By Erikka Askeland
A SCOTTISH business angel syndicate has started its tenth year having leveraged a record amount of investment in early-stage companies.
Equity Gap, founded in 2010, said its portfolio companies raised
£21.5 million from partners and co-investors in 2019. This was on the back of £3.6m invested directly by Equity Gap members, according to its annual investment report. This figure included investment in five new companies, including compliance software firm Amiqus Resolution; home security firm Boundary; and aviation medical emergency technology provider MIME Technologies. The company also chipped in to 23 follow-on investments including four that took more than £1m. These included fintech lending specialist LendingCrowd and remote-sensoring technology
company Synaptec.
The amount invested by Equity Gap syndicate members was down on the £5m invested in 2018. But Jock Millican, director of Equity Gap and chairman of the LINC Scotland angel capital association, said the scale of investment was “evidence a positive funding environment” in Scotland. He said: “Investing £3.6m during 2019 came on the back of a record year in 2018. Our successful co-investment partnerships with other business angel syndicates and support from the Scottish Investment Bank, continue to evidence a positive funding environment, and the availability of capital for scale-up opportunities across a wide range of sectors
in Scotland.” Most of these companies simply would not get funding without the support of the business angel community. The funds raised have given our portfolio companies the ability to grow, create quality employment opportunities, especially for graduates, and build prosperity across the wider Scottish economy.”
He added: “Even those companies that complete a successful exit tend to maintain their operations here.”
Fraser Lusty, Equity Gap director, said the syndicate – yet to achieve an exit on its portfolio companies – was looking for private equity and other investors to “bring forward the right
exit deals”.
He added: “This in turn has invigorated our desire to build stronger cross-border relationships with venture capital and M&A specialists.”
The group said the number of investor members is consistent at 150-200, although it has attracted some foreign investors from Germany and expats in the US. The company added that it continues to work with LINC Scotland, UK Business Angels Association and Women’s Enterprise Scotland to encourage “wider participation in
angel investment”.
Mr Lusty said: “It is important to us to continually to look at ways in which we can more effectively interact with and attract a more diverse investor base. This year, on the back of our UK Business Angels Association most active regional investor award, we have been fortunate to see good organic investor growth from a variety of new geographies, including Germany, USA and Australia.”
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