In the U.K., angel investors are leveraging crowdfunding for the first time. This ultra-exclusive group of private investors is using crowdfunding to two ends: to pool its money with smaller investors, and to recruit and train new members.
The first has been made possible through partnerships like the one between Syndicated Room(SR) and the Cambridge Capital Group (CCG). The two come together on a crowdfunding system called “Syndicate Funding,” where the crowd of small investors and angel investors can co-invest on the same deals.
Membership in Syndicated Room is free. Its members can invest as little as £500 directly into real business angel investments.
The Cambridge Capital Group is an exclusive and leading business-angel group of 40 investors and private-venture funds. It has been investing in high-tech businesses and backing technology startups since 2001. Membership in CCG is an application process, and is normally initiated through introductions by existing members. Members have invested millions of pounds into its current portfolio of more than 30 companies.
While SR members will not be able to influence a startup company’s direction and strategy, they will get exactly the same economic deal, as well as make the same profit pound for pound, as the experienced and larger business angels of CCG. Small investors looking for financial returns through equity crowdfunding have access to the same deals led by the business-angel professionals who do it for a living.
Angel investors are now taking the lead in embracing crowdfunding. Knowing that these smart angel investors only invest their own money into businesses they believe will give them a great return, it’s only smart for the crowd to follow where the angels lead. Angel investors alongside crowd investors; it’s now the trend in the U.K. as well as in other parts of Europe, such as Belgium and Italy.
It’s just what I want to see, the European Business Angel Network (EBAN) embracing and starting to take a proactive role in this new ecosystem, where deal flows are coming in quicker and proof of concept brings in regular people investing alongside the angels.
Platforms like Syndicate Funding also allow the angel networks to find and train new angels. Crowd investors will eventually become angel investors themselves and join the angel networks.
When angels get involved with crowdfunding platforms, they take a proactive step toward growing the angel network globally.
Where will you find your next angel from the crowd?
