As the year comes to an end, let’s review some of the best articles – and your favourite pages on ibusinessangel in 2012 and let’s see what 2013 has in store for us…
If 2012 was the year that Crowdfunding finally took off – at least in terms of growth and interest in crowdfunding websites – then 2013 will be the year when it comes of age. The UK already has equity crowdfunding (instead of just donation funding) sites and one site alone has raised over £4m of startup capital. 2013 will see the explosion of crowdfunding not just in the UK, but also in the US where the JOBS act will pass into law; plus additional and exciting developments to come from many western markets – such as Italy which passed its Digital Agenda Package at the end of 2012.
Almost as exciting as crowdfunding sources of finance, are the startup accelerators. In some ways, accelerators are well past their launch phase with some accelerators succeeding hugely and others slowly or quickly failing. The big development in 2012 was the launch of Steve Blank’s online university Lean Launch Pad – a sort of online, free, startup accelerator. 2013 will see a bit of a shake out in this sector and then huge growth amongst the 10 to 20% of successful accelerator ventures.
Steve Blank’s emphasis on education makes sense in a field that is both new and full of jargon. Our own attempt to convert startups into one of 6 stages – to help entrepreneurs understand both what they have achieved and business angels to demonstrate what the entrepreneurs are yet to achieve – are critical if the two parties are to reach sensible and meaningful estimates of equity value. No wonder then, that this topic was one of the hottest for 2012.
That our members are interested in funding is no surprise. Hence, this page remains a favourite and will continue to do so in 2013.
Business Angel Tax Breaks
The big tax innovation for business angels took place in the UK, where the Seed Enterprise Investment Scheme offered UK tax payers a rebate of 50% of the money they invest in SEIS qualifying companies against tax owed or paid. In fact, for 2012, this was increased to 78% if the tax payable was capital gains. However, the end of 2012 saw other countries begin to offer tax breaks to encourage early stage investment – with Italy creating a 19% tax break. Expect more countries to follow suit in 2013.
How to value a startup
The perennial question of ‘what is a startup worth’ kept cropping up in 2012. Dave Berkus’ assessment for pre-revenue companies is particularly useful – no least in that it encourages entrepreneurs to demonstrate at least some revenue so that they can use a more preferential valuation method. The techniques in this area are both important and in their infancy and we will be seeking to develop and report on better tools in the coming year. Solving this issue – or at least coming to some shared understandings between startup entrepreneurs and business angels will be critical if equity crowdfunding is to take off in 2013 as predicted.
5 Reasons Crowdfunding is great for business angels
Ah! Crowdfunding is cropping up again in this article. Crowdfunding – especially equity crowdfunding – has to work against the perception that it is the ‘last chance salon’ for entrepreneurs who couldn’t get funding from VCs or traditional business angel networks. To do this, we have to demonstrate real value to the business angels in investing in crowdfunding opportunities. Clearly, this involves getting the valuation right – for both parties.
How to raise $10m on kickstarter
The great story of 2012 was how Pebble Watch raised $10m on Kickstarter – without even giving any equity away! We expect 2013 to bring some more great – and news worth – stories of funding from Crowdfunding in 2013 – but we are still a year or two away from being to able claim any bankable investments.
Advice for business angels on how to pick the best investments also made the top slot. And guess what? Yes, the management team is the most important factor – by a long way. This is still news for most entrepreneurs who lead with their product and will no doubt remain news in 2013 – but smart entrepreneurs who want funding will recognise this.
Of course, knowing who the world’s top Angel Investors are is pretty important too – and that’s why our list of the top 21 remains a most popular page. We’ll be bringing you more investors in 2013 and more interviews with top angels.
Last but least, reviews of crowdfunding investment and donation funding opportunities proved popular. Yes, we’ll be bringing you more of these in 2013.