The “Tech for Good Angels” research project, which was created under the partnership of Bethnal Green Ventures (BGV), HSBC Innovation Banking UK, and Floww, recently released its long-awaited research report.
Prior to this research, there was no data on angel investments in tech for good startups and the impact potential. According to BGV and partners, the report is part of an initiative to address this knowledge gap.
The report comes at a time when more angels are aiming to make meaningful investments by prioritising positive outcomes for the people and planet. Despite the recent venture funding downturn, the report revealed that it did not discourage angels from investing more in tech for good startups.
Summary of main findings
The newly released report provides a starting point to understand the recent trends about angels’ roles in supporting tech businesses capable of addressing environmental and social issues.
The recent trends are:
- 84 per cent of respondents invested in tech for good businesses
- 63 per cent made between 1 and 5 investments in 2022
- 54 per cent of surveyed angels invested with an average ticket size of €5.7K-€22.9K
- 46 per cent of participants invest in the pre-seed stage
In the Key Insights section, most angels share two key motivations in investing in tech for good businesses: caring about the impact on people and the planet and leveraging their expertise to help founders.
Melanie Hayes, managing partner at Bethnal Green Ventures, says, “As early-stage VC in tech for good businesses, we’re pleased to see the growing appetite of angel investors to back founders driving positive impact at scale.”
“Angels play such a pivotal role in the growth of early-stage businesses, and we hope that this trend in backing tech for good founders continues,” adds Hayes.
Additional discoveries
The report made other significant findings on the angels’ decision to back tech for good startups. According to the report, more angels are becoming more aware of the risks of impact washing.
Yet, there is still no standardised approach for angels to evaluate the impact potential of startups. Many attribute this lack of approach to challenges in understanding the potential markets and the lack of definition of “good” returns and growths.
BGV published a due diligence questionnaire (DDQ) containing nine tips for early-stage investors to assess, measure, and manage impact.
With the DDQ, BGV expects to help angels in determining the impact potential of each tech for good startups.
The report also showcases the surprising resilience of the tech for good businesses in the current venture funding downturn. Whilst 27 per cent of angels expect to make fewer deals in 2023, only 8 per cent aim to reduce their capital investment in these startups.
Lastly, the report mentions the need for a robust ecosystem to unlock capital from angels. Despite the altruistic goals to back the tech for good startups, the angels still look forward to expanding connections with fellow angels and accessing other investment opportunities.
Read the orginal article: https://siliconcanals.com/news/startups/more-angels-to-back-tech-startups/
