Angel investing takes off

Still wondering what to do with your lump-sum or seeking a slightly more active retirement, then angel investing could be for you

INSPIRED BY Dublin’s recent Web Summit? Looking to get in on the action of a start-up but reluctant to get involved in the day-to-day grind of a young company? If so, angel investing might be for you – and if you’re over 50 with a lump-sum or retirement package to invest you can now avail of targeted seminars to learn the tricks of the trade.

Historically, the rate of informal investing has been low in Ireland, with a recent report revealing that just 3.2 per cent of Irish adults said that they had invested in a new business started by someone else between 2008 and 2011. But, as investors seek out new investments away from property and the stock market, investing in smaller and growing companies has come to the fore. Indeed earlier this year the Halo Business Angel Network (HBAN) estimated that some €90 million was available to Irish companies from angel investors.

And now a new EU-funded initiative is hoping to get more people with extensive business experience involved. Senior Enterprise aims to offer advice to those aged 50 or over on how to put their money to work by investing privately in companies. It is set to offer a series of training programmes for potential “informal investors”, at which participants will learn how to assess the trading performance and potential viability of new businesses worthy of investment.

“What our training programme aims to do is demystify the investment area for those who have never invested before and impart to participants the basics of sound investment practice,” says John Byrne, project director with Senior Enterprise.

The organisation has already held one well-attended seminar, which costs €25, and is set to schedule another before Christmas.

“We had an unbelievable reaction, with twice as many people turning up as we thought, and we then had a flood of emails looking for another course,” notes Byrne.

With some 8,000 people having left the public sector last February, with lump-sums of anywhere between €20,000 to €200,000, it’s no surprise that there’s such a demand.

However, it’s not for the faint-hearted. As venture capitalist and business adviser Bob McGowan Smyth warns, “the most likely outcome of any one angel investment is failure. You have to know it’s high risk.” Apart from the company collapsing, the biggest other risk, which has particular relevance to those in retirement, is the illiquidity of the investment.