A leading business specialist has called on local entrepreneurs to join forces to form an investment network in order to boost the fortunes of the north-east economy.
Graeme Allan, managing partner for Anderson Anderson and Brown (AAB), said there was a “a lack of real opportunities in the north-east” provided by “angel” investor syndicates, such as Archangel Investors, based in Edinburgh.
The call came as a study by the Hunter Centre for Entrepreneurship at the University of Strathclyde Business School revealed that Archangel has invested over £90million in 80 Scottish companies since it was formed in 1992.
The report found that investment by members of the Archangel syndicate have led to the creation of nearly 3,000 high-value jobs.
For every £1 invested by Archangels, its portfolio companies contributed an estimated £7.08 – £8.94 of “gross value-added” (GVA) to the Scottish economy, the report also found.
Since 2003, the Scottish Government’s Scottish Co-Investment Fund (SCF) has provided match funding for angel syndicates.
Scottish Enterprise, through the SCF, has invested around £18.9milllion in Archangels’ active portfolio to date.
Mr Allan, whose firm launched its Expertise To Entrepreneurs division (E2) in 2013 with a view to providing support to angel investors in Aberdeenshire, said a north-east syndicate could benefit both investors and potential high-growth companies.
“As can be seen from the Hunter Centre for Entrepreneurship study, there is not only a significant benefit to the investor but also to the economy as a whole,” he said.
“With challenging times currently in the oil industry its perhaps an opportunity to establish a group like Archangel and look at ways for the substantial number of local entrepreneurs to participate in something similar.
“There is also possibly an opportunity in conjunction with Elevator, which launched its first accelerator program back in April for potential high growth companies, to consider angel-backed funding for projects in both the oil & gas and other sectors.”
Deputy First Minister John Swinney, welcomed the launch of the report.
He said: “This report demonstrates what an outstanding success Archangels is, and how instrumental its investment has been in supporting sustainable Scottish businesses, creating high value jobs and contributing to the economy.
“I want to see an increase in the scale of business angel activity in Scotland, and through the tremendous work of Archangels and its partners and the increased support and funding for SMEs in our Programme for Government, I am confident we can meet that aim.”