STARTUPS and small firms are missing out on potential investment due to misconceptions over who can become a business angel, research claims.
Analysis by the UK Business Angels Association (UKBAA) found that 75 per cent of business angels were aged 45 or over with a fifth over 65, while younger generations feel there is a gender and ethnicity imbalance.
More than a third (37 per cent) of 18-34-year-old respondents – compared with 11 per cent of over-55s – claimed it is easier for a man to become an angel investor.
A quarter of those 18-34-year olds who formed part of an ethnic minority did not feel they “fitted into the profile” of an angel investor, compared with just five per cent of over-55s and 21 per cent of over-65s.
The UKBAA has launched an e-learning programme to raise awareness and counter misconceptions so investors of all ages, genders and ethnicity can support local startups and small businesses as business angels.
“As the trade body for angel investing across the UK, we want to help many more people to use their spare financial capacity and business experience to become angel investors,” Jenny Tooth, chief executive of the UKBAA, said.
“Yet we know that the angel investing process can seem difficult to understand, or to know how to make the right investment decisions, or how to mitigate the risks.
“So we have brought together the insights and expertise of a diverse group of 22 experienced angels from across the UK, combined with latest technical details on the angel process, delivered through an easy to use online learning experience.”
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