Dear Reader

Since returning from my excellent bucket and spade holiday in Wales a few weeks ago, I have been delighted with the uptick in interest in AngelNews.  Most importantly, we have a new Preferred Partner, Go Beyond www.go-beyond.biz .  Go Beyond offers cross border investment opportunities, pooling, training/coaching, due diligence and investment monitoring services.  It works with individual investors, family offices, professional groups/associations, corporations and entrepreneurs and operates in Switzerland, France, the UK and Malta. Its team is comprised of seasoned entrepreneurs/general managers who are now business angels, led by Brigitte Baumann whom many of you will have heard of if you do not already know.
We are looking forward to working closely with Brigitte (and our other Preferred Partners) on a number of new initiatives which will start being announced in the September edition of the AngelNewsletter Online. 

We have had an excellent reponse to our survey on the financing needs of AngelNews entrepreneurs and the investment activity levels of angels over the next 12 months.  We are preparing a report on the results with the kind support of the Yorkshire Association of Business Angels, but for now the good news is that the market seems to be holding up.  Interestingly a number of entrepreneurs told us they do not have a great need for cash whilst the investors tell us they are still investing in their existing portfolios and in new deals.  We will let you have a copy of the report when it is published.

My book is almost finished and should be published in late September.  There have been some fascinating contributions from the AngelNews community and people who have been reading it, tell me that one of the best bits has been trying to identify the sources of the many anonymous quotes and case studies.  If you would like to pre-order a copy please email me at Modwenna@angelnews.co.uk. 

As the summer tends to be thinking time for many people, this month I have written about how we should Scrap the Gap.  I have no faith any more what the Equity Gap really means.  I hope you will find the article thought provoking.

Have a great rest of the summer.

Best

Modwenna

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ALERT! – Dealing with inflation

Depending on your spending habits you may or may not have noticed rising prices yet, but recent shock headlines of 35% price rises in gas for consumers make it clear that we are now fully into a new type of economic environment, when inflation is once again a real issue.  You would have to be in your late 50s to have been well into your career at the start of the UK’s last inflationary boom in the 1970s, which may be true of many angel investors, but is unlikely to be true of many entrepreneurs in our community.

So are you start to return from your holidays here are a few tips for dealing with an inflationary economy

As an entrepreneur

1. Find yourself a group of older business people who have experience of managing business when inflation is a real issue.
2. Redo your financial projections based on sales staying still, but all your costs rising by 10% a year.  Plan refinancing accordingly.
3. Undertake a strategic cost analysis and assess the impact inflation will have on your cost base.
4. Take a hard look at employee salaries, especially lower paid workers who will be disproportionately affected by rising food and heating costs.  Decide what you are, or are not, going to do about it if they ask for pay rises.
5. Where possible fix supplier contracts – especially essential services such as server hosting and your telecommunications needs.
6. Be prepared to renegotiate with your customers to get price rises, but be ready to offer value added products and services for the money.
7. Beware of tying your own business into long term fixed price contracts, especially if your principal cost in delivering the contract will be wages.
8. Remember if the credit crunch continues you may find overdrafts being cancelled at short notice, so, where possible set up fixed term loans and make sure you can meet the repayments. 
9. If your business has cash available, see advice about how to hold it if you do not need it in the short term.  Leaving it in a cash deposit account may not be the answer.
10. Don’t forget to prepare for rising costs at home yourself. 

As an investor

1. Spread your risk.  Reassess your portfolio and aim for inflation-resistant or inflation-proof assets.  Look at land, gold and index-linked assets (bearing in mind what they are index-linked to!).  Look also at spreading your investment into other economies where inflation risk is lower.
2. Take care about leaving your wealth as cash.  Spread cash amongst different institutions to mitigate the risk of bank failure.
3. Think about borrowing yourself – inflation will eat away the value of the loan.
4. Think what you can teach the youngsters running businesses today based on what you learned then.
5. Be prepared for cash calls from your investee companies and decide how you are going to react if the cash is really for working capital and does not come with an associated rise in productivity or in business development.
6. Your skills might start becoming very valuable to your investee companies if you can afford to provide them at little or no cost.  You might save them the cost of an expensive employee.
7. Review portfolio cash flow projections and adjust costs for 10% per annum inflation. 
8. Look for new angel investments that are so small or young today that inflation will hardly affect them.
9. Consider other alternative asset investments such as art which will provide pleasure even if they do not hold their value.
10. Have dinner with other investors who remember the 1970s and reminisce over a good ’75 Chateau Margaux!

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Key statistics

Population: 5.3million

• Number of separately identifiable business angels: 458+ (source:EBAN)
• Number of prominent business angel groups/networks: 2
  • Sitra Pre-Seed Finance - independent public sector foundation/INTRO www.sitra.fi
  • FLAG (First Line Angel Group) – private sector launching 2008. Note:website is www.flag.fi, but was not working at time of writing.
• Amount invested by business angels in 2007: €5m in 10 deals
• Sector bias: TMT, followed quite distantly by Clean Tech and Life Sciences
• Relationship with VC community: integrated via Sitra, but also at a regional level through groups such as Technopolis; significant integration between government institutions (esp debt related) and the private sector.

In 2007 I had the opportunity to visit and learn about the Finnish angel and early stage investment market on two occasions, one as the guest of the EASY project an EC funded pan-European investment project and secondly as a guest of Technopolis, so this article is a bit overdue!

I was remarkably impressed with what I saw.  Finland is a small country and therefore the integration between different funding sources, including business angels is closer than you might see in larger countries.  But what the country lacks in size it more than makes up in terms of its approach to supporting innovation generally and entrepreneurs specifically, especially in sectors such as telecommunications, healthcare, energy and mechanical engineering.  At hubs across the country, usually base in or close to universities you will find incubators full of a vibrant mix of entrepreneurial businesses.  The Finnish approach is to pick up likely entrepreneurs at a very early stage, use public funding (delivered by private sector contractors) and state guaranteed debt to get them and their business to a realistic state of investment readiness and then pursue an established ladder of funding via business angels and venture capitalists to grow the best businesses into international concerns.  On some blogs there have been mutterings by entrepreneurs that the level of state involvement creates too much bureaucracy, but the entrepreneurs I have met gave no hint of any complaint. 

Finnish entrepreneurs would blend happily into any group of international entrepreneurs and there are even a few expats who have madea conscious decision to set up shop in Finland because of the specialist expertise in a university or in the case of mobile technology because of the presence of Nokia.  Likewise Finnish angels also mix happily with investors from abroad and from observing and chatting to them, suggested to me that their investment preferences and deal sizes are also in line with other western economies.  Many Finnish angels are former entrepreneurs who have cashed out of businesses they have built and they decide to start investing because of the skills they can offer to the next generation of entrepreneurs.  Outside Helsinki some of the angels have grouped together to form small venture capital firms, starting by investing their own money.  Once they have a track record of success they bid for institutional funding and move up the investment ladder accordingly.  Even if their original business was not particularly hi-tech they tend to back hi-tech once they start investing.  A rough breakdown provided by SITRA suggests that 30% of deals are in ICT, 15% in health-related and 55% in manufacturing.

Like most countries it is not easy to find a Finnish angel investor without going through an intermediary, but proportionately there are almost as many angels per head of population as elsewhere most other western European countries.  SITRA offers an additional benefit that neither entrepreneurs nor angels are charged fees to avail themselves of the services it offers.
Finnish angels are interested in what is happening internationally in the international marketplace.  For example many of them have attended EASY investment meetings, but as a rule continue to want to invest in businesses based in their own country. 

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AngelNews is now working alongside Daniel Stewart to publish their morning reports on the state of the stock market and to give you up to the minute research on stocks and shares covered by Daniel Stewart’s team of analysts.

We have been publishing these morning reports since 19th March, but here is an idea of how some of the shares have performed over July since Daniel Stewart tipped them:

The five best tips in July

Brokers’ Tips includes a short summary of the recommendations made by Daniel Stewart. We will also shortly be adding Daniel Stewart’s general sector research to our site.

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Emerging Technologies, Opportunities for Tomorrow

On the 12th of June 2008, the University Arms Hotel in the heart of Cambridge played host to one of the largest student-run entrepreneurial events in Europe, Technology Ventures Conference (TVC) 2008 organised by the Cambridge University Technology and Enterprise Club (CUTEC). CUTEC welcomed over 250 delegates to the conference, where the overarching theme was ‘Emerging Technologies, Opportunities for Tomorrow’. In accordance with the day’s agenda, time was mainly split between three keynote themes and three panel discussions in the fields of Web2.0, Biofuels and Personalised Medicine, consisting of around five industry experts and a moderator. Additionally, conference attendees had the opportunity to network, listen to the pitches of i-teams-representatives- a CUTEC-supported entrepreneurial initiative within the university - and explore a showcase room exhibiting some of the UK’s freshest technology start-up companies.

Following breakfast, CUTEC’s TVC 08 commenced with an introductory speech by one of Cambridge’s most prestigious entrepreneurs, Dr Hermann Hauser, Founder and Director of Amadeus Capital Partners. Dr. Hauser spoke fondly of several hi-tech ideas that have emerged from the University of Cambridge to develop into successful businesses. Specifically, he described how academics have now seen the error of their ways by not embracing business philosophy and explained in detail what it takes to be innovative. The first keynote speaker, Garrett Camp, Founder and Chief Product Officer of StumbleUpon, followed Dr. Hauser’s speech. Seated in the hotel’s most elegant rooms, conference guests listened to Garrett’s much anticipated speech on ‘Search and Discovery’, wherein he discussed the potential of web navigation via social networking sites. Following Garrett’s talk came a panel of industry experts to address the theme of ‘What’s Beyond Web 2.0?’. Moderator Chris Potts, Director at Dominic Barrow, initiated and facilitated the enthusiastic panel debates that arose from this topic, gently steering panellists towards answering questions such as ‘How can Web 2.0 approaches be applied in the corporate world?’.

During lunch attendees had the opportunity to combine networking with perusing a varied showcase of innovative technological start-up companies. This was followed by the second keynote speaker, Michael Liebreich, CEO at New Energy Finance. Michael spoke about ‘Global Trends in Clean Energy Investment’ and endeavoured to answer the prominent question ‘Can capital markets save the world?’, a theme keenly ensued by the ‘Future of Biofuels’ panellists - moderated by Peter Horsburgh, Partner at ETF - who responded to questions such as ‘What is the true environmental and social impact of biofuels?’.

The final panel topic and keynote theme, ‘Personalised Medicine’ and “Creating and leading a global disruptive technology to international success” occurred after the last of three short breaks. This time, the panellists discussed their views on personalised medicine, a topic met with enthusiastic involvement to create an ideal framework wherein to ponder the realistic potential as well as ethical implications of medicine tailored to the individual. Moderated by Edward Blair, Director at Integrated Medicines Ltd, the panellists addressed several decisive questions, such as ‘What are the social and ethical ramifications of these products?’. Continuing in this physiological vein, Peter Hartzbech, CEO and co-founder of iMotions-Emotion Technology entertained conference guests with start-up anecdotes and offered sound advice on how to raise and lead a new company from infancy to international success. iMotions’ idea to measure a person’s responsiveness to stimuli via eye-movements and then analyse this data for potential application in the advertising industry was exceptionally novel, proving fruitful relatively quickly. A fitting end, perhaps, to a day attendees have since described as ‘inspirational’ and ‘exceptionally organised’. Visit www.cutec.org for further details.

Sponsors of the event:
Northrop Grumman (Platinum), Dfj esprit (Platinum), EPSRC (silver), Greater Cambridge Partnership (silver), Taylor Wessing (silver) and Unilever (silver), Angel News (media) Technology Review (media), Newspepper (media) and The National Student (media).

1 A mix of Undergraduate/Masters/PhD/Post-Doctoral students, Professionals, Venture Capitalists, Business Angels, Investors, Entrepreneurs (serial and aspiring) and Governmental Representatives.
2 I-Teams are groups of entrepreneurial post-graduate students who work with real inventions to determine the best route for their commercialisation. For more information visit www.iteamsonline.org.
3 Frank Böhnke, General Partner at Wellington Partners; Alexander Straub, CEO at Straub Ventures; Alex Hoye, Chairman of Advisory Board at Seepcamp; Julie Meyer, CEO at Adriane Capital.
4 Robert James, Partner at DFJ Esprit; Georg Buchner, VP Business Development at Novacta Biosystems; Andy Richards, Early Stage Bio Tech Investor; Harry Fisher, Director & GM Civilian Agencies Grp at Northrop Grumman; Richard Seabrook, Head of Business Development at The Wellcome Trust.

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Scrap the gap

“the individual private investor remains an indispensable source of finance in the Macmillan Gap, particularly for the newer and smaller propositions.”  Raymond Frost 1954.

There is an elephant in the room.  So I must set out my stall carefully.  A little knowledge is a dangerous thing and I do not claim to have academic expertise in either economics or economic history.  Despite this, I have had an increasingly burning desire to challenge the way we in the market for early stage investment engage with the government, particularly in the context of financing enterprise.  Time and again my thoughts have returned to the core justification used to support or dispel arguments about financing in this market – namely the “Equity Gap.” 

I must be clear.  I wholeheartedly believe that there is a widespread mismatch between the demand from businesses to raise capital and the supply of that capital.  There are many hundreds of excellent people across the globe working in valid and proper ways to address this issue.  The problem, as I see it, is that there is not one gap, but several.  In fact, you could argue there are so many gaps that, if you tried to map them, you would compete with a piece of Nottingham lace for the number of spaces per square centimeter.  Ranging from the newest entrepreneur founding his or her business over a kitchen table this morning to the directors of HBOS, who have struggled to get their rights issue away, many, many people can, with justification, argue that they are on the wrong side of the gap from the finance they desperately or deservedly need. This is why I believe the phrase “equity gap” is no longer fit for purpose and a new definition must be brought into play.

A little knowledge is a dangerous thing and I cannot become an expert in over 70 years of economic history in a few minutes.  It is only with this knowledge that I could explain course the “equity gap” has travelled to get to where we are today.  So I decided not to try.  Instead I sought out a copy of the original report that defined the equity gap.  This was the The Report of the Committee on Finance and Industry, June 1931, chaired by Macmillan.  I could not get hold of it via the internet in the time allowed, but did fall across a fascinating academic article written by Raymond Frost in 1954 called “The Macmillan Gap 1931-1953, which considerably helped me as it quoted the section of the Report that explained and therefore raised the whole issue of and the role that government might play in addressing the “Equity Gap”.

This is what Raymond Frost quoted the Report as saying:

“It has been represented to us that great difficulty is experienced by the smaller and medium sized businesses in raising the capital which they may from time to time require even when the security offered is perfectly sound. To provide adequate machinery for raising long dated capital in amounts not sufficiently large for a public issue, i.e. amounts ranging from small sums up to, say, £200,000* or more, always presents difficulties. The expense of a public issue is too great in proportion to the capital raised and therefore it is difficult to interest the ordinary investor by the usual method; the investment trust companies do not look with any favour on small issues which would have no free market and would require closely watching; nor can any issuing house tie up its funds in long-dated capital issues of which it cannot dispose . . . as we do not think that they could be handled by a large concern [i.e. financial institution]1 the only other alternative would be to form a company to devote itself particularly to the smaller industrial and commercial issues. . . . We see no reason why with proper management and provided British industry in general is profitable, such a concern should not succeed.2”

1  Raymond Frost’s insertion
2 The Report of the Committee on Finance and Industry, June 1931, Cmd. 3897, para. 404.

Frost was writing in 1954 – a few years after the creation of the first such institution to which this article alluded.  This was ICFC, the forerunner of 3i, founded in June 1945, immediately after the end of the Second World War.  Interestingly it was established by the Bank of England and the English and Scottish banks with the purpose:

“to provide facilities for the corporation to borrow from themselves up to a further £30 million. The corporation's purpose was to provide long-term and permanent capital in amounts which would normally range between ,£5,000 and £200,000 for industrial and commercial businesses established in Great Britain, 'particularly in cases', so runs the wording of its Articles of Association, 'where the existing facilities provided by banking institutions and the Stock Exchanges are not readily or easily available'.

As Frost states “The gap which it had to fill was, ….., the lack of long-term finance in amounts up to £150,000-£200,000, on other than exclusively freehold security or without security of any kind, and in the form of unquoted securities or other financial paper without a ready market.”

The Macmillan Report was proved right – 3i is now a FTSE100 company.

Funnily enough the Frost article could almost have been written today in terms of its content and arguments.  No so much has changed in another five decades, except for one thing – the value of money. 

How much do you think £200,000 in 1931 would be worth today?  I was pointed to a great website www.wealthmeasure.com which enabled me to work out, based on the retail price index, that it would be worth £9.7m.   And I know from conversations with senior accountants that they too believe that the Equity Gap, as it is currently thought of today, is open up to that level.  Why then does our Government, not least driven by EU policy, set an upper limit of £2m investment per company as a mainstay of the restrictions on the various tax break schemes offered to UK citizens?

The problem with a gap is that it is hard to define. It can be wide or narrow, shallow or deep: many gaps are deceptive – below the top they can be wider, narrower, deeper or shallower than the external observer can see from the outside.  Only this week I was shown a diagram of the caves at Wookey Hole, which I think are symbolic of how very different a gap can appear in its entirety compared with looking from the top.  I do not have permission to reproduce the schematic of the caves, but suffice it to say, from a small entrance you pass through a series of caves of varying sizes and proportions.  And cave divers have discovered many more caves, which cannot yet be seen by the rest of us.  We are forced to rely on their expertise and reporting to understand the picture.

In contrast a number is hard and exact.  No-one can argue that £1 is not £1 today, they can only argue that it is worth more or less than in the past or the future.  Here lies the rub.  Call it the Equity Gap if you like, but even if you do, I am not sure you will ever be able to convince me that the size and scope of that Gap can be defined for more than a month or two, especially now inflation in the UK is running at anything from between 3.8% and over 10% depending on who you are.  These days it is not so much as Gap as a Challenge .

Use of the term “Equity Gap” has other flaws.  Financing businesses can take the form of equity or debt.  With the credit crunch in full swing it is pretty safe to assume that businesses are going to find borrowing tough going over the next few quarters.   The press and advisers alike are warning that companies must expect to find their lines of credit suddenly withdrawn.  From the point of view of business, the debt “gap” is going to become a lively topic for discussion.

For government you have to read tax in the context of the Equity Gap and even the debt gap.  Investors and lenders will be stimulated to invest in more risky opportunities if there is a financial benefit above and beyond the norm.  Government helps equity investors by providing tax incentives which give some of this financial benefit.  The UK is luckier than many because of VCTs and the EIS Scheme and even the much underused Corporate Venturing Scheme.   And it helps in the debt market with the Small Firms Guarantee Scheme.  Commentary on the effectiveness of these schemes is not a matter for discussion today, but no-one would dispute that the wealthy, if stimulated by tax breaks, will be encouraged to invest in more risky opportunities. Our recent survey of investors (a separate report will follow in due course) suggests that investors have not lost their appetite for EIS relief if offered.  I cannot find any up to date statistics on the Small Firms Guarantee Scheme (the last report was published in July 2007), so we do not know if it is still “doing its job.”   I will give the banks the benefit of the doubt and assume that they are still using the Scheme where they can.  This equity and debt will only continue if superior returns are to be had and in this next phase of the economic cycle I suspect it will fall to government to make the tax breaks more generous and easier to obtain as the investment opportunities get riskier.

Back to phraseology.  In the City people tend to refer to the Enterprise Value of a business which incorporates both the debt and the equity element of a business’s capital structure.  It seems fair to me therefore that we should talk about the Enterprise rather than Equity or Debt in the context of smaller, unquoted businesses too.

To change a well established phrase which is common parlance even if the origins of its creation are now obscured is difficult.  It needs the will of the people to be adopted and a strategy and strong leadership from the front to implement the change.  One article from AngelNews will not make anything happen, but just in case others feel as we do, how about starting off with the following scenario.

Change the name of the mismatch between investor and investee from the Equity Gap to the Enterprise Challenge, raise the bar as high as possible - £10m at the least - as the ceiling for the amount of money that can be invested into an single enterprise and continue to attract debt providers and private investors to hand over cash by making allowances, breaks and guarantees as flexible and generous as possible.

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Imperial Innovations, the IP commercialisation and investment company based at Imperial College London, was ranked second in the UK on volume of deals by Director magazine in 2007. We thrive on being at the forefront of innovation and start-up company incubation.

To enhance the quality of our deal flow pipeline in the cleantech sector, we are collaborating with the Carbon Trust and WRAP to deliver incubation services to the best low-carbon and recycling technology start-ups in the UK.

What's in it for us?

An opportunity to work with the best UK-based businesses and potentially invest in their further development.

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This month Gabriel and the Cherub discuss the issue of dress and the attitudes of the younger generation
I have met some exceptionally good entrepreneurs, but they are only in their mid 20s.

They wear t-shirts and jeans to meetings and negotiate with my by text.  I have also been asked to join them on Facebook.  Should I worry or just go with the flow?

If you have a question that you would like Gabriel and The Cherub to answer please email it to gandc@angelnews.co.uk.

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How to make money out of angel investing part 10 by Nicki Hattingh, founder, The Creative Arts Investment Network

At a time when UK creative arts projects, particularly film and theatre, are seeing an increase in global recognition and success, is now perhaps the right time to start to look at investing in some of the UK’s creative talent?  And if so, how do you do it?

If you are unfamiliar with the territory, here are some statistics to whet your appetite:  In 2007, British films were a $3.3 billion international hit (this represents a 50% increase on 2006 figures of $2.2 billion), scooping 32 awards (15% in total) and demonstrating the impact of UK talent on the global film industry.   Seven of the top 20 films at the UK box office in 2007 were British, accounting for 1 in 4 cinema tickets sold in the UK (29% total UK box office).  (British Film Industry statistics for 2007).

Cinema-going continues to be one of the most popular forms of entertainment in the UK and despite the tough economic outlook currently, the film industry is optimistic about the continuation of current box office success.  The film industry doesn’t seem to suffer as much as other industries in tighter financial times as people see watching movies (in cinema or at home on DVD) as an inexpensive form of entertainment.

2007 also saw record attendances at London theatre with an extra 1.25 million visits to plays, musicals, opera and dance in the Capital.  The Theatre Capital of the World (London) continues to come up with shows that the public want to see and attendances in 2007 stood in excess of 13.5 million, generating revenues of £470 million. London retains its status as the theatre capital of the world, producing more shows and attracting larger audiences than anywhere else, including Broadway, andWest End theatre is among the biggest tourist attractions in the UK. (SOLT statistics for 2007)

The challenge with investment into creative arts projects is that it is difficult to predict with any accuracy the revenues that a project will generate even if comparables can be found – and be realistically used.  Another complicating factor for potential investors is that each sector within creative arts, eg;  film, theatre, television, music, live events etc, has very different financing structures and ways of recouping investment and generating IP, value, profit and ROI.  So, how do you judge whether the proposition you are looking at is going to have a greater or lesser chance of ‘making it’ than any other?

Well, it’s a risk, like any other investment and it doesn’t appeal to most investors, but it does appeal to some – and if you do start to hear the ker-ching from the tills at the box office, then investors could potentially enjoy phenomenal returns.  Everyone will mention big budget blockbusters like the recent Batman movie, The Dark Knight.  The film grossed a record-breaking $300 million in its first 10 days from a budget of $180 million, but investors can get really lucky with low budget movies like the phenomenally successful $5 million movie, My Big Fat Greek Wedding, which has grossed $356 million since 2002.

Recent UK box office hits include Mamma Mia which cost $52 million to make and has grossed $174 million already and Harry Potter and the Order of the Phoenix cost $150 million to make and has so far grossed $937million.  Fine returns indeed.  However, smaller indie (independent) low-budget films like Control and This is England also demonstrate the real success and potential of the UK film industry.

Creative businesses are no different to other businesses in that the tools of financial analysis apply equally well to creative arts companies.  The key components to consider when assessing whether a creative arts project has potential for commercial success include therefore; who owns the title (IP); the artistic merit of the attached production team, including directors, producers, casting director, musical director, etc; the quality of the script and writers; the quality of the attached cast; the quality of the marketing plan for each of the territories for release; competition from other projects at launch; the mood and taste of the viewing public at launch; and potential for merchandising and secondary avenues of revenue generation (sales to other media distribution channels, DVD, books, soundtrack, retail merchandise) for the individual project.

Having said all that, assessing the potential of a film or theatre project is no more complicated or accurate than looking at all the different elements of a technology company, its management team and the likely success of a new and potentially disruptive product.  Experienced investors in the sector quickly get a feel for what they are looking for and their opinions differ just as much as those looking at mainstream technology investments.  New investors to the creative arts sector should look to work and invest alongside experienced creative investors just as new investors to a new business angel network.  The creative arts sector is quite a niche area though and it would be advisable to seek the advice of a specialist media lawyer or accountant when considering investing in the creative arts.  The perceived risks commonly associated with creative arts projects can often be mitigated through careful consideration and advice from specialist media lawyers or accountants.

This is a fragmented and often secretive sector, so where do you go to look for quality film and theatre investment propositions?  Attend lots of creative arts investment meetings as you can before you start to invest and also go to seminars and workshops given not only by expert investors but also by industry experts.  Through this you will learn more about the important issues and the types of financing structure that are normal (and right) for creative arts investments.  You also need to learn about different tax breaks for this industry which tend to come and go.

One of the biggest differences in creative arts investing is the minimum subscription amount.  Whilst in the “normal” angel world you are often expected to put £10,000 in as a minimum, some creative arts investments look for only £5,000 or even £1,000, though your stake will be accordingly smaller.  The other difference is that for some investments, particularly theatre productions you will know almost as soon as play or musical is launched that it is going to be a success or not.  And if it is not a success there is a good chance that your investment will be worthless.

Creative arts investing has a great advantage as it has a lot of “fun factor.”  If you fancy a little glamour and walking up the red carpet on opening night, then an investment into creative arts could be an option for you.  Many film and theatre producers allow access to film and theatre sets, production studios, wrap parties etc in order to build and develop their relationship with investors with whom they hope to build a long-term relationship.   Investing in theatre and film productions is certainly risky and not for the fainthearted (as with any investment, you must be prepared to lose your money), but it can be extremely exciting and lots of fun and you never know, you could find yourself sitting next to Pierce Brosnan on the opening night or pay for you and your friends to have the best seats at the theatre on a small part of the profits you will make.

If you want to find out more about creative arts investing contact: Nicki Hattingh nicki@cainuk.com, The Creative Arts Investment Network www.cainuk.com Tel:   +44 (0)1869 337269

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When: Wednesday 24th September 2008, 18:30 to 21.30hrs
Where: Sudbury House Hotel, Faringdon, Oxfordshire

Leila Wilcox founded award-winning children’s toiletries range Halos n Horns in August 2005 and annual turnover was £9.7m for the first year. Developing the concept with Ivan Massow (her mentor from Channel 4’s Make Me a Million) the company’s shampoos and body washes are now stocked in Waitrose, Sainsbury’s, Tesco, Morrisons and Asda. Thanks to a partnership with distribution specialists Ceuta Healthcare, which handles the day-to-day running of the business, the brand is expanding abroad in Ireland, Malta, New Zealand and Australia.  Leila recently sold Halos n Horns and has branched out in a totally new market – Medical Tourism.  This was prompted by a personal need, seeing the poor state of UK hospitals and being amazed by foreign hospitals she decided to have treatment abroad….only there was no travel policy available. Her new business, Angelis Insurance launches in Aug/Sept and is the first Insurance for this market.  Leila will talk about her business journey from start up and growth to sale of the business and into another venture.

This event will also be the launch of Mission Growth in Oxfordshire. Mission Growth helps women owners of growing businesses to learn, share and support each other to achieve business and personal success. They are facilitator led groups of up to 15 members from non-competing businesses who meet for ½ day every month to address their business issues. Sue Stockdale, founder of Mission Possible will talk about Mission Growth and how it benefits growing businesses.

Mission Growth is supported by Barclays, Kleinwort Benson and Hyro Online.

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If you had been investing back in May 1983, these are the sort of opportunities that would have been on offer to you!

Did you back any of them or do you know someone who did? Perhaps you know what happened to them for some other reason. If so, please let us know – we would love to find out (email replies to modwenna@angelnews.co.uk)

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We know you all want to meet each other, get more out of us and our Preferred Partners and generally make AngelNews work for you. So we have decided to up the ante on the number of events we would like to invite you to. Here is a list of them. We do hope you will be able to make it to one soon.

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Modwenna Rees-Mogg
Editor: AngelNews
Email: modwenna@AngelNews.co.uk

AngelNews
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Tel: +44 (0) 1275 333 443

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