By Modwenna Rees-Mogg, Founder and CEO of AngelNews

Did you know that I am just over one quarter Scottish? To date I have been privately proud of this fact, but I am tempted to start boasting about these genes.

Why? Well because I really do want to start identifying myself with what those canny brethren based north of the border. Have you noticed that Braveheart Ventures, which we wrote about when it acquired the angel activity in Yorkshire a while back, has now reached London with its acquisition of Envestors[b] yesterday?

It's a sensible deal - giving Braveheart a larger source of dealflow and Envestors investors a new way to hear about fully due diligenced and negotiated deals. Ideal for the angel who is pressed for time or whose investment capacity makes it more appropriate to build a portfolio of passive investments. Braveheart builds critical mass and wins a subsidiary with international activities; Envestors becomes more financially secure inside a large, established and quoted group. It was an all share deal so interests going forward will be aligned and the same people will stay in place.

The deal is another sign that seismic change it going on in the UK angel market. All independent angel networks will now be thinking of themselves as possible targets or acquirors, especiallly as this is the second significant deal (the last one was Katalyst's acquisition by Octopus Asset Management) in the industry. I wonder how will Beer & Partners, Hotbed, Pi Capital and Oxford Capital Partners will react to the news? Will they be calling Geoffrey Thompson at Braveheart or will they be making some other calls themselves?

What it does show is that you can build an "angel business" with the aim of selling out or merging with another group, so I will be watching this space closely for signs of new start-ups. It also shows that the industry trend must be towards a full service asset management model where high levels of service are offered to investors, and away from the traditional "glorified broker" model everyone has followed in the past. It also shows that critical mass is becoming more and more important in order to create sustainable and sizeable profits. The blend of full service advice and managed funds is the way forward with the client being the investors and not the entrepreneur. In the case of Braveheart this has manifested itself to date in the form of an EIS fund offering and for Octopus it has involved a move into EIS Funds, VCTs and even managing Government venture money. Anyone running an "angel network" or thinking of starting one should take note.

Envestors has all the best characteristics of an angel deal. Founded by a team of serial entrepreneurs, with an agressive, but professional business model and one of the best branding strategies I have ever seen in any sector. The result: a top price (10x PBT) and healthy prospects for the future. The founders will have made many times their original capital - a clue about this can be found in the announcement which indicated that Envestors had net tangible assets of only £23,542

Is this the start of a return to the days of all paper acquisitions? The terms of the deal, whilst generous on the face of it, do not come without a cost. The £2.45m consideration will be paid in 6 tranches over 5 years and will be based on turnover directly attributable Envestors. The shares are priced at a 25% premium to the average mid market price just before the announcement so it will be incumbent on everyone to make this deal work for the now enlarged Envestors shareholder base!

I wonder if William Wallace could possibly have imagined that one day the Scottish would be successfully invading England, even if it is only in the early stage [b]investment market?!

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