DSW Ventures became the first partner in British Business Investments’ Regional Angels Programme a year ago – elevating our investment capability and reach.

This post looks at how the Programme is working for DSW Ventures, and the progress we’ve made in delivering more capital and support to regional scale-ups.

DSW Ventures

The Regional Angels Programme and DSW Ventures

British Business Investments’ £100m Regional Angels Programme – https://www.bbinv.co.uk/regional-angels-programme/ – helps reduce regional imbalances in access to early stage equity finance for smaller businesses across the UK, because it plays an important role in funding businesses with growth ambitions. The programme aims to increase the availability, supply and awareness of angel and other early-stage equity investments across the country, particularly in areas where this type of finance is less readily available.

DSW Ventures was the first partner appointed after the Programme was launched with a commitment of £10 million.

British Business Investments has committed to co-invest alongside DSW Ventures’ investors in any qualifying investment made through the programme and operates on a hands-off basis in both making and managing the individual investments.

 

So how has the first year gone?

We have now invested £1.5m through DSW Ventures since our appointment: a combination of private investor money and matched funding from British Business Investments. In addition, we leveraged in £730,000 of third-party funding to support these companies.

The rate of investment is heating up, despite Covid-19. Our small team was increased at the same time that we became part of the Regional Angels Programme when we hired Ellie Boardman. In Q2 this year we also hired an intern from Manchester Business School to support our outreach programme to scale-up businesses. We have invested a huge amount of time developing a better digital presence. These efforts have been worthwhile. Our flow of opportunities has pretty much doubled in the last year and we now see over 100 opportunities a month, with a steadily expanding pipeline of feasible investments.

Investment highlights include One Utility Bill, a fabulous business based in Newcastle run by two inspired founder-directors. Technically and commercially superb, they are changing the way that household utilities are provided. We led the round, supported by British Business Investments, and co-invested with leading North East venture investors, NorthStar Ventures. We completed the investment on lockdown Monday in March this year, after careful deliberation, and the management team have not let us down.

Another highlight, also in the midst of lockdown, was the £500k investment into The Insights People. Again, we backed an inspired and talented founder, supported by an excellent team who, from an office in Manchester, are feeding market insights into some of the world’s biggest brands on a global basis. And again, the management team have not let us down.

 

Building a working partnership with British Business Investments

It was a great help in the early days that DSW Ventures was part of the DSW Group. This gave us existing administrative and compliance support and FCA authorisation so that we were already in great shape to sign up to the programme.

The Regional Angels Programme team at British Business Investments have been terrific partners, both in setting up our participation in the Programme and since on an ongoing basis. They’ve been practical, commercial, and entirely approachable.

They allow us to run the investments on a day-to-day basis entirely autonomously but stay in touch every few months to monitor progress and discuss our plans for new investments.

The reporting and investment monitoring processes have been well thought through and are very slick. The team at British Business Investments monitor a small number of important key performance indicators, so the administration of our participation in the Programme has been highly efficient.

When we need their support, the British Business Investments team has been excellent. In response to possible investor uncertainty caused by the Covid-19 lockdown in March, we discussed temporarily increasing the rate of co-investment. They processed the request positively, quickly and efficiently and we had revised legal agreements signed soon after.

 

What have the benefits been for DSW Venture since joining the Regional Angels Programme as a delivery partner?

The Regional Angels Programme has been helpful to DSW Ventures in several ways.

Importantly, we can now take on larger investments with absolute confidence (One Utility Bill, with £1.7m of total funding, is our largest to date) due to the level of committed capital from the Programme / British Business Investments. This means we can close not just more investments, but bigger rounds as well.

The relationship with British Business Investments through the Programme is not a formal endorsement, but it helps with our credibility with potential investees, angels, as well as within the professional advisory community, and will no doubt have helped increase the flow of new opportunities over the last twelve months. The British Business Investments due diligence process into our business during the application also significantly helped us in refining our investor proposition.

Lastly, British Business Investments has been supportive in helping us establish new connections and creating additional deal flow outside our hinterland in the North of England, and we have seen a massive increase in the deal flow from other UK regions.

 

Round-up

Our participation as a delivery partner in the Regional Angels Programme over the last year has been a great experience for us and has produced some fabulous investments. We would like to see our pace of investments increase and have put in all the work necessary to deliver that flow of quality investment opportunities for our investors.

We’re looking forward very positively to the next few years co-investing with British Business Investments.

 

David Smith

Partner, DSW Ventures

 

Find out more about British Business Investments’ Regional Angels Programme here.