysis of PitchBook
£ million
1 2
2 4
3
8
5
12
22
36
9
23
23
66
Round 1 Round 2 Round 3 Round 4 Round 5 Round 6 Round 7
0
10
20
30
40
50
60
70
80
UK
US
The UK Business Angel Market 2020
7
British Business Bank
british-business-bank.co.uk
Introduction
Although this can come from any combination of
venture capital (‘VC’) funds or individual investors,
business angels, defined as people who invest their
own money in businesses in exchange for a
participation in capital, have been recognised as the
most significant source of equity investment in start-up
and early stage businesses seeking to grow. This is
backed up by our survey which finds our angels are
largely investing in the initial stages of a business
(figures 3 & 4).
This is in part because at the early stages, companies
often require smaller absolute sums of investment,
but at higher risk of loss and for longer periods of time
before any return can be expected as they are farther
away from revenue or profit generation. However,
such companies are subject to information
asymmetries which can cause a structural market
failure in the provision of sufficient supply of
appropriate equity capital.
Fixed costs for obtaining information about businesses’
investment prospects mean that smaller deals are less
attractive to investors than larger deals due to relatively
high costs for investment appraisal and other
transaction costs which remain constant across
different sizes of investment. Furthermore, relatively
more information is freely available or at least readily
attainable on the viability and potential returns of
larger, older, more stable businesses than for smaller,
younger, high potential but volatile SMEs.
Figure 3

Maturity of businesses angels typically invest in
Source: The UK Business Angel Market survey 2019 (n=508)
Rescue/Turnaround
5
Growth/Scale-up
18
Later stage
16
Early stage
70
Start-up
55
0
20
40
60
80
Percentage of angels
who invest in each stage
Seed
45
Business angels, rather than legally structured VC
funds, are therefore most likely to be able to
sustainably make these small ticket, very high-risk
equity investments. Cost issues are less acute
compared to a fund of investment professionals that
must report to its limited partners and abide by
regulatory requirements. Financial incentives for
an angel are just as well aligned as with a fund,
as individuals earn profit from the successes in their
portfolio of investment companies and they only
take ordinary shares.
Angels are also typically engaged in providing support
to businesses they invest in and do so through a wide
range of ‘smart capital’. This can be just as important,
if not more so, than the finance they provide,
particularly to young companies who are finding their
way and may lack some key skills, know-how and
contacts. This has also proven to be a key role since
the onset of Covid-19, more of which is discussed in
chapter 1.
Figure 4
The equity ecosystem
Source: UK Business Angels Association
Exit
Trade sale or
MBO IPO-AIM
Angels can invest
through to Exit or IPO
Proof of concept
and start-up
Friends & family:
Credit Cards,
Grants Crowd
Up to £100k
Seed and early stage
Business Angel
Syndicate also use
Co-Investment Funds
£100k - £2m+
Early growth
Angels co-invest with
Venture Capital & Super
Angels Angel Funds
£2m+ - £3m
Formal VC and Private
Equity co-invest with
Angels, or offer liquiditY
Expansion
£3m - £20m+
Angels can pass on
batton to a bigger VC or
PE - or stay in the game.
Equity bridge
The UK Business Angel Market 2020
8
British Business Bank
british-business-bank.co.uk
Introduction
In more normal times, this advice from angel investors
can help SMEs form productive relationships and
connections with other businesses and institutions.
These links help form entrepreneurial ecosystems,
connected systems of businesses, finance providers
and other entities that influence entrepreneurial
outcomes. Chapter 4 looks at the vital role of angel
investors in regional and local entrepreneurial
ecosystems in more depth.
51% of our respondents from the initial survey said they
took an active role in supporting their businesses. The
types of experience angels share with the businesses
they invest in varies considerably and depends both on
the background and experience of the angel but also
the needs of the individual business (figure 5).
Strategic advice topped our list with 85% of the
angels who reported actively supporting businesses
offering this support, closely followed by being a
sounding board. However, angels can offer much more
specific help and guidance as shown by the fact 31%
reported carrying out recruiting of key personnel
whilst 30% helped implement management control
and reporting systems.
Not all scale-up SMEs need equity finance, be it from
an angel or elsewhere, to grow. External equity finance
is only used by about 1% of the UK small business
population and by only a small proportion of those that
fit into the standard definition of ‘high-growth’.
However, external equity becomes much more
important to firms with ambitious plans for growth and
those focusing on technology commercialisation,
where revenues often lag investment significantly.
For example, nearly half of high-growth technology
firms use external equity finance and external equity
investment is essential for firms who do not yet
generate revenues that are looking to commercialise
their R&D results.
These innovative firms have a disproportionate impact
on productivity through the new ideas that they
commercialise and bring to market. To drive
productivity, it is therefore critical that innovative UK
companies efficiently secure sufficient and
appropriate equity finance.
Figure 5

Type of experience business angels share with the businesses they invest in
Source: The UK Business Angel Market survey 2019 (n=396)
Implementing management control/
reporting systems
Access to customers/suppliers/
markets/wider business networks
85
Strategic advice
81
Sounding board
56
Access to further investment rounds
50
Specialist sector/industry knowledge
48
Operational advice
47
Recruitment of key personnel
31
30
6
Other
0
20
10
30
40
60
70
50
90
80
Percentage of angels
The UK Business Angel Market 2020
9
British Business Bank
british-business-bank.co.uk
Sizing the market
Sizing the
market
Despite the importance of angel investors, as noted by
the UKBAA, the size of the market is difficult to
calculate with any degree of accuracy. This is because
many business angels do not publicly disclose their
deals, so there are no robust figures available on the
size of the UK or any other angel market. Furthermore,
many angels invest independently and are not part of a
recognised network or syndicate. An OECD study
stated that ‘While methods of estimating the full angel
market size vary, it has been documented through
many studies over the past decade that total angel
investment is much greater than overall VC investment
in the United States and as well as in some countries
in Europe’.3
Existing providers of equity data offer a range of
estimates for the number of deals and value of the
visible UK angel market. Beauhurst, who provide data
for the Bank’s Equity Tracker reports, records angels
were involved in 404 disclosed equity deals in 2019.
The value of these equity deals involving business
angels was £1.25bn, a record year for the series.
However, because this figure is the total deal size,
and angels invest alongside other investor types like
VC funds, it does not provide an indication of the size
of angel investment itself.
PitchBook is another commercial equity data provider
and they have estimated angels were involved in 395
deals worth £345m in 2019. This includes some deals
made by angels using crowdfunding platforms. As
mentioned above, commercial data providers are likely
to underestimate the amount of angel activity in the
UK, as most angel deals are not publicly disclosed.
We don’t have 2019 data from the European Business
Angels Network (‘EBAN’) but they estimated the size of
the UK angel market at around £1bn in 2018, roughly
15% of their estimated total European market. This was
made up of £98.1m (€109.4m) visible angel investment
and the assumption that the visible market accounts
for only 10% of the total size of angel investing.4
This was an increase of 2.7% on their 2017 number.
PitchBook’s equivalent measure shows £396m of
angel investment in 2018, which is 47% of the total
European angel investment they have recorded.
The UK number was a decrease of 7% on the £427m
reported in 2017. Not only is there a considerable
difference between these two measures but they
show different directions of travel and different UK
shares of the European total too.
A further potential indicator of the size of the angel
market can be found via Enterprise Investment Scheme
(EIS) and Seed Enterprise Investment Scheme (SEIS)
data. EIS and SEIS are tax efficient benefits the UK
government offers to UK taxpayers for their equity
investment in higher-risk early stage start-ups and small
companies. EIS is designed so that a company can raise
money to help grow their business and SEIS is designed
to help companies raise money when it is starting to
trade. Our survey, in line with previous surveys, found
that 86% of respondents utilised the EIS or SEIS
scheme during the tax year (2018/19).
The latest HMRC data shows that £1.82bn was raised
via the EIS scheme in 2018/19, down from £2bn in
2017/18, and a further £163m via SEIS, a total of just
under £2bn. This was the lowest combined total since
2013/14 and followed a record year in 2017/18 (£2.2bn)
(figure 6). However, 2018/2019 is the first full year that
captures the risk to capital changes made at the Patient
Capital Review that removed asset backed EIS
investment. Given that the asset backed section of the
EIS market traditionally raised in the region of £300-
£400m, this represents a relatively small fall in the total
investment into EIS.5 While not all this will be angel
investment and not all angel investment is captured in
this data it is probably the best estimate available to
measure the size of the business angel market in the UK.
Whilst these are significant numbers the US still leads
the way. Angel investment in the US has been
estimated to be in the early-to-mid $20bn.6 However,
the UK remains the number one European angel market
no matter which measure you choose to look at.
The angel investor market is difficult to
calculate with any degree of accuracy
Existing data sources provide a range of
estimates for the visible UK angel market
The UK remains the number one
European angel market
Figure 6

Amount raised via EIS and SEIS, £bn
Source: Enterprise Investment Scheme, Seed Enterprise Investment
Scheme and Social Investment Tax Relief statistics: May 2020
0.0
0.5
1.0
1.5
2.0
2.5
(a) first full year that captures the risk to capital changes
(b) provisional data
2012/13 2013/14 2014/15 2015/16 2016/17 2017/18
(b)
2018/19
(a)(b)
The UK Business Angel Market 2020
10
British Business Bank
british-business-bank.co.uk
A tale of two surveys
As part of its mission to improve finance
markets for smaller UK businesses,
the British Business Bank commissioned
PwC Research to conduct a business
angel survey in 2019, to build on the
findings from the ‘2017 UK Business
Angel Market Survey’.7 The 2019 survey
was designed to both update the
findings of our first business angel report
and to delve into the important issues
of diversity and the role angels play in
regional and local ecosystems.
A tale of
two surveys
Via the UKBAA, our Regional Angels Programme and
the Angel CoFund, 508 business angels completed our
online survey. The survey was conducted between the
4th September and the 26th November 2019 and
asked about both the profile of the respondent and the
characteristics of their investments. Questions covered
full tax years from 2016/17 to 2018/19 and the first half
of 2019/20.
168 of these respondents also chose to complete a
telephone survey. This was conducted between the
16th September and the 29th November 2019 and
provided further insights into the location of
investments, female investors and female-founded
businesses.
This first survey was meant to form the basis of our
entire original publication but with the onset of Covid-19
and the initial lockdown we not only delayed the original
publication but soon realised this new dynamic needed
to be addressed for the industry and policy makers to
get the most out of the report. As such we made the
decision to go back out into the field with a second
survey to help our understanding of what is happening
in the angel market as a result of Covid-19.
Our second survey was online only and we had 265
business angels complete it. Of these, 102 had also
completed the original survey in 2019. The fieldwork
was conducted between the 15th July and the 2nd
August 2020. This survey also asked about the profile
of the respondent and the characteristics of their
investments in the last full tax year (2019/20) and finally
about their experiences since the end of the last tax
year and the onset of Covid-19 in the UK.
Where appropriate we have combined the two surveys
for the fullest picture but on other occasions, given the
differing sample and the unique questions in both,
most chapters of this report only utilise one of the two.
Much of the original data informs chapters 2 onwards
which now serve as an important historical benchmark
of angel activity while the second survey informed our
discussion on the role angels have played during
Covid-19 (chapter 1).

Definition of business angel used as
qualifying criteria:
One constant across the two surveys is the definition
used for a business angel. We defined this as an
individual who has made at least one equity investment
in a small unquoted business that is not owned by their
spouse, child or grandchild. The investee business may
be at start-up stage, or in the early stages of
development, or more established and looking for
further growth. The investment may be made by an
individual acting alone, or through an angel syndicate,
network or club.
Participants were required to have made an equity
investment as a business angel within the past three
years (since September 2016 for the initial survey,
July 2017 for follow-on survey) or, for a small number
of respondents, to still have an active investment
portfolio as a business angel predating this. For the
purposes of this research, participants were asked to
exclude any investments that they have made as an
individual on an online investment platform or
crowdfunding site but to include those made when
co-investing.
Angels have continued to invest, albeit at lower values
Half of angels have increased their engagement with
their investee businesses
Covid-19 has had varying impacts on industries
Investment performance by location is highly polarised
Exits have been rare, but mostly positive
Angels generally have a good level of awareness of
Covid-19 support measures
Economic uncertainty is the biggest challenge which
our angels foresee
Chapter 1.
Investing
in the time
of Covid
1. Investing in the time of Covid
The UK Business Angel Market 2020
British Business Bank
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12
1. Investing in the
time of Covid
Given the often personal nature of angel
investing and the prevalence of syndicates,
networks or clubs in the industry there
were fears that angel activity could be
seriously impacted by Covid-19. Given the
important role they play in the equity
ecosystem, as described in the
introduction, a significant decrease in
angel activity could have a lasting negative
impact on the UK economy.
Thankfully, so far at least, this has not been the case.
The level of activity from syndicates, networks or clubs
has largely stayed the same (40%) or increased (26%)
since the onset of Covid-19, with only around a quarter
seeing less interactions. Furthermore, angels are still
using both their money and expertise to support SMEs
during these challenging times.
1.1. New and follow-on investments
Angels have continued to invest, albeit at
lower values
At the time of our survey (July 2020) over half of our
respondents had made at least one investment with
the sample average being 1.5 investments, pro rata this
is above the 2018/19 rate and not out of line with the
finding from 2019/20. However, market contacts tell us
some angels have been bringing capital forward in Q1
and Q2 to support their portfolio businesses suggesting
it is unlikely there will be the same level of angel capital
available in Q3 and Q4 to make new investments.
While two in five of our respondents reported not being
impacted by Covid-19, half of angels cited a negative
impact on their level of investments, with only one in
ten seeing a positive impact. The value of initial and
follow-on investments during 2020/21 to-date is
considerably lower than previous years, sitting at an
average of £69k and £46k respectively.
The two main reasons cited by respondents for why
Covid-19 has had a negative impact were that the
economic uncertainty had affected the angel’s own
personal investment capacity and that they
concentrated on supporting and investing in their
portfolio businesses (figure 7). It should be noted that
2019/20 had already shown a small fall in these average
values to £100k and £70k from a series peaks of £108k
and £77k, possibly reflecting the increased economic
uncertainty seen in 2019.
The small number of respondents (25) reporting a
positive impact from Covid-19 gave a couple of
unsurprising reasons why, that the sectors/activities

Figure 7
Top main reasons why Covid-19 has had a
negative impact
Source: The UK Business Angel Market survey 2020 (n=130)
Percentage
of angels
55
52
18
12
9
8
6
5
5
I have concentrated on supporting and investing
in my own portfolio business
Lack of access to relevant investment opportunities
Lack of co-investment available
The sector(s) I normally invest in have been
badly affected by Covid-19
Lack of access to relevant Government measures
Lack of next stage investment
Inability to meet F2F/travel restrictions
Reduced/conserving funds
Economic uncertainty has affected my own
personal investment capacity

Figure 8
Top main reasons why Covid-19 has had a
positive impact
Source: The UK Business Angel Market survey 2020 (n=25)
Percentage
of angels
48
40
36
24
24
24
12
8
I have allocated more of my personal annual wealth
to invest during this time
Valuations have been lower
There has been a strong flow of quality investment opportunities
I have identified additional sectors to invest in that have
benefited from Covid-19
Strong levels of co-investment available
I have successfully accessed relevant Government
support measures
More time to focus on investments
The sectors/activities I normally invest in have
benefited from Covid-19
they normally invest in have benefited from Covid-19
and that valuations are lower, but also that they have
allocated more of their personal annual wealth to invest
during this time and have identified additional sectors
to invest in that have benefited from Covid-19 (figure 8).
The top sectors angels have invested in remain
consistent, with Healthcare, Digital Health and
MedTech, Bio Tech, Life Sciences and Pharmaceuticals,
Software as a Service and FinTech still attracting the
most investors. This is both consistent with previous
findings but also unsurprising given the nature of the
crisis and the impact it is having on various industries.
1. Investing in the time of Covid
The UK Business Angel Market 2020
British Business Bank
british-business-bank.co.uk
13
1.2. Targeted smart money
Half of angels have increased their engagement
with their investee businesses
Since the onset of Covid-19, half of business angels
have increased their engagement with their investee
businesses. 54% of respondents reported greater
engagement with their portfolio companies
but importantly only 12% said they have greater
involvement with all the businesses within their
portfolio (figure 9). Over half of our respondents
had prioritised between 11-50% of their portfolio
for greater support (figure 10).
Over half of our angels said those investee businesses
were prioritised as they needed support to achieve
their growth milestones, while just under half reported
they needed help to survive (figure 11). ‘Smart capital’
remains key for angels in providing support with over
three quarters of angels reporting they have provided
strategic advice (figure 12).
Market contacts have noted that for many angel
investors, whilst the pandemic may have brought a
number of specific additional challenges, having been
through the dotcom era and the previous financial crisis
has enabled them to bring valuable experience and
insights to their portfolio businesses on how to maintain
resilience and take relevant business decisions during
this period. This has included taking a lean business
model approach and lengthening the runway to the
next main funding round.
Figure 11

Basis on which investee businesses were prioritised
Source: The UK Business Angel Market survey 2020 (n=112)
Needed support to achieve their growth milestones
56
Needed help to survive
46
Likely to benefit under Covid-19
38
Had been blocked from achieving their next round of investments
29
Had been blocked from achieving exit
6
Where I can add most value/best support
4
0
20
40
60
Percentage of angels
Other
4
Figure 12

Support provided since the onset of Covid-19
Source: The UK Business Angel Market survey 2020 (n=143)
Strategic advice
77
Sounding board
69
Operational advice
43
Access to further/earlier investment rounds
39
Specialist sector/industry knowledge
38
Invested more of my own money for working capital
37
Access to customers/suppliers/markets/wider business networks
27
Implementing management control/reporting systems
20
Recruitment of key personnel
20
0
10
20
40
50
30
60
70
80
90
Percentage of angels
Other
2
Figure 9

Change in engagement/involvement with portfolio
since the onset of Covid-19
Source: The UK Business Angel Market survey 2020 (n=263)
Percentage of angels
8
37
43
12
Less involvement
No change
Greater involvement with selected businesses in my portfolio
Greater involvement with all businesses in my portfolio

Figure 10
Proportion of portfolio prioritised for
greater support
Source: The UK Business Angel Market survey 2020 (n=112)
13
51% - 75%
27
26% - 50%
31
11% - 25%
16
5% - 10%
0
5
10
15
20
25
30
35
Percentage of angels
4
Less than 5%
4
More than 75%
Mean: 30
1. Investing in the time of Covid
The UK Business Angel Market 2020
British Business Bank
british-business-bank.co.uk
14
1.3. Portfolio performance
In both the original and follow-on survey we asked
angels to rate the performance of their portfolios over
a full tax year against the previous year’s performance.
Given how little of the 2020/21 tax year had elapsed
when we carried out the second survey we did not ask
this question for 2020/21. Instead we asked the
respondents if they were seeing any geographic or
industrial differences in performance. While the
sample sizes were very small for some locations and
industries, performance was quite varied.
Covid-19 has had varying impacts on industries
Unsurprisingly, industries that rely on travel, in person
interactions or have limited remote working capabilities
have suffered the most since the onset of Covid-19
according to our respondents (figure 13). Leisure,
Hospitality and Tourism and Film, Theatre and
Entertainment have at times been completely shut
down while others, such as Property and Construction,
have been hampered by supply chain and staffing
issues as well as a lack of demand.
A higher proportion of respondents reported industries
such as Healthcare, Digital Health and MedTech,
Education technology, E-commerce and Gaming have
been performing better since the onset of Covid-19.
These are mostly industries that have helped their
consumers deal with the many challenges of lockdown,
including procuring the essentials, entertaining the
household and replacing in-person schooling. They
have also benefited from either being produced and/or
supplied via the internet or being deemed essential
services during lockdown.
Figure 13

Selected sector performance since the onset of Covid-19 (a)
Source: The UK Business Angel Market survey 2020
Gaming (n=21)
14
24
62
Healthcare, Digital Health and MedTech (n=97)
14
26
60
Security and Cyber Security (n=35)
14
34
51
Digital Media and Content (n=52)
15
38
46
Electronics and Hardware (n=37)
16
70
14
E-commerce (n=59)
17
22
61
Mobile and Telecoms (n=28)
18
46
36
Education technology (n=42)
21
17
62
Energy, Environment and Clean Tech (n=60)
25
45
30
Advertising and Publishing (n=25)
60
28
12
Fashion and Design (n=22)
64
27
9
Property and Construction (n=32)
69
22
9
Film, Theatre and Entertainment (n=28)
75
21
4
Leisure, Hospitality and Tourism (n=44)
93
7
Bio Tech, Life Sciences and Pharma (n=89)
11
37
52
(a) Sample sizes are small for some sectors, results should be treated with caution
Worse than pre-Covid-19
No change
Better than pre-Covid-19
Percentage of angels reporting:
1. Investing in the time of Covid
The UK Business Angel Market 2020
British Business Bank
british-business-bank.co.uk
15
Investment performance by location is
highly polarised
Sample sizes are very small for many locations meaning
these findings need to be treated with caution, but
some of the angel and indeed equity investment
hotspots in the UK such as London and the South East
are in the top half of worst performing locations since
the onset of Covid-19 (figure 14). Scotland, Oxford and
Cambridge appear to be holding up somewhat better
alongside some locations with much smaller angel
activity in general.
There are several potential reasons for these
outcomes. For London specifically, it could be that
it was first, and hardest hit by Covid-19. For some
locations it could be they have a greater share of
badly hit sectors, such as theatres and tourism,
compared to some of the locations viewed as
performing better. It could alternatively be a more
positive story of industries performing well being
situated in these better performing regions such as
Life Sciences in Cambridge or Oxford. However,
it could also be due to the very low sample sizes for
many locations.
Figure 14

Location performance since the onset of Covid-19 (a)
Source: The UK Business Angel Market survey 2020
Northern Ireland (n=10)
10
80
10
Yorkshire and Humberside (n=19)
21
63
16
Cambridge (n=26)
23
58
19
North East (n=17)
24
53
24
Oxford (n=23)
26
57
17
Scotland (n=45)
27
49
24
West Midlands (n=32)
31
50
19
East Midlands (n=18)
33
39
28
Wales (n=27)
33
52
15
South East (excl. Oxford) (n=53)
34
40
26
North West (n=22)
36
41
23
Outside the UK (n=44)
43
25
32
Greater London (n=120)
44
32
24
East of England (excl. Cambridge) (n=22)
45
41
14
South West (n=35)
46
31
23
(a) Sample sizes are small for some sectors, results should be treated with caution
Worse than pre-Covid-19
No change
Better than pre-Covid-19
Percentage of angels reporting:
1. Investing in the time of Covid
The UK Business Angel Market 2020
British Business Bank
british-business-bank.co.uk
16
1.4. Exits
Exits have been rare, but mostly positive
Only a minority (13) of angel respondents have had an
exit since the end of the last tax year (figure 15). This
exit rate compares with a quarter of our angels who
had at least one exit in 2019/20. Positively though, one
in five are anticipating an exit during the rest of 2020/21
which would bring the exit rate close to the previous
year though understandably there is much more
uncertainty currently.
Of those few who have experienced an exit (13), just
over three quarters experienced mostly or all positive
outcomes (figure 16). This is certainly higher than last
year, but as noted a small sample. We also asked what
their expected outcomes were for the remainder of the
year and this is much more in line with 2019/20.
1.5. Government schemes
Angels generally have a good level of
awareness of Covid-19 support measures
In our original survey we asked about the use of EIS and
SEIS. The government scheme landscape is somewhat
more varied now following a raft of interventions
unveiled to support businesses as a result of Covid-19.
As one would expect, given the experience and
expertise of the average angel investor, respondents
generally had a good level of awareness of Covid-19
support measures (figure 17). Only 3% reported knowing
about none of the measures.
Usage of these schemes is somewhat more varied.
For some of the schemes this will be the case of a
portfolio business not needing to access the schemes
while for others many businesses will not qualify.
The same three schemes top both awareness and
usage, the Coronavirus Job Retention scheme, the
Bounce Back Loans Scheme and Deferring of VAT/
income tax scheme (figure 18).
Figure 15

Proportion of angels who reported realised and expected exits
Source: The UK Business Angel Market survey 2020 (n=265)
Don't know/prefer not to say
No
Yes
Expected during rest of current tax year (2020/21)
Since last tax year (6th April 2020 - July 2020)
During last tax year (2019/20)
19
72
93
61
26
5
20
2
2
Figure 16

Proportion of angels who reported outcomes of realised and expected exits
Source: The UK Business Angel Market survey 2020
Don't know/prefer not to say
All negative
More negative than positive
Equal positive and negative
More positive than negative
All positive
Expected during rest of current tax year (2020/21) (n=54)
Since last tax year (6th April 2020 - July 2020) (n=13)
During last tax year (2019/20) (n=68)
9
1
15
13
7
7
8
9
9
35
23
13
54
32
31
31
Percentages may not total 100 due to rounding
1. Investing in the time of Covid
The UK Business Angel Market 2020
British Business Bank
british-business-bank.co.uk
17
Figure 17

Awareness of Covid-19 schemes
Source: The UK Business Angel Market survey 2020 (n=265)
Grants/Loans via Innovate UK Continuity Scheme,
Fast Start Scheme, Sustainable Innovation Fund
0
20
40
60
80
100
Percentage of angels
None of these
3
LEPS/Devolved Government Grants
37
Statutory Sick Pay Relief Package
42
58
HMRC Time to Pay Scheme
62
Coronavirus Self-Employment Income Support Scheme
65
Future Fund
74
Coronavirus Business Interruption Loan
75
Deferring of VAT/Income Tax Payments
80
Bounce Back Loan Scheme
81
Coronavirus Jobs Retention Scheme
88
Figure 18

Usage of Covid-19 schemes
Source: The UK Business Angel Market survey 2020 (n=256)
Grants/Loans via Innovate UK Continuity Scheme,
Fast Start Scheme, Sustainable Innovation Fund
0
10
20
30
40
50
60
Percentage of angels
Don't Know/Prefer not to say
19
None of these
11
LEPS/Devolved Government Grants
14
Statutory Sick Pay Relief Package
4
24
HMRC Time to Pay Scheme
22
Coronavirus Self-Employment Income Support Scheme
4
Future Fund
23
Coronavirus Business Interruption Loan
19
Deferring of VAT/Income Tax Payments
44
Bounce Back Loan Scheme
40
Coronavirus Jobs Retention Scheme
52
1. Investing in the time of Covid
The UK Business Angel Market 2020
British Business Bank
british-business-bank.co.uk
18
1.6. Challenges and outlook for angel investing
Economic uncertainty is the biggest challenge
which our angels foresee
Economic uncertainty is the biggest challenge which
our angels foresee, followed by Covid-19. Given the
unprecedented challenges the UK economy has faced
in the last few years this is hardly surprising (figure 19).
Some respondents suggested this could lead to
cautious investment choices by angels and a general
reduction in investment while there continues to be
economic uncertainty. Reflecting this outlook, the
average anticipated allocation of investable assets to
angel investing for 2020/21 is slightly lower at 13% vs.
the 17% allocated in 2019/20 by our respondents.
Despite the uncertainty, most angels surveyed are
generally confident about the future growth in value of
their portfolio. 72% stated they were either somewhat
confident or very confident of revenue growth over the
next 12 months. Perhaps even more encouragingly,
close to half of angels are open to building their
portfolio in the current climate/rest of 2020/21, while
only 12% said they intended to make no further
investments and a further 6% expected to seek exit
opportunities (figure 20).
Figure 19

The biggest challenges to investing
Source: The UK Business Angel Market survey 2020 (n=265)
0
10
20
30
40
50
Percentage of angels
Impact of COVID-19
Lack of liquidity/exit opportunities
Selecting/finding the right opportunities
EIS/SEIS challenges/removal
Brexit
Valuations of opportunities/deals
Raising/securing funds/funding gap
Tax uncertainty/Changes to taxation rules
Quality/availability of talent
Political uncertainty
Lack of resources/time to deal with
high number of investments
Not enough propositions with high growth potential
Lack of co-investors
Not enough scale-up/next stage growth
finance available for my portfolio
Economic uncertainty
45
32
26
26
23
22
19
17
14
12
11
11
10
9
8

Figure 20
Main investment intention for rest of 2020/21
Source: The UK Business Angel Market survey 2020 (n=265)
Don't Know
Seek exit opportunities for my portfolio
No further new investments
Only make follow-on investments
in my existing portfolio
Make new investments to build my portfolio
46
21
12
6
6
4
4
Other
Combination e.g. new/follow-on/exits
0
10
20
30
40
50
Percentage of angels
Investments
2017-2019
Chapter 2.
The annual average number of investments by our
respondents increased yearly
Average initial and follow-on investment sizes appear to
have increased
Most angels saw their investments perform the same or
better vs. the previous year
Software as a Service, and Healthcare/Digital Health/
MedTech attracted the most angel investors
Angels most commonly invest due to the quality of the
entrepreneurial team
2. Investments 2017-2019
British Business Bank
The UK Business Angel Market 2020
20
british-business-bank.co.uk
2. Investments
2017-2019
2.1. Volume of investments
The annual average number of investments by
our respondents increased yearly
In 2018/19, the mean number of new investments our
sample of angels made was 3.8 while the mean number
of investments ever held was 17.1. This mean number of
new investments has gradually increased over the three
years of data we collected (figure 21). The median
number of new investments has remained at 2 during
this same period.
The split of angel investors in each bucket has remained
almost unchanged except for those making zero
investments and those making 6-10. The percentage
making zero investments has decreased each year and
now stands at 15% while those making 6-10 has increased
to 12%. In total our 415 respondents who gave exact deal
numbers made over 1500 investments in 2018/19.
This section looks at the volume and
value of investments made by our
respondents during the tax years 2016/17
to 2018/19, the sectors they have
invested in and the performance of
those investments.
2.2. Value of investments
Average initial and follow-on investment sizes
appear to have increased
The majority of our angels matched (39%) or increased
(37%) the value of their investments in 2018/19 vs.
the previous tax year and only 23% reported investing
lower amounts. For initial investments, despite two
thirds of investments being between £10,000 and
£99,999 the mean size was £108k, driven by several
high value investments (figure 22). Unsurprisingly the
median size was significantly lower at £45k. In our
previous report, these stood at £80k and £25k
respectively (tax year 2016/17). Follow-on investment
values averaged £77k with a median of £25k. As with
initial investments, the mean was an increase on
2016/17 (24%) but the median was unchanged.
The increase in mean investment values taken at face
value and when combined with the increasing number
of investments our respondents are making, would
suggest a very positive story. However, whereas the
investment volumes data we have compared are all
from our 2019 survey and thus the same sample, the
investment values are not with the 2016/17 values
coming from our previous report. As such the increase
in investment values shown above could be in part due
to the change in profile of the respondents in our
survey compared to the 2018 report which is discussed
in chapter 3 - Our Angel Population.

Figure 21
Investments made during tax years 2016/17 to
2018/19 (a)
Source: The UK Business Angel Market survey 2019 (n=415)
(a) Excludes respondents who either didn’t know or preferred not to say
how many investments they had made
2018/19
3.8
2
1
15%
67%
12%
3%
1%
2%
2017/18
3.5
2
1
16%
67%
11%
4%
1%
1%
2016/17
3.2
2
1
20%
66%
9%
4%
1%
1%
Median
Mode
0
1-5
6-10
11-15
16-20
21+
Mean

Figure 22
Proportion of investments in 2018/19 tax year,
by value (a)
Source: The UK Business Angel Market survey 2019
(a) Excludes respondents who either didn't know or preferred
not to say the value of investments they had made
0
5
10
15
20 25 30
40
35
Per cent
£1,000 to £9,999
£10,000 to £29,999
£30,000 to £49,000
£50,000 to £99,999
£100,000 to £199,999
£200,000 to £499,999
£500,000+
£0 to <£1,000
Initial Investment (n=325)
Follow-on Investment (n=248)
2. Investments 2017-2019
British Business Bank
The UK Business Angel Market 2020
21
british-business-bank.co.uk
2.3. Performance and exits
Most angels saw their investments perform the
same or better vs. the previous year
Against a backdrop of heightened political and
economic uncertainty during 2018 and 2019, two in five
angels surveyed said their investments were meeting or
exceeding their expectations in terms of business/
financial performance while only one in five said they
were underperforming (figure 23). In 2018/19 more
angels saw their investments perform the same (52%)
or better (20%) than in 2017/18 with only 9% seeing
them perform worse (figure 24). Things are more
polarised when 2018/19 is compared to 2016/17, while
an increased number of angels saw their portfolio
performing better than expectations (27%), an
increased number also saw their portfolio performing
worse (13%).
The majority of angels saw positive growth performance
across both turnover (78%) and employment (76%)
within the businesses in their existing portfolios in
2018/19. Two in five witnessed significant growth of
20%+ for both metrics. Only 8% had seen decreases in
turnover and 6% have seen decreases in employment
(figure 25).

Figure 23
Performance of current portfolio against
expectations (a)
Source: The UK Business Angel Market survey 2019 (n=500)
Percentage of angels
who reported:
(a) Excludes respondents who either didn't know or
preferred not to say
Too early to say
Exceeding expectations
Meeting expectations
Underperforming
against expectations
36
9
34
21
Figure 24

Historical performance comparisons (a)
Source: The UK Business Angel Market survey 2019 (n=304)
(a) Excludes respondents who preferred not to say
Don't know
Worse
The same
Better
2018/19 vs 2016/17
2018/19 vs. 2017/18
19
21
13
9
52
39
27
20
Figure 25

Turnover and employment growth in current portfolio, 2018/19 (a)
Source: The UK Business Angel Market survey 2019
Employment (n=289)
Turnover (n=303)
8
14
18
6
14
23
41
24
39
13
Percentage of angels reporting:
Negative growth
No growth
Low growth of up to 5%
Modest growth of 5% to 20%
Significant growth of more than 20%
(a) Excludes respondents who preferred not to say
2. Investments 2017-2019
British Business Bank
The UK Business Angel Market 2020
22
british-business-bank.co.uk
Most of our respondents did not experience an exit
during the 2018/19 tax year (70%). Of those who
reported an exit, 70% had at least one positive exit and
59% had at least one negative exit (eg a write off).
Whilst only 28% of angels experienced an exit in
2018/19, two in five anticipated an exit in the next
12 months.
There was considerable variation in the rate of return
from exits in 2018/19 (figure 26). 44% of exits were
reported as breaking even or losing money while 35%
made positive returns with 3% (10 deals) being
reported as returning more than 20x the investment.
Unsurprisingly given the stage of investment, trade
sales and business liquidation remain the main exit
routes, accounting for 59% of exits. 10% of exits were
secondary sales to equity investors such as another
angel or a VC/private equity (‘PE’) house (figure 27).
Figure 26

Figure 26: Investment exit multiples, 2018/19
Source: The UK Business Angel Market survey 2019 (n=300)
10
20
30
0
Percentage of exits
<1 x investment
1 x investment
2 x investment
3-5 x investment
6-10 x investment
11-15 x investment
16-20 x investment
21+ x investment
Prefer not to say
Don't know
Written off
4
17
3
1
3
8
10
9
2
12
30
Figure 27

Investment exit routes, 2018/19
The UK Business Angel Market survey 2019 (n=300)
5
10
15
20
35
25
30
0
Percentage of exits
Trade sale
32
IPO
2
Secondary sale to Angel/ VC/ CVC /PE
10
Secondary Market (in-line or direct)
3
Management buy-out
2
Business went into liquidation
27
Other
6
Prefer not to say
18
Don't know
1
2. Investments 2017-2019
British Business Bank
The UK Business Angel Market 2020
23
british-business-bank.co.uk
2.4. Sectors
Software as a Service, Healthcare,
Digital Health and MedTech attracted the
most angel investors
Angels invested in a wide range of sectors across
service and manufacturing industries during 2018/19.
Software as a Service, Healthcare, Digital Health
and MedTech and Bio Tech, Life Sciences and
Pharmaceuticals all received funding from over 30%
of our sample with FinTech unsurprisingly close
behind receiving funding from just over a quarter of
our angels (figure 28).
These sectors are some of the most talked about
sectors in equity investment, not only in the UK but
worldwide. Furthermore, over half of the angels
surveyed have investments which include enabling/
deep technologies, and this is more prevalent
amongst those who invest in the top investment
sectors (figures 29 & 30).

Figure 28
Sectoral split of investments (Top 10), 2018/19
Source: The UK Business Angel Market survey 2019 (n=353)
Percentage of angels
who have invested
Healthcare, Digital Health and MedTech
Bio Tech, Life Sciences and Pharmaceuticals
Financial Technology (FinTech)
E-commerce
Digital Media and Content
Energy, Environment and Clean Tech
Manufacturing, Materials and Engineering Technologies
Security and Cyber Security
Electronics and Hardware
Software as a Service
38
34
31
26
22
21
20
18
16
15

Figure 29
Angels who have made investments which include
enabling/deep tech, 2018/19
Source: The UK Business Angel Market survey 2019 (n=350)
Yes
No
Don't know
Prefer not to say
53
37
7
2
Percentage of angels
who reported:
Percentages may not total 100 due to rounding

Figure 30
Inclusion of enabling/deep tech by angels who invest in the top 5 sectors, 2018/19
Source: The UK Business Angel Market survey 2019
0
20
40
80
60
Percentage of angels who have
invested in each sector
69
67
64
60
59
Software as a Service (n=132)
Financial Technology ('fintech') (n=92)
E-commerce (n=77)
Bio Tech, Life Sciences & Pharmaceuticals (n=108)
Healthcare, Digital Health & MedTech (n=119)
2. Investments 2017-2019
British Business Bank
The UK Business Angel Market 2020
24
british-business-bank.co.uk
2.5. Decision making
Angels most commonly invest due to the
quality of the entrepreneurial team
The number one factor when angels are deciding
whether to invest in a company remains the quality of
the entrepreneurial team and their skills and
experience in particular. 91% of our respondents said
this was very important while a further 6% said this was
quite important (figure 31).
Over half of angels also place importance on the
potential impact, be it societal, environmental or local,
of their investments when seeking opportunities, but
only one in five put an emphasis on the gender mix of
the entrepreneurial team. This latter finding appears to
be quite impactful as angel investments are dominated
by male-founded teams and there is a well-
documented correlation between gender of angels and
the gender profile of the founders in which they invest.
Even for those angels who reported investing in female
or mixed founder teams, over half cited a very limited
to no quality deal flow from female founders, with a
lack of female founders in their investment sector being
cited as the main driver for this. This is despite the fact
that for investments that have female founders or
mixed teams, there is generally a broad coverage
across different sectors, with Software as a Service
and Healthcare/Digital Health/MedTech investment
slightly more common.
Performance doesn’t appear to be the barrier to
investing in female or mixed founder teams. Seven in
ten angels reported female or mixed founded teams
are performing at least the same or better than their
all male founded team investments.
Figure 31

Importance of factors influencing investments
Source: The UK Business Angel Market survey 2019 (n=508)
Percentage of angels who reported:
Not at all important
Don't know/prefer not to say
Not really important
Neither
Quite important
Very important
The gender mix of the entrepreneurial team
The potential impact of the investment e.g. societal, environmental, impact on local economy
The entrepreneurial team has the relevant skills and experience
8
1
1
36
14
19
24
21
1 1 1
6
91
37
19
15
5
There was an increase in the percentage of female
respondents but it remains low
The number of ethnic minority respondents has increased
but they remain underrepresented
The average age of our respondents has increased
The majority of angels bring a significant amount of
experience to their investments
Our angel
population –
2019 survey
Chapter 3.
3. Our angel population – 2019 survey
British Business Bank
The UK Business Angel Market 2020
26
british-business-bank.co.uk
3. Our angel
population –
2019 survey
Previous studies of the UK angel
population have flagged up a lack of
diversity as they have across many
finance markets. The demographic profile
of the angel investors who completed our
survey is largely consistent with previous
studies - predominately male and White
with an average of 55 years old.
3.1. Gender
There was an increase in the percentage of
female respondents but it remains low
86% of our respondents were male. However, even
though only 13% of respondents were female, this is an
improvement on the 9% recorded in our survey in 2017
and more in line with the 14% who responded to the
‘A Nation of Angels’ survey in 2014. In our previous
report we noted that the lower number of female angel
respondents may have been impacted by ‘The Barriers
and Opportunities for Women Angel Investing in
Europe’ survey run prior to the 2017 survey.
As such this rebound could simply be a quirk in the
data last time rather than a genuine change in the
gender balance of angel investors. However, over half
(53%) of our respondents stated they are seeing an
increase in the number of female investors in their
network over the last three years, with four in ten either
always or frequently co-investing with female angels,
either in a syndicate or via a mixed investor group
(figures 32 & 33).
Figure 33

Frequency of co-investing with women investors in a syndicate or mixed investor group
Source: The UK Business Angel Market survey 2019 (n=139)
Always
Frequently
Occasionally
Never
Don't know
Prefer not to say
11
28
41
11
6
4
Percentage of angels
Percentages may not total 100 due to rounding
Figure 32
Change in the number of women in syndicates or groups over the past three years
Source: The UK Business Angel Market survey 2019 (n=128)
2
Decreased
9
Don't know
35
Stayed the same
53
Increased
0
10
20
30
40
50
60
Percentage of angels
3. Our angel population – 2019 survey
British Business Bank
The UK Business Angel Market 2020
27
british-business-bank.co.uk
By comparison, the Center for Venture Research at
the University of New Hampshire reported that in 2018,
female angels represented 29.5% of the USA angel
market, a significant increase from 2017 (19.5%) but in
line with 2016 (26.2%).8 The American Angel study
finds that females comprised 22% of angels in 2017.
The report also noted the number of females entering
the angel investment market appears to be growing.
Of angels who started investing within the last two
years, 30% of these were female.9
For Europe, in 2017 The Barriers and Opportunities
for Women Angel Investing in Europe survey stated
previous surveys had found female angels formed
10% of the Belgium angel population, 23% for Italy,
9% for Spain, 5% for France, and less than 5% for
Portugal. However, the Italian estimate has since been
revised down to 11.5%.10 The European Commission
commissioned Understanding the Nature and Impact
of the business angels in Funding Research and
Innovation survey, also in 2017, recorded an 11%
average for Europe as a whole. This more or less held
throughout all regions surveyed, except for Central
and Eastern Europe where a much larger share of
business angels were female (29%).11
The above statistics suggest that while the UK is ahead
of most of Europe with regards the percentage of
female angels, it is some way behind the US. However
the volatility in the UK, Italian and US numbers shows
that, as with estimating the angel market, it is difficult to
put a precise and consistent figure on the percentage
of angel investors that are female and some differences
may be due to the design and reach of the various
surveys.
For example, for some syndicates and networks, only a
lead angel has responded to the latest survey and has
not passed it on to others within their group to avoid
duplication of deal data. Lead angels are likely to be
some of the more experienced angels in a group and
thus older. Our survey suggests that currently this
typically means a male.
In an attempt to address this, we asked whether those
who invest via syndicates, networks or groups, did so
alongside female angels and if so, how many (figures 34
and 35). Whilst 40% said they did, 50% said they don’t
know, 5% said they preferred not to answer and 6%
said no. The mean size recorded for angel syndicates,
networks or groups was 107 with 19 of those being
female. This would put female angel participation in
these groups at 18%, above our survey response rates,
though the median results were lower at 10%.
One non survey-based evidence source available to us
is a gender breakdown of the EIS and SEIS data
produced by HMRC. This data is not typically
published and while their research is not yet
completed, they have kindly shared their initial findings.
The initial analysis used a sample of EIS and SEIS
investors using the latest data.
Utilising a sample size of 4,000 out of a total population
of 34,000 EIS investors, the results found that 83%
were male and 17% female, in line with our upper
bound survey result of 18%.12 For SEIS investors the
sample size was 900 out of a population of 8,000 with
a split 85% male and 15% female investors, more in line
with our survey response split.13 Our survey found a
very similar split of female (88%) and male (86%) of
angels utilised one of both of EIS and SEIS during the
last tax year so we have no reason to think there would
be a gender bias within the HMRC numbers.14

Figure 35
Size of syndicates, networks or groups and number
of female angels
Source: The UK Business Angel Market survey 2019
Female
(n=179)
19
5
Overall
(n=246)
Number of angels in syndicate/
network/group
107
50
Median
Mean

Figure 34
Percentage of angels who have female angels
in their syndicate, network or group
Source: The UK Business Angel Market survey 2019 (n=396)
Yes
No
Don't know
Prefer not to say
40
6
50
5
Percentage of angels
who reported:
Percentages may not total 100 due to rounding
3. Our angel population – 2019 survey
British Business Bank
The UK Business Angel Market 2020
28
british-business-bank.co.uk
3.2. Ethnicity
The number of ethnic minority respondents has
increased but they remain underrepresented
Due to this small sample sizes for nearly all ethnicities,
this report is restricted to groupings such as ‘Asian’,
‘Black’ and ‘White’ while discussing the ethnicity
breakdown of our survey respondents. We recognise
the imperfect nature of such high-level categorisations.
As with female respondents, the number of ethnic
minority respondents has increased in our latest
survey. 10% of all respondents identified as being
Mixed, Arab, Asian or Black, compared to 7% in 2017.
However, despite a growing number of Black angel
investment syndicates, many operating specifically to
invest in Black founders, and the presence of a number
of Asian investors within existing angel groups and
syndicates, Black and Asian investors remain
underrepresented in the UK angel market.
According to the 2011 Census 86% of the English and
Welsh population over the age of 16 is White. Within
our survey population 86% also identified as White.
However, the split between White British and Other
White was quite different in our survey to the census
data with the former underrepresented and the latter
significantly overrepresented (figure 36).
As with the gender split, it is possible the fact that only
a lead angel has responded to the latest survey and
not passed it on to others within their group has
impacted our sample while a further potential reason
for the lower number of ethnic minority angels could
be cultural.
However, the previously mentioned Diversity VC and
OneTech survey of 223 venture capitalists suggests
that the London VC community also disproportionately
comprises of White individuals when compared to the
London population. In contrast, Black venture
capitalists appear to be significantly underrepresented,
alongside Asian venture capitalists. Given many angels
start out in venture capital before transitioning to angel
investing this could suggest our survey is
representative.
By comparison, in the US, estimates of ethnic
minorities accounted for between 5.3% and 12.4% of
the angel population. The lower bound is well below
our survey sample whilst the upper figure is just above.
However, given minorities form a greater percentage of
the US population (23.5%) this upper bound still
suggests the US angel population is less representative.
African-American investors encompass only 1.3%
of The American Angel sample whereas African-
Americans make up 13.3% of the US population.15
As with the UK, Asian investors are better represented
(5.7% of the survey), identical to the US Asian
population of 5.7%.
Figure 36

Ethnicity of angel survey vs England and Wales working age population
Per cent
White British
70.5
79.2
15.7
6.4
2.0
6.3
8.1
0.6
3.4
1.6
1.1
3.3
0
1.8
All other white
Mixed
Asian
Black
Other
Prefer not to say
0
10
20
30
40
50
60
70
80
90
Survey population (2019) (n=508)
England and Wales working age population (2011 census)
Sources: The UK Business Angel Market survey 2019, ONS 2011 Census
3. Our angel population – 2019 survey
British Business Bank
The UK Business Angel Market 2020
29
british-business-bank.co.uk
3.3. Age
The average age of our respondents
has increased
The age profile of our respondents has shifted
somewhat since the last survey. Just under two thirds
(64%) of our respondents were between the ages of
45 and 64 and the average age was 55 for the
complete set of respondents. In the 2017 survey, only
54% were between the ages of 45 and 64 while the
average age was 52 (figure 37).
In addition, the data showed 14% of angels were
between 18-44 and only 4% were in the 18-34 age
range. This is significantly below the 2017 survey which
reported 25% of respondents were between 18-44
with 9% between 18-34. In turn the 2017 findings were
significantly different to The Angel Nation findings in
2014 which recorded 44% of angels as under 44.
There are several probable reasons for the shift in the
age demographic relating directly to the contact
strategy used for the recent survey. Firstly, our two
surveys were done two years apart with The Nation of
Angels survey three years prior and many of the same
angels will have responded. Secondly, for some
syndicates and networks, only a lead angel has
responded to the latest survey and has not passed it
on to others within their group to avoid duplication of
deal data. Lead angels are likely to be some of the more
experienced angels in a group and thus older.
Thirdly and possibly the biggest contact strategy
reason for the seemingly missing large group of cherubs
(angels between the age of 18-34), is that in the 2019
survey we tightened our definition of angel investors
and did not include those who exclusively invested as
an individual on online investment platforms or
crowdfunding sites. This group accounted for a number
of younger respondents in our previous survey.
Despite these potential survey challenges, the UK
appears to be typical. For Europe, the EBAN report also
returned an average angel age of 55. This pattern again
holds throughout all regions surveyed, except for
Central and Eastern Europe where business angels
were on average younger at around 43 years of age.
In The American Angel study in 2017 the mean age of
all US investors was 57.6 years old. The majority of
investors were between the ages of 50 to 66 years old
with almost 70% of investors 50 years of age or older.
Figure 37

Angel age range
Source: The UK Business Angel Market survey 2019 (n=508)
4
10
29
35
21
Per cent
18-34
35-44
45-54
55-64
65+
Age
Percentages may not total 100 due to rounding
3. Our angel population – 2019 survey
British Business Bank
The UK Business Angel Market 2020
30
british-business-bank.co.uk
3.4. Experience
The majority of angels bring a significant
amount of experience to their investments
Angels bring a relatively high level of experience to the
companies they support as well as a significant amount
of their investable assets. In line with our previous
report, 55% of our respondents had been investing as
angels for between two and ten years while a further
29% were even more experienced (figure 38). At the
newer end of the spectrum, a further 15% had less than
two years of experience with 3% having less than six
months. Our angels’ mean allocation of investable
assets was 16%, slightly below the previous survey
(19%), while 15% reported allocating 26% or more
(figure 39).
The American Angel sample used slightly different
experience brackets but despite this the results appear
to be somewhat similar. A quarter of the investors were
relatively new to angel investing, defined as investing
for less than 3 years, while 20% had been investing for
18 or more years.
3.5. 2020 Survey
While we endeavored to have the original survey
participants respond to our follow on survey we also
wanted it to be open to new respondents. This
approach resulted in 102 returning participants and 163
who were new to the data set resulting in a population
with a few demographic differences (figure 40).

Figure 40
Demographic comparisons vs. 2019 survey
Figure 38
Angel experience
Source: The UK Business Angel Market survey 2019 (n=508)
Less than 2 years
2 to less than 5 years
5 to less than 10 years
10 - 15 years
16+ years
15
31
24
14
15
Per cent
Percentages may not total 100 due to rounding
Figure 39
Proportion of investable assets allocated to angel investing
Source: The UK Business Angel Market survey 2019 (n=508)
25
33
20
9
4
2
2
5
Prefer not to say
Mean = 16
Don't know
More than 75%
51% - 75%
26% - 50%
11% - 25%
5% - 10%
Less than 5%
0
5
10
15
20
25
30
35
Percentage of angels
Gender
Significantly higher percentage of male angels vs. 2019
Age
Slight increase in average age vs. 2019
Ethnicity
Comparable vs. 2019
Experience
Average years of experience as a business angel is
slightly higher vs. 2019
Geographic
spread
of angels
Chapter 4.
Angels are key to regional and local ecosystems
The geographic spread of angels is uneven
4. Geographic spread of angels
British Business Bank
The UK Business Angel Market 2020
32
british-business-bank.co.uk
4. Geographic
spread of angels
One important piece of the diversity
equation we have not touched on yet
is the geographic spread and investing
habits of angel investors. This is
important because access to finance
products and providers is inconsistent
across the UK with uneven regional
and local distribution.
As highlighted in our The Benefits of Diverse Smaller
Business Finance Markets report, for seemingly near-
identical companies, where they are based has a
significant impact on the type of finance and the
finance providers they access.16 Bank lending broadly
matches the business population in most English
regions, but other products, such as equity and
including VC deals, are often concentrated in London
and the South East. Even within debt products regional
data can disguise local disparities.

Angels are key to regional and local ecosytems
As we noted in our Small Business Finance Markets
report 2020, equity investors provide funds but also
help connect firms with talent, whether at staff or
board level, and with potential corporate customers.17
This linking effect of equity investors is apparent in
many of the Bank’s equity programmes. For example,
the Northern Powerhouse Investment Fund early
assessment sets out a case study where a fund
manager found a technical expert to act as a Non-
Executive Director for their investee firm.18
In addition to equity investors linking their portfolio
firms to others, links from prospective portfolio firms to
investors are important. Around two fifths of
pitchdecks that reach VC firms come from a pre-
existing relationship, but these warm leads eventually
account for over four fifths of investments.19 One
specific inward link that appears important is having a
director or engaged advisor with previous experience
of raising equity finance. Firms in this position are
significantly more likely to obtain equity finance than
their peers.20
Equity investors, such as angels, plan for eventual exits
from their investments through initial public offerings,
trade sales and secondary sales. Exits are a key
process in entrepreneurial ecosystems as they drive
investor returns and provide liquidity to limited
partners, freeing up capital for future investments with
77% of our respondents reporting they continue to
reinvest some or all of their gains in further angel
investments and only 6% do not. Exits also create
wealth for company founders, enabling them to found
new ventures, invest in other firms or share their
expertise and, as such, can create future angels to help
the next generation of entrepreneurs in the region.
This process is often called entrepreneurial recycling
and will play a role in the substantial variation in the
presence of equity investors we see in the UK.21, 22
For those businesses that receive angel investment,
it can be their first formal equity investment given
where angels sit in the equity landscape set out earlier.
Without an angel investor many will not make it to the
next step so for entrepreneurial recycling to happen,
angel investors can be the seed from which a local or
regional equity ecosystem can grow.
The geogrpahic spread of angel investors
is uneven
The standard line is London is significantly better
stocked than the rest of the UK for both VC and angel
investors and our survey results corroborate this.
London and the South East remain the most prominent
home locations with 34% and 22% of angels
respectively and thus just over half of all UK angels in
our 2019 survey, this is almost exactly the same as our
previous survey.
As a comparison, at the opposite end of the scale for
England, the North East, North West and East Midlands
each recorded 2% of our respondents. Lower still,
Wales and Northern Ireland only had 1% each of angels
completing our survey and, when Scotland is included,
the devolved nations only account for 8% of our angel
population.
If you split the data by gender and ethnicity, there is
even more of a disparity in the geographic split with
52% of female angels and 58% of ethnic minority angels
in our survey based in London. Research has identified
that investors often invest in people like themselves and
this survey has also identified the importance of female
investors for female entrepreneurs’ chances of receiving
equity finance. As such, this geographic disparity could
be having a considerable impact on those businesses
outside of London run by female or ethnic minority
entrepreneurs and seeking equity finance.23
4. Geographic spread of angels
British Business Bank
The UK Business Angel Market 2020
33
british-business-bank.co.uk
Turning to where angels invest, 55% of our angel
population that made an investment in 2018/19 made
at least one in London, more than double the South
East which came second on the list. 16% made at least
one investment in the devolved nations.
In terms of deal numbers, again London is the clear
leader accounting for 44% of all deals, four times the
number second placed Scotland received. The South
East was third in the list with 9% of the deals reported
in 2018/19. Five regions or nations received only 1% of
the deal flow.
Using the approximated mean value of investments in
each location to create a total value of angel
investments, in value terms, London’s share is even
greater in our survey. London received just over 50% of
angel investment by this measure. Scotland is again
second with 11% but the South East falls away to 5%
due to a low mean investment value. Third place on the
list goes to investments made overseas with 10%.
This is despite receiving only 6% of angel investments
in 2018/19 and is driven by a mean investment value
nearly double the UK average.
A criticism of our previous survey, and other surveys,
is that it failed to reach angels based outside of London
and the South East and as such overstated the
geographic disparities. For this report we utilised our
Regional Angels Programme contacts and the support
of the UKBAA to reach more angels in the UK regions
and devolved nations.
Finally, to test how representative our sample was, we
worked with HMRC to produce a dataset of the home
location of investors utilising the EIS and SEIS schemes
for comparison.24
London hosts the largest share of investors using the
EIS and SEIS schemes. 38% of those whose location is
known resided in the capital in 2018/19. It is also the
most prominent region for EIS and SEIS activity with
firms in the capital securing an even higher percentage
of investment (49%). Conversely, outside of London
most of the remaining locations had larger shares of EIS
and SEIS investors than of EIS and SEIS funding in
2018/19.
Comparing our survey results and the EIS and SEIS
statistics, it would suggest our sample is relatively
representative assuming there is no bias in the usage of
EIS and SEIS by region (figure 41). One route to gauge
potential bias is via awareness. As with the overall
equity market, awareness is likely to be a factor in
London’s leading share of EIS and SEIS activity. 41% of
London SMEs are aware of business angels as a form of
finance. This is the highest in the UK with firms in the
South East close behind (37%). Despite this, the fact
the two datasets largely agree would suggest our
survey has reasonably captured the geographic
diversity of the UK angel market and in this sense at
least is an improvement on our last survey.
This uneven spread of angels across the UK is why the
Regional Angels Programme was established with the
aim of helping reduce regional imbalances in access to
early stage equity finance for smaller businesses
across the UK.25
Figure 41
Source: The UK Business Angel Market survey 2019 and HMG EIS/SEIS data
34.4
38.4
Greater London
South East
22.2
21.4
South West
8.5
7.3
East of England
6.9
10.0
Scotland
5.5
4.7
West Midlands
4.3
3.7
Yorkshire and Humberside
3.3
2.9
North West
2.4
4.9
North East
1.8
0.9
East Midlands
1.8
3.2
Wales
1.4
1.2
Northern Ireland
1.2
0.7
Other
6.3
0.5
0
5
Percentage of angels
10
15
20
25
35
40
30
Investor home location
Survey (2019) (n=508)
EIS/SEIS 2018/19 (a)
(a) provisional data
The impacts
of angel
diversity
Chapter 5.
Average age and experience varied considerably
depending on gender or ethnicity
Investable assets allocated to angel investing typically
increases with experience
Why angels invested was consistent across nearly all
demographics
5. The impacts of angel diversity
British Business Bank
The UK Business Angel Market 2020
35
british-business-bank.co.uk
5. The impacts of
angel diversity
From our 2019 angel population we can
see the angels who responded to the
survey were predominately male and
White, with an average age of 55. They
have been investing for eight years,
invested in four businesses in the last tax
year, have invested in 17 businesses in
total and typically invest around 16% of
their investable assets. However, we can
break the survey population down by a
range of demographics and this shows
variations by group. It should be noted
that due to small sample sizes for some
demographics these should be
considered indicative findings rather
than statistically significant.
Due to these small sample sizes for nearly all
ethnicities, this report is restricted to groupings such as
‘Asian’, ‘Black’ and ‘White’ while discussing the ethnicity
breakdown of our survey respondents. For us to be
able to create comparable statistics for this section we
have had to further group Mixed, Arab, Asian and Black
investors to create an ‘ethnic minorities (excluding
white minorities) ’ grouping (53), in line with government
guidance and referred to as ‘ethnic minorities’ for the
rest of the chapter.26 White British and Other White
have been combined to create a singular ‘White’
grouping. We recognise the imperfect nature of such
high-level and overarching multi-ethnic groupings.
5.1. Age and experience
Average age and experience varied significantly
depending on gender or ethnicity
Firstly, the average age of an angel varied significantly
depending on the chosen demographic. The average
female was 49 while the average male was 56. The
average ethnic minority angel was only 47 years of age
but the average White angel was 56.
The difference in experience between the female and
male respondents in our survey was stark but
unsurprising given the age profiles of the two genders.
The average female business angel had been investing
for only 4.7 years whereas the average male business
angel had been investing for 8.9 years. The majority of
our male sample (58%) had been investing for more
than 5 years but this fell to 28% for our female
respondents.
The gap was slightly narrower between ethnic minority
investors (5.6 years) and White investors (8.7 years).
This latter point is particularly interesting given ethnic
minority investors in our survey were on average
younger than female angels suggesting our ethnic
minority respondents started angel investing younger
and as a result 36% of ethnic minority angels already
had more than 5 years of experience.
5.2. Impacts on volume and value of
investments
Investable assets allocated to angel investing
typically increases with experience
The experience profile is particularly important
because the proportion of investable assets allocated
to angel investing typically increases with experience.
Less experienced business angels are more likely to
allocate a significantly smaller proportion of their
investable assets compared to more experienced
angels (figure 42). In our survey, 36% of angels with less
than five years of experience invested less than 5% of
their investable assets compared to 16% of those with
over five years of experience. The average allocation
for those with less than five years of experience was
below 12% whilst for those with more than five years of
experience, it was nearly 19%. For those with 16+ years
of experience, it was 22%.

Figure 42
Average proportion of investable assets allocated to
angel investing, by experience cohorts
Source: The UK Business Angel Market survey 2019
11.9
16.3
19.3
22.5
11.3
5
10
15
20
25
0
2 to <5 years (n=149)
5 to <10 years (n=117)
10 to 15 years (n=68)
16+ years (n=71)
Per cent
Less than 2 years (n=70)
5. The impacts of angel diversity
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In line with expectations, given the experience profiles
of our female and male angels, males invested more of
their investable assets than females in our survey. The
average allocation for a male was 16.3% of their
investable assets and for a female 11.2%. While the
former is in line with the experience profile of our male
investors, this female average is the same as the
average for angels with less than two years of
experience and below the 2-5 years of experience our
average female angel reported, suggesting gender
could potentially impact the average allocation of
investable assets.
The male average of 16.3% of investable assets is in line
with the 5-10 years of experience average. However,
given the average male had been investing for just
under nine years and thus at the top end of the bracket
if experience is the key variable, one could have
expected a slightly higher average investable asset
figure. This suggests other factors may be influencing
our sample.
Looking at the average investable assets split by
ethnicity something potentially more interesting
becomes apparent. Our ethnic minority grouping
utilised on average 16.5% of their investable assets for
angel investing, above what would be expected given
their experience profile. By comparison, the average
White angel invested only 15.6% of their investable
assets despite having on average over 3 years more
experience. Looking at the gender split of ethnic
minority and White investors 70% of ethnic minority
investors were male compared to 88% of White angels
suggesting ethnicity is potentially a bigger driver of
asset allocation than gender.
Market contacts have suggested one possible reason
for this greater allocation. There is a strong drive among
some ethnic minority investors who have themselves
succeeded in business to back other ethnic minority
entrepreneurs, reflecting a desire to achieve social
impact by increasing the level of investment received
by ethnic minority founders.
Experience also appears to impact the value of
individual investments made by angels but not in a linear
way. In our sample the mean initial investment was
highest amongst those with 5-10 years of experience
whilst for follow-on investments it was highest amongst
those with over 16 years of experience (figure 43). These
findings could represent more experienced investors
choosing to have a more diversified or larger portfolio as
those with over 16 years of experience also had the
highest average number of initial investments in 2018/19.
The increased value of follow-on investments in line with
experience may reflect portfolio companies having
had longer to develop and as such may need larger
follow-on amounts.
Male business angels were more likely to have made
a higher number of investments during their time as a
business angel. On average male respondents had
made 18.5 investments compared to 8.3 for female
investors with medians of 10 and 5. 30% of male
investors had made between 1-5 investments, while
nearly half (49%) of females fell into this category.
At the opposite end of the spectrum, only 5% (3) of our
female angels have made more than 20 investments as
an angel, considerably lower than the 22% (88) of male
angels who reported this figure.
Figure 43

Mean value and volume of investments in 2018/19, by experience cohorts
Source: The UK Business Angel Market survey 2019
£
Less than 2 years
2 to <5 years
5 to <10 years
10 to 15 years
16+ years
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
0
1
2
3
4
5
6
Mean value of initial investments (LHS)
Base sizes are 38, 102, 80, 47 and 58
respectively
Mean value of follow-on investments (LHS)
Base sizes are 14, 72, 65, 49 and 48
Mean number of investments (RHS)
Base sizes are 60, 153, 116, 69 and 75
5. The impacts of angel diversity
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There was also a significant gender difference with
regards the mean initial and follow-on investment
values.27 Male initial investment values averaged £117k
while for female angels it was £50k, less than half. The
median values were closer together at £45k and £35k.
For follow-on investments, the difference in
percentage terms was even greater. Males invested on
average £82k, while females averaged £29k, with
medians of £25k and £15k, respectively. Even taking
into account the relevant experience levels, these are
considerable differences.
Any potential impact of ethnicity on the value of
investment is even less clear due to a lower sample size
again. Even when combined, only 30 ethnic minority
investors made investments in the 2018/19 tax year.
Whilst the mean initial investment (£95k) was similar to
that of White investors (£106k) this was driven by a few
very large deals in a small sample (88 investments).
The median ethnic minority deal (£30k) was much lower
and below the female median. This was despite also
making fewer investments than their White counterparts.
For follow-on funding the gap was considerable, ethnic
minority angels (18) invested on average £27k, just over
a third of the value White angels did per deal though the
median measures were much closer at £20k for ethnic
minority respondents and £25k for White respondents
(figures 44 & 45).
5.3. Decision making
Why angels invested was consistent across
nearly all demographics
No matter the demographic, the number one factor
when angels were deciding whether to invest into a
company remained the quality of the entrepreneurial
team and their skills and experience in particular. Across
our various demographic groupings between 100% and
95% of our respondents said this was important with
most saying it was very important.
Every grouping also placed importance on the potential
impact, be it societal, environmental or local, of their
investments when seeking opportunities, but there were
differences within demographics. The younger an
investor the more important this was seen to be. 71% of
our admittedly small 18-34s group (21) said it was
important while only 50% of our over 55s agreed. There
was also a difference between genders, 79% of female
angels felt it was important while only 52% of males did.
The most striking but unsurprising difference was around
the importance of the gender mix of the entrepreneurial
team. 55% of females stated gender was important
compared to only 14% of males. This appears to be quite
impactful as angel investments are dominated by male
founded teams and there is a well-documented
correlation between the gender of angels and the gender
profile of the founders they invest in. For example, the
UKBAA led report on the barriers and opportunities to
female angel investing in Europe identified that female
investors had between 20-50% of their portfolio
investment in female led teams.28
Figure 44

Mean value and volume of investments in 2018/19, by gender and ethnicity cohorts
£
Source: The UK Business Angel Market survey 2019
Male
Female
White
Ethnic minority
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
0.0
0.5
1.0
1.5
2.0
2.5
Mean value of initial investments (LHS)
Base sizes are 284, 39, 291 and 30
respectively
Mean value of follow-on investments (LHS)
Base sizes are 226, 22, 228 and 18
Mean number of investments (RHS)
Base sizes are 359, 51, 367 and 37
4.5
3.5
3.0
4.0
Figure 45

Median value and volume of investments in 2018/19, by gender and ethnicity cohorts
£
Source: The UK Business Angel Market survey 2019
Male
Female
White
Ethnic minority
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
0.0
0.5
1.0
1.5
2.0
2.5
Median value of initial investments (LHS)
Base sizes are 284, 39, 291 and 30
respectively
Median value of follow-on investments (LHS)
Base sizes are 226, 22, 228 and 18
Median number of investments (RHS)
Base sizes are 359, 51, 367 and 37
Lack of investable assets and greater risk averseness or
lack of confidence were the most common reasons given
for the limited number of female angels
Data shows the number of female-led SMEs is growing
in the UK
Half of respondents reported no specific policies to
encourage female angels
Female
angels
Chapter 6.
6. Female angels
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6. Female
Angels
As noted in both our survey and surveys
worldwide, the vast majority of angel
investors appear to be male. This is not
unique to angel investing but it does have
a potentially significant impact on female
founded businesses.
6.1. Why are there not more female angels?
Lack of investable assets and greater risk
averseness or lack of confidence were the
most common reasons given for the limited
number of female angels
As part of this survey we asked our respondents why
they thought there weren’t more female angel investors
with a wide range of answers given (figure 46). The two
most popular responses given by the 168 mostly male
angels who answered this question were females have
a lack of investable assets (25%) and are more risk
averse or lack confidence (24%).
Of the 168 respondents who agreed to complete our
follow-on phone survey, only 25 were female. For the
whole sample the most common response given was
females lack investable assets. Only 9 out of 25
females reported this was a major stumbling block for
female angels, but it was the most common response
given by males respondents (33 out of 142). The
Barriers and Opportunities for Women Angel Investing
report also asked females who were not investing what
their main concerns were about angel investing and
they too noted a lack of available money albeit this
only came joint 5th in the list.
Figure 46
Main reasons why there aren't there more female angels
Source: The UK Business Angel Market survey 2019 (n=168)
25
24
18
14
11
11
9
8
8
8
Lack of women in business/investors (lack of exits)
Lack of access to education/training
Lack of access to information and advice
Cultural issues/challenges
Lack of interest in investing
Lack of women angel role models
Lack of awareness about the investment process/skills
Gender bias/male dominated
Women more risk averse/lack confidence
Lack of investable assets/wealth/money
0
5
10
15
20
25
Per cent
6. Female angels
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This is despite a Centre for Economics and Business
Research report from 2005 finding that females owned
48% of the wealth in the UK and predicting that would
rise to 60% by 2025.29 The research also found there
were 24% more female millionaires aged 18 to 44 than
male - 47,355 compared to 37,935. Whilst these are old
numbers it is difficult to believe the trend, which had
been on an upward curve for some time, has
completely reversed.
The second most popular reason given by our
respondents was that females are more risk averse or
lack confidence. This was the most popular reason
given by female respondents (11 out of 25) and the
second most reported answer given by males (29 out
of 142). “Its too risky” was also the second most
reported response given by females who were not
investing in the Barriers and Opportunities for Women
Angel Investing report.
Our survey results on investment values showed our
female angels typically invested significantly lower
amounts than male angels which could be seen to
corroborate these two perceptions for the lack of
female angels. While it is certainly true the male
respondents on average invested more of their
investable income it was also true that our female
respondents were on average younger and a lot less
experienced, a combination that may well explain a
significant part of the differing gender investment
values.
The third most cited reason was a gender bias in a
male dominated industry at 18%. Interestingly gender
bias was a more cited reason amongst male
respondents (19%) than female respondents (16%)
though as previously mentioned, female responses to
this question were extremely limited so it is hard to
draw a firm conclusion.
Several of the other reasons given for the lack of female
angels could be summarised as females having a lack of
interest or experience in investing. One of the most
significant findings of The Barriers and Opportunities
for Women Angel Investing report which could at least
partially explain this was that over 90% of the females
interviewed, both investors and non-investors, said that
their financial advisors provided no information or
advice about angel investing or the tax breaks that
mitigate risk. Instead their advisors pointed them
toward property, stocks and shares as low risk options.
Furthermore, in the UK, angels have traditionally come
from previous roles in finance and often venture capital
or private equity. A recent report by Diversity VC and
OneTech found that only 13% of senior staff, either
partners of equivalent, were female in London VC
firms.30 This is the same percentage as recorded for
females in senior roles in UK VC firms in our UK VC &
Female Founders report and the same as our angel
survey population.
A lack of female role models and a lack of females in
business were the other reasons given in our survey.
In the US, where one estimate suggests 55% of
American angels were previously founders or CEOs
of their own start-up, the rise in female angels has
been mirrored by a rise in the number of female
entrepreneurs receiving funding.31 Unfortunately,
the UK VC & Female Founder report found that only
4% of VC deals in the UK went to all female founding
teams and only 1p in the £1. A further 12% of deals
went to mixed teams but that still means 86% go to
all male teams.
6.2. Are there any encouraging signs?
Data shows the number of female-led SMEs is
growing in the UK
While we have seen a limited number of female
founding teams receiving equity in the UK, an increase
in the number of female founders in general could
potentially have a positive impact on the number of
future female angels as seen in the US. The BEIS Small
Business Survey reported the percentage of SMEs led
by females in 2019 at 17%, up from 14% when the
survey started in 2006/07. The SME Finance Monitor
also points to an increase in the number of SMEs led by
females. 23% of all SMEs were recorded as being
female led in the Q2 2020 release, an increase from
17.8% in Q1 2014 when the statistic was first reported.
This latest data point varied by age of the business with
a larger percentage of start-ups led by females
compared to businesses over 15 years old suggesting
the potential for a further increase in the overall number.
Finally, GEM data, which looks at the total early-stage
entrepreneurial activity rates (TEA rates), goes further
back along the potential supply line. Here, there is a
slightly different and more encouraging story emerging.
The percentage of female 18-64 year-olds involved in
the early stages of starting up a business has grown
from 3.2% in 2002 to 5.2% in 2018, having peaked at
7.1% in 2012. For males, the corresponding numbers
were 7.6% in 2002 and 10.5% in 2018, suggesting that,
in the latest year, around one third of people involved in
the early stages of new businesses were female, well
above the 13% response rate we have for female
angels. However, as noted in the Rose Review, this
figure still means the UK lags many peer countries on
entrepreneurship gender parity.32
6. Female angels
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6.3. What is the industry doing to improve
gender diversity?
Half of respondents reported no specific
policies to encourage female angels
There was a degree of openness in supporting the
growth of both female investors and founders amongst
our respondents, with some angels already taking
specific action to encourage more diversity in the
market. However, 50% of respondents were not aware
of their syndicate or network having policies in place
(figure 47). Amongst those who knew of targeted
action, the most common was proactive marketing
and communications aimed at sources of potential
female investors.
The most frequent suggestion to further increase the
number of female investors was to increase access to
information, education and awareness of the angel
investment sector (figure 48). Other suggestions
focused on more role models and case studies on
female angel investing and more female focused
events, workshops and working groups.
Despite our mixed results, market contacts reported
many angel group leaders are making significant efforts
and developing good practice to further encourage
female investors while industry bodies have started
initiatives such as the UKBAA National Women Angel
Investment campaign which seeks to better support
both female angels and founders.
Figure 48
Actions respondents felt could increase the number of women investors in the UK
Source: The UK Business Angel Market survey 2019 (n=168)
Gender neutral/support all investors
(no positive discrimination)
0
10
20
30
Percentage of angels
Don't know
23
Other
20
Dedicated co-investment fund to support
deals involving women investors
1
1
Cultural/societal change required
More direct action by Angel groups and syndicates to
attract & integrate women investors into their group
3
3
Nothing/unnecessary
4
More opportunities for women to
meet women angel investors
5
Improved advice & support from financial
intermediaries & wealth advisers to HNW women
6
Female focused funding/incentives e.g. tax, financial
Women focused events/workshops/working groups
Raise awareness/publicise
More role models & case studies on
women angel investing
Increased access to  information & education
aimed at potential women investors
7
7
16
16
30
Figure 47
Actions syndicates or networks are taking to attract more women investors
Source: The UK Business Angel Market survey 2019 (n=139)
50
17
9
4
4
4
3
3
14
1
1
1
Don't know
0
10
20
30
40
50
Percentage of angels
Prefer not to say
Other
Additional support to women investors to actively
participate in the investment process
Invitations to join/meet with syndicate/group
Identified individual/member advising and
supporting women to join our syndicate/group
Word of mouth
Networking events/groups
Dedicated education and training aimed at new
women investors in our syndicate/group
Made specific adjustments/changes
to our approach within the group
Proactive marketing/communication aimed at
sources of potential women investors
None no-action
The UK Business Angel Market 2020
42
British Business Bank
british-business-bank.co.uk
Endnotes
Endnotes
1 https://www.british-business-bank.co.uk/wp-
content/uploads/2020/06/British-Business-Bank-
Small-Business-Equity-Tracker-2020-Report.pdf
2 https://www.british-business-bank.co.uk/wp-
content/uploads/2018/02/Small-Business-Finance-
Markets-2018-Report-web.pdf
3 Financing High-Growth Firms: The Role of Angel
Investors
4 Exchange rate at 31st December 2018
5 https://eisa.org.uk/about-eis/facts-and-figures/
6 https://www.angelcapitalassociation.org/data/
Documents/TAAReport11-30-17.pdf?rev=DB68
7 https://www.british-business-bank.co.uk/wp-
content/uploads/2018/06/Business-Angel-
Reportweb.pdf
8 https://paulcollege.unh.edu/sites/default/files/
resource/files/2018-analysis-report.pdf
9 https://www.angelcapitalassociation.org/data/
Documents/TAAReport11-30-17.pdf?rev=DB68
10 https://www.askanews.it/cronaca/2018/10/18/
business-angels-donne-italia-al-primo-posto-in-
europa-pn_20181018_00214/
11 There were 48 respondents in Central and Eastern
Europe compared to a total survey total of 592.
12 At a 95% confidence interval we’d expect a margin of
error of 1-2%.
13 At a 95% confidence interval we’d expect a margin of
error of around 3%.
14 The female sample from our survey was relatively
small at 40.
15 https://www.angelcapitalassociation.org/data/
Documents/TAAReport11-30-17.pdf?rev=DB68
16 https://www.british-business-bank.co.uk/wp-
content/uploads/2017/10/291-Diversity-Report-2017-
Final.pdf
17 https://www.british-business-bank.co.uk/wp-
content/uploads/2020/02/Small-Business-Finance-
Markets-2019-20-report-FINAL.pdf
18 SQW (2019) Northern Powerhouse Investment Fund
– Early Assessment Report: https://www.british-
business-bank.co.uk/wp-content/uploads/2019/07/
NPIF-early-assessment-report-FINAL_24-July-2019.
pdf Fund Managers involved in the Regional Funds
also provide similar support to companies receiving
debt finance
19 British Business Bank (2019) UK VC and Female
Founders: https://www.british-business-bank.co.uk/
wp-content/uploads/2019/02/British-Business-
Bank-UK-Venture-Capital-and-Female-Founders-
Report.pdf
20 Wilson, N., Kacer, M. and Wright, M. (2019) Equity
Finance and the UK Regions: https://assets.
publishing.service.gov.uk/government/uploads/
system/uploads/attachment_data/file/821902/sme-
equity-finance-regions-research-2019-012.pdf
21 Mason, C. and Harrison, T. (2006) After the exit:
Acquisitions, entrepreneurial recycling and regional
economic development: https://www.tandfonline.
com/doi/abs/10.1080/00343400500450059
22 Based on global data, Pitchbook estimate that at
least 5.7% of entrepreneurs that achieved an exit
between 2006 and 2016 became angel investors and
roughly 1.2% founded VC firms. Pitchbook (2019)
Serial Entrepreneurs: Does Lightning Strike Twice?
https://pitchbook.com/news/reports/4q-2019-
pitchbook-analyst-note-serial-entrepreneurs-does-
lightning-strike-twice
23 “Belonging to the same racial group increases the
propensity to work together by 39.2%” - https://hbr.
org/2018/07/the-other-diversity-dividend
24 Investee locations are based on registered addresses
which may not be the address where business is
carried out. Investors making use of both EIS and
SEIS scheme will be double counted in totals.
25 https://www.bbinv.co.uk/regional-angels-
programme/
26 https://www.ethnicity-facts-figures.service.gov.uk/
style-guide/writing-about-ethnicity
27 There were 284 male angels but only 39 female
angels who made investments in 2018/19.
28 The Barriers and Opportunities for Women Angel
Investing in Europe
29 http://news.bbc.co.uk/2/hi/uk_news/4471763.stm
30 http://www.diversity.vc/wp-content/
uploads/2019/09/DI_Report_2019_Web_Version.pdf
31 https://www.angelcapitalassociation.org/data/
Documents/TAAReport11-30-17.pdf?rev=DB68
32 The Alison Rose Review of Female Entrepreneurship
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Acknowledgements
This paper was developed by the
British Business Bank Economics Team
including Matt Adey, Jake Horwood
and Zach Witton in collaboration with
the UK Business Angels Association.
We would like to thank all who provided
input and comments on the report.