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£150 million funding for Dragon’s Den-style ‘angel investors’ to help level up opportunities for small businesses

Rishi Sunak Thinking

Plans to level up the country are set to get a boost in the budget with help for budding entrepreneurs to set up businesses outside of London and the South East. 

  • £150 million funding for regional ‘angel investors’ expected in budget as part of plan to level up the country
  • Will help small businesses outside of London get access to the early funding they need to get off the ground and grow
  • Over 200 businesses have already benefitted from the British Business Bank scheme

It is expected that the Chancellor will announce a £150 million pot of funding for the British Business Bank to encourage the development of regional networks of Dragon’s Den-style ‘angel investors’ to help make people’s dreams of starting a business a reality.

This is part of the government’s plan to level up across the country by helping small businesses get access to the early funding they need to get off the ground and grow.

Innovative start-ups in the regions often fail to get the funding they need to grow due to a lack of specialist investor networks in their areas.

Chancellor of the Exchequer, Rishi Sunak said:

“As we level up the country it’s vital that we harness the skills and talents of everyone, not just those who live in London and the South East.

“Small businesses are the lifeblood of our towns and cities up and down the UK, but all too often those based in the regions miss out on the backing of the investors they need. This extra funding will help budding entrepreneurs and develop networks of angel investors across the UK.”

Run by the British Business Bank, the Regional Angels Programme helps to reduce regional imbalances in access to early stage funding. The programme works alongside financial backers to build these investor networks and increase the funding available for budding entrepreneurs and their business ideas.  

As of June 2021, over 200 businesses have already benefitted from the scheme, with top sectors being technology, life and health sciences and manufacturing. 85% of investments have gone to companies outside of London, including 37% of investments to companies in Scotland, Wales & Northern Ireland.

The funding due to be announced at the Budget more than doubles the £100 million previously announced.

The Regional Angels Programme was set up in 2019 following the government’s Patient Capital Review to support the early-stage equity ecosystem outside of London. It operates UK-wide by developing clusters of angel investors and makes commitments of £5m-£15m alongside early stage investment funds and angel groups who, in turn, invest into seed and early stage businesses. This then acts as a catalyst for more investors to back regional businesses.

Brent Hoberman, Founders Forum, Founders Factory, firstminute capital Co-Founder and Executive Chairman said:

“It’s great to see more regional support for start-ups – this approach should see further amplification of quality angel investors backing select regional start-ups. Entrepreneurship across the UK should be a national movement across all regions.”

Romi Savova, Founder and CEO of PensionBee said:

“It is excellent to see further support and incentives to fund and grow exciting British start-ups around the country. With a substantial proportion of our own workforce and customer base distributed around Britain, at PensionBee we know that talent is spread widely, yet funding for innovative ideas is not. This additional funding will act as a caffeine shot for underrepresented founders across our regions and diverse communities, helping them to play a key role in growing our economy for the benefit of all.”

Suren Thiru, Head of Economics at the British Chambers of Commerce said:

“Improving the quality and reach of early-stage finance is crucial for levelling up economic opportunity across all nations and regions of the UK. We are therefore pleased that the Chancellor listened to our call to support the British Business Bank’s Regional Angels Programme. The funding will help ensure some of our most promising young companies across the UK get access to the finance they need to support their growth journey. Ministers must continue to ensure that the programme has sufficient funding capacity to meet any future surge in demand.”

Kitty Ussher, Chief Economist of the Institute of Directors said:

“With 85% of our members being company directors based outside London and typically running small and medium sized firms, we strongly welcome this additional commitment to providing more early-stage equity finance to get great business ideas up and running across the UK. No entrepreneur should be denied a helping hand to get started simply by virtue of where they live.”

Irene Graham OBE, CEO of the ScaleUp Institute said:

“Angel capital is a critical enabler to scaleup growth but the depth of angel capacity at regional level, as our recent research has shown, is both inconsistent and insufficient. We therefore welcome this further injection of funding to the Regional Angel Programme run by the British Business Bank which has had impact and should enable it to evolve further to meet the ongoing demands of scaling businesses working with our vital angel investor community.”

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