What's happened to angel investing in Europe during Covid-19 ?
Venture capital investment into European startups is slowing down. VCs are still making investments — and telling everyone who will listen on Twitter that this is the case — but fewer, and for less capital, than before. Funding rounds in Europe dropped by 22% in March, according to Dealroom, and valuations are down by 10-40%. But what’s going on with the somewhat less vocal angel investors? Have they closed their cheque books — or are they seizing the opportunity to get in on some good deals?
“We’ve seen some decrease in investing, but it has not been terrible,” says Luigi Amati, president of Business Angels Europe, which represents more than 40,000 angels across Europe. Some angels, like VCs, are focusing on helping out existing their portfolio rather than looking for new investments; some ‘tourist’ angels have disappeared; but many more are actively investing.
It matters where angels are based: startup and investor support measures vary between countries, with some more angel-friendly than others. As a result, some angel groups are as active as they were before the crisis, and seeing increased deal flow even as others — notably in the UK — have seen many angels fly the nest.
The angels who haven’t vanished are spending more time looking at investments
Business angel clubs are reporting higher than usual attendance at pitch events, now that they’re taking place online.
“Paradoxically, members are more available. We’ve had two monthly meetings now where startups pitch via Zoom, and attendance is significantly higher than in the usual pitch plus cocktail format,” says Elizabeth Pauchet, member of FBA (Femmes Business Angels).
“We witness quite some enthusiasm for our monthly startup pitches, which we organise online for the moment,” says Munck at Be Angels. “We have much more participation than at our physical events.”
Angels are also moving quickly, in some cases. “Due diligence and deal execution are quicker; many people have been able to carve out more time to focus on their business angel activity (which is a side interest for the vast majority of our network’s members),” says Elizabeth Pauchet.
By Amy Lewin, “What’s happened to angel investing in Europe during Covid-19 ?”, Sifted, Thursday 21 May 2020