Just how can the North East start receiving more angel investment?
According to new data, the majority of angel investment is being granted to London and the South East of England.
Startups and SMEs across the North East are feeling the pinch, especially as funding is becoming increasingly low amongst new businesses in the region.
Only five per cent of the region is said to receive angel investment, meaning it is the lowest in the UK. The North West and the Midlands are said to get just eight per cent each, too, which can only mean one thing…
London still reigns supreme, with 70 per cent of investment being pumped into the capital’s up-and-coming businesses. And yes, we shouldn’t grumble at this because every little bit helps our economy.
But, when are the North East’s own startups going to receive the time and money they deserve?
I spoke to Jenny Tooth, CEO of UKBAA, to understand more of this matter. Just where is it going wrong for the North East? What can be done to tackle the issue?
She said: “Angel investment in the North East used to have a lot of funding. But in 2011, [a lot of investors became private], many disappeared and businesses/entrepreneurs are now dependant on public money.
“They became dependant on private sectors. Because they are privately run, they aren’t that visible.”
Sounds like a vicious circle, no? Cuts seem to be happening all the time, so where - and how - are local entrepreneurs going to find investment? It seems more needs to be done for the North East’s ecosystem.
Jenny argues that the money and help is already in place for our entrepreneurs, and many investors are willing to back them. However, it’s definitely the “lack in connections” that is holding us back.
She added: “There’s a lack of information and support. They wouldn’t know who to ask.
“The UKBAA is hopefully opening an Angel Hub in Newcastle to provide a focal point on how to do angel investment. We’re helping entrepreneurs to be investment-ready, how to pitch and present effectively…”
But what do you think? Do you think North East entrepreneurs need more funding, or is it simply us not knowing who to pitch our ideas to? Personally, I see it as a combination of both.
Let’s be honest, London is always going to thrive above every other major city and town in the UK, but that doesn’t mean the smaller regions can’t fight for their chance to be heard.
The North East has so much potential that it’s truly sad to see it only receives five per cent of angel investment.
We still have a long way to go in making it a more accessible area, but is it time we started getting ourselves out there and pitching to more people who are willing to invest?
Let us know your thoughts. Tweet us @BdailyNorthEast.