MBM Commercial reflect on the UKBAA Winter Investment Events 2014

Kenny Mumford and I recently attended two UK Business Angels Association events in London – the Winter Networking Dinner and Winter Investment Forum the following day. We both came away from these gatherings with a spring in our step due to the extremely positive feelings emanating from the speeches and the conversations we had with numerous attendees at these two events. The UK’s angel community has experienced some tough times (like the rest of the economy) so it was encouraging to experience such confident vibes, backed up by recent improved economic data for the UK economy.

Luke Johnson from the Centre for Entrepreneurs spoke glowingly about all the positive aspects of the trading in the UK, giving a welcome reminder that we have great entrepreneurial and business angel cultures in the UK which are vital to the UK economy. The mood at the dinner was certainly upbeat.

The encouraging mood of the proceedings continued and at the Forum the overriding opinion of all speakers (with one exception) were that the future is bright in the UK. There are fantastic opportunities for angels and venture capitalists to invest and make handsome returns. It was great to hear from some of the UK’s leading angel investors about their experiences in recent years and also their buoyant outlook. As we all know, the UK and world economies have experienced a bumpy ride over the past few years and this has been exacerbated by the problems in the banking sector, which has traditionally financed expansions. However, it is clear that business angels and venture capitalist have to a large extent filled the gap and are keen to back British business and drive forward the economic recovery. Clearly, the investors want (and need!) exit and returns and it is clear that there have been significant exits to date with more in the pipeline. The UK entrepreneurial market is very fertile which will continue to help growth in the UK economy.

Simon Walker, Director General of the Institute of Directors, gave an interesting insight into the impact of the UK’s current tax regime. In his opinion any increase to income tax is not welcome as it does not reward successful entrepreneurs and likened it to the taxes on cigarettes, alcohol and airlines – these are designed to make us use them less and the same applies to income tax in that it makes people want to work less. He also stated that entrepreneurial relief is too limited and should be broadened to reinforce the UK’s entrepreneurial spirit. The UK needs to be a safe and attractive place in which people can invest. He also wants to see the rationalisation of NIC, PAYE and Corporation Tax. Simon also spoke about the interesting concept of “acqui-hiring” whereby companies bought not to buy its products or technology but to access to the high quality staff and business culture. In today’ world the concept that people make the company is still alive.

As stated at the start of this UKBAA Blog, the delegates and speakers created a wonderfully confident and encouraging atmosphere to start 2014 and, despite the very apparent difficulties which face UK businesses, 2014 promises to be a year of huge opportunities. We at MBM Commercial see many of our clients working hard to seize these opportunities and we look forward joining them in the ride.

We are born optimists however and Nelson Gray did challenge the conference with a bit of a reality check. He was not particularly convinced that good investments and exits were getting any easier to come by, noting that there are more giant pandas in Scotland than VCs! I’d be interested to know other peoples’ views. Are things improving for investors or is it business as usual?

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