Europe praises best practice and announces
the great potential of business angels

Joan Carles Martines, an entrepreneur who created Inspecta SL, a Spanish company selling IT programs to control wine bottle corks, intends to finish 2007 with sales worth one million euros. After two failed attempts at finding an investor for the project, Martines met the right person, Pere Font. “We wanted someone with manufacturing experience, someone who could understand our business concept, the risk involved and the market time. Also someone with the financial capacity to help us”, explained Joan Carles Martines at the 7 th European Business Angels Network (EBAN) Congress. They both realised straight away there was an empathy connecting them, and the business was facilitated. “We were quick to come to an agreement because I easily found the elements I like in an investment: people and commitment”, revealed Pere Font, an investor who in 2004 joined a business angels network in Catalonia after having worked for 25 years as a financial director at a company producing metallic pieces for the car industry. “I realised this was the project of their lives, they left behind their jobs and dedicated a lot of family time and money to it.” And that dedication is extremely important for the success of the business”, declares Pere Font.

Information and communication is the key

A decision to increase the speed of development of business angels’ activity was taken by France last year, after realising the high potential of their investors. “But how can we speed up the movement?” was the question posed by the French business angels, according to Claude Rameau, from France Angels. The solution was eventually found with the organisation of a great promotion event for the activity, repeated in five cities. “We mobilised the press and some regional television stations. We attracted about 9,000 people to these meetings. Information and communication is the key to this kind of promotion. Today, we have 4,000 business angels in France and we want to reach 10,000 by 2009”, announced Claude Rameau.

Eastern Potential

“Although business angels in Germany are currently living a good moment, their potential has not been completely explored yet”, revealed Ute Günther, from the German business angels network. “There is a lack of good tax conditions, greater cooperation between business angels and venture capital investors, and market transparency”, diagnosed the representative of the German club. Ute Günther believes that the business angels’ networks need public funds to develop their activity, and for that to happen “we still need to convince public authorities to support business angels’ networks”, she states.

An additional 2,000% available

If the investment in start-ups in Europe has been increasing, the investment in seed capital has decreased by 34% in 2005, when Europe had an investment of €97 million for this stage of enterprise financing. “It is obvious that more seed capital is needed. It is estimated that an additional 300 to 2,000% of what is invested is available”, revealed the Italian Luigi Amati, representative of Meta Group. Luigi Amati believes that the big venture capitalists have neglected the seed capital funds, but recognised that the entry of new Member States to the European Union will stimulate the creation of more seed capital funds. “Cooperation between business angels and the seed capital funds generally occurs in an informal and incidental manner, starting from individual initiatives, not from organised business angels' networks. The industry is not mature”, explains the Italian representative, to whom “a joint venture between business angels and seed capital funds would be beneficial in operational terms, because it would provide more knowledge, liquidity and professionalisation".