Not surprisingly, most business-angel networks outside the U.K. are of very recent creation. It's a question of culture. The practice started in the U.S. and then moved to the U.K. Continental companies aren't so willing to open up to third parties. Angels either act on their own or as part of an informal syndicate. Take the case of Norman Price, who as a physicist and former executive at British Steel PLC and Triplex Lloyd decided to invest in Bede Scientific Ltd., a Durham, England-based producer of laboratory instruments that developed new technology for analyzing the composition of materials.
Angels fill that gap at the bottom end of the market.
And many small firms prefer angels to larger investors, because there's less risk of losing management control. That was Toby Cardew's main concern when he began to search for someone to finance a new vacuum-based holding device for woodworkers. Venture capitalists had offered to finance the project, but he was afraid they'd wrest control of his company, M.Power Ltd., if their objectives weren't met. Mr. Cardew finally hooked up with business angel Martin Crowe, who brought 15,000 pounds as well as marketing experience to the project. Individual angel investments range anywhere from 10,000 pounds to 250,000 pounds, although most angels invest less than 50,000 pounds, according to NBAN, a network that was created in February by the Corporation of London, together with a group of leading accountants and Barclays, HSBC, Lloyds TSB, the Royal Bank of Scotland and NatWest.