Intelligent Partnership today announced that it is teaming up with the UK Business Angels Association (UKBAA) to launch the Angel Investing Accreditation – the new official qualification to promote effective investments in Britain’s small businesses.
With the numbers of angels in the UK set to grow, it’s vital that new angels can access the education and resources they need to invest with confidence. Without the appropriate skills and knowledge, enthusiastic but inexperienced investors may run the risk of losing their money. For these reasons, Intelligent Partnership and the UKBAA are launching an e-learning angel investing qualification.
Intelligent Partnership is the UK’s leading provider of education and insights on alternative investments and produce award winning annual industry reports for the EIS, VCT and Crowdfunding sectors, as well as providing IFAs with training on investing in small, unquoted companies.
They are now taking that offering online, where it can be accessed by a much broader audience and will be aimed at angel investors, both current and prospective.
The course will be accredited by the Chartered Institute of Securities and Investment (CISI), and SFEDI, the standards-setting body for Enterprise and Entrepreneurship and comprise three levels:
- Introduction to Angel Investing – a 45 minute short online course aimed at anyone who is interested in knowing more about angel investing;
- UKBAA Angel Investing Qualification – a new Level 5 Diploma qualification recognised by Ofqual, the registered quality standards agency.
- UKBAA Accredited Angel Investor – individuals who have made investments in small businesses and can demonstrate their knowledge and experience will be able to be validated as a UKBAA Accredited Angel Investor.
There is an assessment at the end of each level, and ongoing criteria need to be met to retain the accreditation.
Angels who achieve the qualification will have been through course content covering all of the important elements of angel investing, including sourcing opportunities, putting together deals, due diligence and tax planning. The content is being developed by Intelligent Partnership in conjunction with the UKBAA and current successful angel investors. Course participants will also be given access to the latest research and resources on angel investing, and put in contact with existing angel networks.
Angels who achieve the Accredited Angel Investor qualification will be investors who already have experience of successfully investing in early stage companies, and will be qualified to play the role lead angel in a deal, or to head up an angel network or syndicate.
Guy Tolhurst, MD of Intelligent Partnership said: “We’re delighted to be partnering with the UKBAA on this initiative. We know from our work training financial advisers in this area that once people acquire the skills and experience they need, they invest with much more confidence. The Angel Investing Accreditation gives everybody the chance to get themselves to that level, safe in the knowledge that they are learning from independent experts.”
Angel Investment fulfils a vital role in the economy by supporting entrepreneurs and remains the most significant source of equity for early stage businesses. It is estimated that £850m per annum is invested by angels annually in the UK, more than 2.5x the amount of Venture Capital invested in early stage small businesses annually.
George Osborne acknowledged the importance of investment in early stage companies in the budget and announced measures extending entrepreneur’s relief to further encourage the growth of Angel Investment.
Under the new rules, business angels and other investors will no longer have to hold a minimum of 5 per cent of a business to qualify for entrepreneurs’ relief; nor will they have to be an employee or director of the company. Entrepreneurs’ relief of 10 per cent will be available on gains from newly issued shares from unlisted companies (but including those on the Alternative Investment Market) on or after March 17th 2016 and held for a minimum of three years from April 6th this year.
These new incentives, combined with the suge interest in online equity crowdfunding (which grew 295% from £84 million raised in 2014 to £332 million in 2015), and the popularity of tax-advantaged venture capital schemes such as the EIS (£1.5bn raised in 2013/14 and £12.3bn raised since the scheme’s inception in 1993), mean that the numbers of people making Business Angel investments are set to grow from the estimated 18,000 angel investors that already exist.
The UK does not have a compulsory accreditation requirement, unlike the US where Angel Investors are now required to be accredited and must prove that they have sufficient income or assets in order to make investments in small businesses. Up to now there has been no formal means to verify that an individual has the ability and competence to make investment decisions. Under the FCA, individual private investors in the UK must prove that they are high net worth or sophisticated, but this is a self-certification process. At the same time we have a light touch process for crowdfunding which requires self-certification and a short test of understanding of the risks.
Julia Groves, Chair of UK Crowdfunding Association said: “Early stage investment is becoming more diverse than ever as Angel-led crowdfunding opens up access for entrepreneurs to a wider range of funders. And we all know there is much more to backing than money: these investors can also bring the skills, experience and networks to UK entrepreneurs to help them succeed.”
“Having opened up the market to this next generation of investors, we now need to provide them with the tools and education to assess both the opportunities and the risks. This is another excellent initiative from the UKBAA and I expect several of the equity crowdfunders to be amongst the first to sign up.”
Jenny Tooth OBE, CEO of UKBAA, said: “As the trade body we are uniquely placed to establish these new quality standards for angel investing, bringing new confidence into the market at a time when so many individuals are attracted to back small businesses. Accessible online this will enable new and less experienced investors across the UK, to gain recognised skills, leveraging the experience and insights of seasoned investors for a more informed approach to backing growth stage businesses. We will also be able to accredit quality training being delivered by our investor members around the regions.”
Michael Blakey, serial tech investor and UK Angel Investor of the year 2015-16, said: “Having been investing for many years, I know that it takes some time to acquire the knowledge and skills to choose which businesses to back and achieve a successful portfolio of investments. The new UKBAA Angel Investing Accreditation offers the opportunity for new investors to access this experience and get more quickly up to speed, whilst recognising those investors in the market who have the skills and competence to make good decisions” .
Simon Calver, ex CEO of LoveFilm, partner at BGF Ventures and chair of UKBAA, said: “It is vital that we have a strong and effective Ecosystem to support angel and early stage investment across the UK. The new UK Angel Investor Accreditation will underpin this by building the capability and capacity of the investment community across the UK to fulfil their key role in supporting the growth and scale up of UK businesses”.