SWAIN success continues despite recession
06 November 2009
On Tuesday 3rd November, SWAIN (South West Angel and Investor Network) celebrated their 5 year birthday with a drinks and canapés event at Merchant House, Clifton. The historic and beautiful building, which is home to some of Bristol’s finest Entrepreneurs, was the perfect setting to celebrate business deal making in the South West. The event was well received and attended by key business figures from the community. The prize for the best Entrepreneur and Investor partnership was awarded to Fertility Focus. Fertility Focus develops and markets products for diagnosing and treating infertility and has succeeded in raising £2.6 million, £614,000 from SWAIN members. Amongst the other companies shortlisted included Green CO2 who has recently floated on AIM and Atlas Genetics.
SWAIN was originally set up by South West Regional Development Agency (SWRDA) to bridge the funding gap for business looking for finance between £25k to £750k, by introducing high growth businesses to business investors otherwise known as business angels. Since then SWAIN has exceeded expectations, helping 58 companies to complete 78 deals. A total of £23 million has been raised from these deals, of which £5.5 million was from SWAIN investors, and approximately 410 jobs have been generated. Funding has been raised in a huge variety of companies from a university spin-out that supplies the defence industry and a high-tech fertility device marker working on temperature through to an eco construction company and a company that integrates control systems which regulates energy from a variety of renewable sources and facilitates the resale of the energy to the national grid.
SWAIN and indeed all Angel investors are vitally important for small businesses to grow quickly especially as banks are still not lending aggressively and three of the leading Venture Capital Funds based in the South West have no more cash for first round investments. Angel investing is high gains but also high risk with a typical failure rate (according to a recent NESTA report) of just over 30%. So far SWAIN is bucking the trend with a failure rate of just 21%. The average stake an angel takes in a business is approximately 18.5% with a typical valuation of less than £1,000,000.
SWAIN has seen a surge in the numbers of potential angels contacting SWAIN over the last few months interested in other avenues for their capital. Reasons for this include poor returns elsewhere and a change in the quality of current opportunities being put forward with more mature and profitable businesses looking for finance. The governmental scheme of EIS relief also remains attractive.
Philip Tellwright, Managing Director of SWAIN said, “I am optimistic for the future. The deals have been down by about a third over the last twelve month but business is improving. We recently closed two more deals and have a few more that are very close to completion. This event was our opportunity to say thank you to all of the investors, companies and members of the business community without whose support, SWAIN would not exist. I look forward to the next 5 years.”