Newspaper article The Journal (Newcastle, England)

Angels Help to Fuel Expansion of SMEs

Newspaper article The Journal (Newcastle, England)

Angels Help to Fuel Expansion of SMEs

Article excerpt

Any business start-up or expanding SME will require funding to fuel growth. One of the most effective forms of funding is provided by a business angel, typically a high net-worth individual, often with experience in the relevant market sector.

The role of the business angel will depend upon their preference and the needs of the company. Some business angels are effectively sleeping partners, providing funds only. Others will take a more hands-on role with a non-executive directorship, a mentoring role or the position of chairman or chief executive.

Since its launch in 2002, Investors Forum has enjoyed remarkable success, bringing together business angels and expanding firms seeking finance in the region.

Investors Forum runs regular meetings where SMEs with high growth potential present their plans to an audience of business angels.

Typically business angels will invest an average of pounds 50,000 as part of a bigger funding package. Business angels can invest individually or they may prefer to be a member of an angel syndicate but either way the investment will be in shares in the investee company.

Business angels can benefit from tax relief at 20pc on investments up to pounds 150,000 in any tax year through the Enterprise Investment Scheme (EIS), but must hold the shares for three years to retain full tax relief. Gains made from the disposal of shares, for which EIS tax relief was retained, are exempt from Capital Gains Tax.

One business angel to benefit from membership of Investors Forum is David Huntley, an experienced owner and chief executive of niche market engineering and technology companies in the UK and the USA.

Through Investors Forum, David Huntley invested in Nu Ground Technology Ltd, now trading as Electrokinetic Ltd. The firm specialises in electro kinetic geo-synthetics (EKG), embedding synthetic electrically conductive materials in soils, wastes or slurries to withdraw or introduce water more efficiently than by conventional methods. …

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