Early stage companies in Scotland have benefited from a 26 per cent increase in business angel investments in the first nine months of 2012, figures from Linc Scotland have revealed.
Private investors channelled £15.6 million to firms during this period, a jump from £12.4 million in the previous year.
Linc Scotland – the national association of angel investors – said the difficult economic climate was ‘creating an opportunity for the angel groups to support up and coming Scottish talent’, as tough lending conditions force companies away from traditional funding routes such as banks.
“The results are extremely encouraging; especially the number of new companies that have received angel investment during 2012”, CEO David Grahame said.
“Business angel investment in Scotland is on an upward trend and the figures demonstrate that angels are still prepared to invest if the right opportunity is presented to them.”
Angels are typically high net worth people or syndicates which invest cash in return for equity, or shares, in a firm.
The number of companies supported by angel investment in Scotland has risen by 13 per cent during this period compared to last year. A total of 49 companies received funds from Scottish angels of which 15 are new companies – close to a 40 per cent increase.
The increase in investments comes amid new cuts to Scotland’s economic growth forecast made this month by a Strathclyde University think-tank. Despite fears of a low upturn in demand, its projections for the Scottish economy in 2013-14 remain slightly stronger than the rest of the UK as a whole.
Latest Government figures show that small enterprises – 0-49 employees – accounted for the majority of Scotland’s rise in private sector businesses which is at its highest level this year since 2000.
Like the rest of the UK, SMEs in Scotland account for more than 99 per cent of all private sector businesses and are seen as a vital link in growing the economy.