Business Angel Networks in focus at experience meeting in Stockholm

To wind up an eventful spring season the business angels’ networks in Sweden met at the end of June for a day of exchange of experience in Stockholm. Close on 30 people, representing 17 networks from north to south, were present during the day, which was characterized by dialogue and transfer of knowledge.

During her opening speech, Maria Nilsson, in charge of business angels at SVCA, established that a clear positive trend in the business angel activities can be perceived. Investment volumes in the networks increased by 28 per cent last year and the number of angels investing also increased considerably. The networks work actively to professionalize their processes, although the majority has very scarce resources at its disposal.
– It is nice to see that the number of new networks is increasing and that the forms for running the networks become more varied. Business angels today have an obvious role in the innovation system as well as in the financing value chain, Maria Nilsson said.

Cecilia Hertz, founder and MD of the space design company Umbilical Design, then took over with private investor Lars Fossum and related Umbilical’s exciting journey from idea to a real company. Cecilia as well as highlighted the importance of personal chemistry between them in a co-operation that has so far been very rewarding.

Questions like how to get increased deal flow to the networks, how to increase the willingness of the members to take on the leading role in investments and the possibility to formalize the activities of the networks through forming funds were then discussed under two parallel exchanges of experience.

The participants could then take part in a workshop led by lawyers from Setterwalls. The importance of the complicated 3:12 rules for business angels were dealt with, as well as pros and cons for business angels to use preferential shares in their investments.

After lunch a discussion followed with Jan Nylander, deputy MD of Innovationsbron, under the guidance of Pär Hedberg, MD of Stockholm Innovation & Growth. Jan gave an introduction to the business of Innovationsbron and then asked the participants to give their view of how Innovationsbron could contribute to increased business angel investments. Closer co-operation between Innovationsbron and the business angel networks and launching funds were some of the suggestions discussed.

It was then time for the international guest of the day: Mr. David S. Rose, founder and chairman of the New York Angels. David showed impressive figures for business angel investments in the US and compared them with activities on the formal venture capital market. In 2005 the angels invested about USD 23 billion in 49,500 companies in early growth phases at the same time as the VC companies invested about USD 22 billion in 3,000 ventures. These figures tell a great deal of the important role the business angels are playing for financing recently started companies. David also told the story behind Angelsoft, the company he has founded, which today provides business angel networks world-wide with a tool that facilitates the administration and the investment activities of the networks.

Finally the participants were informed of two different ways of structuring business angel activities, when Leila Swärd, founder of the business angel fund Theia and Pontus Ottosson, MD of the business angel network Partners för Utvecklingsinvesteringar i Life Sciences, gave an introduction to their networks. Leila as well as Pontus observed that their respective set up works well as a platform for syndication and exchange of experience.

Nicholas Jacobsson, head of Connect Skåne’s business angel network, summarized the impressions of the day:
– It is important to us as operators of the business angel networks to meet now and then to exchange experiences and to discuss co-operation opportunities. In order to give the entrepreneurs who are part of our process the best condition to have financing, we must work actively to increase the investment willingness and professionalism of the business angels. A day like this is a part of that endeavour.

The event was carried out in co-operation with Setterwalls.