Bio Angel network to take off across UK

THE BioIndustry Association is planning a UK-wide 'Bio Angel' network to attract more private investment to start-up firms.

Barbara Blaney, Scotland director for the BioIndustry Association, said the trade body hopes to encourage more business angels to invest in early stage projects after a decline in the number of venture capitalists willing to take on riskier start-up companies.

Since the start of the economic downturn, the association reports a marked shift towards investors committing funds at the later, less risky stages. These investments tend to be larger, multi-million-pound deals, but frequently do not offer as high potential returns as start-up deals.

This trend has led to many early stage companies having to shoulder initial costs whereas previously venture capital contribution could often be relied on.

The association argues that despite the credit crunch, there are lots of solid investment opportunities in the sector, and it is hoped the new angel network will open investors' eyes to possibilities.

Blaney said: "Strangely enough, we'd say the current markets are very encouraging. But what we are seeing is a very different, risk-averse approach, perhaps due to the current (economic climate]."



The latest figures from the Centre for Management Buy-out Research at Nottingham University show that the number of UK buy-out deals fell to a 15-year low in the first six months of this year.

But, according to Calum Paterson, managing partner at Scottish Equity Partners, the venture capital firm, there are still plenty of good investment opportunities at the smaller end of the market, particularly in the technology sector.

"I don't think it (the outlook] is bleak at all. To some extent, the market has found its equilibrium."