www.glasgowchamberofcommerce.com 29


Glasgow angels with no fear to invest


T


he sale of Clyde Space and Barrhead Travel in early 2018 raised eyebrows and a few concerns about the loss of


successful Glasgow companies. Yet the acquisition of the cube satellite company to AAC Microtec of Sweden for £25 million in cash and shares brings with it wider investment opportunities. The Clyde Space deal will create a company with more than 100 employees and growing revenues as it gives founder Craig Clark and two investor groups a 49 per cent stake in the Swedish firm. Barrhead Travel, set up in 1975 by Bill Munro, has grown to become a network of 70 travel agencies with 900 staff and a turnover of £279 million. It has been bought by US travel giants Travel Leaders Group for an undisclosed sum and no major changes are anticipated. Acquisitions such as these mean that there is an opportunity for those with surplus cash to invest in local enterprises as angel investors. David Grahame, Director of Glasgow-based LINC Scotland – an association that represents angel investment groups in Scotland – says this is a good bet that can sustain Glasgow. “Despite the uncertainty over things such as Brexit, 2017 was a record year in Scotland for angel investors. Increasingly, business owners who have sold their businesses are looking at becoming angel investors, partly because the tax incentives remain extremely favourable. There is also high demand from early- stage technology-based companies looking for backing,” he said. There are 21 angel syndicates in LINC Scotland with more than 1,300 angels. This equates to more than £400-500 million invested in the market place, and last year a further £50 million was added. However, this is not about quick returns. It is a long cycle of ‘patient investment’, with nine years the average time for a good exit. The most common way of supporting an early-stage, pre-revenue


company is with equity, which can involve either an angel investor or a venture capitalist, which is usually a higher amount. “Nearly every deal that our member angels back is with firms that have some kind of proprietary intellectual property,” said Mr Grahame. There has been a divide between Edinburgh and Glasgow, with the capital’s angel investment community more active. But David Grahame says the situation in Glasgow is growing with three main groups. The most visible angel community is Kelvin Capital, founded in 2009, and supporting ‘globally ambitious’ companies. The syndicate was founded by John McNicol and has a total of £19 million invested in 22 portfolio


It’s a city where


businesses,


large and small, should be thriving”


companies, while another investor, Barwell plc, is a private individual’s office owned by Viscount Gough. It does not have a public presence. The newest Glasgow syndicate is Gabriel Investments, based at the Strathclyde University Incubator, where Gillian MacAuley, Director and gatekeeper, has pulled together an angel group to support companies in the incubator. Most angels want to offer their business expertise to help emerging companies, which means it is very localised and it is not passive investment, but active involvement. “We get people from outside


Scotland occasionally asking for us to invest in their companies. We have to say that while we’re not parochial, most of our members invest in Scotland


simply because it has to be near enough so people can get involved,” said Mr Grahame. Councillor David MacDonald, Depute Leader of Glasgow City Council, sees the recycling of wealth as important for the city. “We’re keen that where there is a buy-out that jobs and research and investment remain in the city. We want people to stay here and build on the successes of their achievements in Glasgow. We are a city with one of the most highly educated workforces in the UK. It’s a city where businesses, large and small, should be thriving.”


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