John Phelan, HBAN

HBAN: Business angels to invest €85m in Irish start-ups by end 2021

John Phelan, Halo Business Angel Network

3 April 2017

HBAN (Halo Business Angel Network) has predicted that business angels will invest €85 million in 264 high potential start-ups in the period running 2017 to the end of 2021.

The joint initiative of InterTradeIreland and Enterprise Ireland said it expects businesses operating in key industries such as ICT, mettech and enterprise software stand to gain from the predicted cash injection over the next five years.

Last year was a record-breaking year for business angel investment in Ireland, with €13.6 million invested in 50 early-phase businesses. Those investments leveraged a further €20.5 million from other public and private funds, bringing the total invested to €34.1 million.

“These forecasts are based on the growth we have seen in angel investment over the past five years. They clearly demonstrate a very strong and growing appetite for investing in start-up companies,” said John Phelan, national director, HBAN (pictured).

“In an international environment where low-risk investment receives miniscule or even negative returns, there is an increasing interest in balancing investment portfolios with higher risk seed investments.

“We expect the €85 million to leverage an additional €145 million in matching funds from public, private and international funders – such as Enterprise Ireland, venture capital firms, founders and European investment funds – so this is very exciting for the future of angel investing in Ireland.”

According to research by SQW carried out on behalf of HBAN in 2016, serial business angels account for 10% of Irish angel investors and more than a quarter of investments; business angels on the island of Ireland are predominantly male – over 90% – and generally middle-aged, with more than 69% of survey respondents aged 45 to 64.

The report also found that angels typically invest in related industries, but rarely in one single industry; that ICT and related digital industries were the most common sectors that survey respondents invest in; and three-quarters of respondents were members of investment networks or syndicates.

“It is interesting to see that two-thirds of the value of investments comes from just 10% of investors. In HBAN, we are actively seeking to increase the number of business angels who take a broader portfolio approach to investing. This is proven to increase the chances of positive overall returns and thus increases the appetite for return investing,” said Phelan.

“Angels will often focus their investments on innovative technology companies with international scalability, which is a key source of growth for Ireland. They often invest locally because they want frequent interaction with the companies in which they invest. This is very good for overcoming the lack of risk capital outside core economic regions such as London and Silicon Valley.

“Our business angels also provide smart money, as they themselves are typically successful entrepreneurs, or have held senior positions in large successful companies. This allows them to be hands-on investors, who can contribute their skills, knowledge, experience and networks.”

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