Saturday, 28 March 2020

Business Angels and Investors need to step up, not run for the hills!!

Covid 19 is hitting all of us really hard. On many levels we are in a period of uncertainty. While we struggle with supermarket shopping or going for walks in our favourite locations, the (dare I say it) tsunami of distress is yet to come in countries that can barely afford regular health care. The projections from Imperial University of possible deaths in the region of 40 million on current trends and with no mechanisms to halt the spread of Covid 19 are scary to say the least.

Governments can do what they can do. In the end they are slowed by their procedures, political posturing and various bottlenecks.

So, is it time for investors and business angels, perhaps with philanthropic organisations and individuals to step up and provide the resources and inspiration to make a difference – at speed?

From what I have seen and heard recently; investors have run for the hills. They have discounted valuation on new investment opportunities because all they can see is risk. Fair enough – but they are not in as much trouble as the average homeless person. Come on, guys show us that empathy and a long view is possible and that at a time like this we can show some vision. Some VCs and Business Angels may well have stepped out on to the streets and clapped and cheered for the NHS. How about giving us a reason to clap and cheer for you?

I could make this a really long and reasoned blog (or rant) but let us stick to some basics for UK for now and make it wider for other countries.

How about – as part of fiscal reforms the HMRC looks at making SEIS and EIS even more attractive for Business Angels. Sharing risks a bit with them. Afterall for many it could be their pensions we are asking them to risk.

And how about Business Angel groups coming together to raise a single fund to address the needs of Covid 19. These could be with diagnostics, ventilators, social enterprises and physical infrastructure. And not just for UK needs – but look more widely at global requirements.

But here is the thing guys – let us set IRRs and terms and conditions that look more like grants than they do for mythical Unicorn returns.

How about setting a modest target of £100m to call for 10 – 15 potentially breakthrough innovations in cracking the Corona Virus.  There is an entire community of scientists and researchers who have potential solutions and nowhere to turn.

Let us see some leadership – not so much running for the hills as stepping up to the plate.

No comments: