By Claire West
AngelNews has recently uncovered a new trend in the early stage investment world, after trying to discover why some VCT and EIS fund managers are more popular with private investors than others.
Discussions with fund managers have unveiled that those who take a proactive and transparent approach to communicating with their investors are seeing healthier levels of investment in this year’s fundraising season, compared with others who have a more traditional approach by relying on paper-based communications from time to time.
David Mott, Investment Director of Oxford Capital Partners explained:
“Transparency in the venture capital market is crucial to its development. We strongly believe in meeting investors in person, which is why we run our own events. We always enjoy the opportunity to build relationships with the investment community and give investors a greater sense of participation in the enterprise economy.”
Modwenna Rees-Mogg, CEO of AngelNews who identified this trend said:
“I meet lots of private investors through my business and was fascinated to learn that many of them increasingly want to understand more about how their money is being invested and which businesses are being backed and why. A number of fund managers are increasingly seeing that having a very open and friendly approach to investors adds great value. Such an approach also means that they can leverage the knowledge and skills of their investors in supporting portfolio companies as they grow. An added upside is that investors will allocate larger amounts for these firms to manage than they might otherwise have done.
“The days when an investor’s only role was to provide cash for other people to invest and then wait for great returns one day, is fast disappearing. Maybe it is the role the internet plays that has been the key factor in this change. Today, investors are only a click or a call away from finding out what is going on in the venture world. This has raised expectations that fund managers should be more proactive in this context.”
The most forward thinking VCT and EIS fund managers are taking matters into their own hands. There are increasing numbers of fund managers inviting their investors/shareholders to events where they can explain in detail what they are doing and showcase their expertise.
Patrick Reeve, Managing Partner of Albion Ventures said:
“We're always particularly keen to meet our shareholders in person, to talk them through what we're trying to achieve and to understand any of their concerns. We find that our AGMs are a really good medium for this and we make a great effort to make them useful for investors, including inviting the entrepreneurs we have backed to make presentations to our investors and chat to them on a one-on-one basis.”
In light of this trend, AngelNews has organised a VCT and EIS Investor Forum™ on 23rd November in London. This event will allow private investors to meet and debate with several fund managers on one day and in one place. For details of the agenda or for ticket information visit http://thevctandeisinvestorshow2010.eventbrite.com/