Feature
Issue No. 37 - October/November 2007
Angel group ready to take risks
Business investors ganging up to make ‘angel groups’ are the coming thing in high-risk, IP-driven sectors, a Venture Capital Board gathering has heard.
Former GroPep CEO, John Ballard, now manager of the BioAngels investment group, said the
trend began in the US, where angel groups of
10 to 50 investors often operate through a
not-for-profit legal structure with a manager or
steering committee.
Members of angel groups invest their personal funds in early stage, IP-driven companies and John says Australian facilities may include self-managed super funds.
Angel groups also provide pro bono mentoring support to investees and, logically, a group has more diverse competence than individual investors. Individuals in angel groups maintain several small investments, sharing and spreading risk. John calculates the return on investment averages five times.
In the US, angel groups rarely invest outside IP-driven areas such as biotech and IT, but in these they have largely replaced venture capitalists or share issues for seed-stage investments.
Australia’s angel community isn’t clearly defined ¬but there are three formal angel groups, in Brisbane, Canberra and BioAngels in Adelaide.
Unlike the US and UK, Australia offers no tax incentives for individual seed investors, although there are tax breaks for VCs. John says the new Early Stage Venture Capital Limited Partnerships Program, which waives in...
