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Finance Secretary urges more activity

Swinney praises angels for ‘profound impact’ on Scotland

John SwinneyFinance Secretary John Swinney today called for an increase in business angel activity as part of a coordinated private-public sector strategy for growing companies in Scotland.

A partnership had been developed based on people taking risks which would help Scotland become a “world leading entrepreneurial and innovative nation,” he said.

Speaking at an event to mark the economic impact of Archangel Investments, the oldest of Scotland’s angel investment companies, he said: “We have wrestled over the years with the question of business birth rate and Archangels has been a significant player in making a contribution.

“The great strength of Archangels is to force the public sector to find ways of supporting this journey.”

Mr Swinney said the government’s co-investment fund and programmes such as ESpark and Scottish Edge had emerged on the back of the initiative of private individuals.

“So organisations like Archangels can prompt government policy in Scotland to ensure we have the right interventions in place to support the economy.

“We now have a very vibrant climate that is supporting business development.”

Addressing Archangels in particular, he said: “You have made a profound impact on the business climate in Scotland and Scotland is grateful for that.”

His comments came at a presentation of a study into Archangels’ activities held at Strathclyde Technology and Innovation Centre in Glasgow.

It found that in the 23 years since it was formed by entrepreneurs Mike Rutterford and Barry Sealey the companies in which its members have invested have helped create almost 3,000 jobs and generated £1.31 billion in turnover.

For every £1 invested by Archangels members, its portfolio companies have contributed between £7.08 and £8.94 in added value to the economy.

The project has also been beneficial to investors whose £14.34 return for every £1 invested is more than twice the $6.23 generated for every $1 invested by US venture capital companies.

Archangels has exited 18 companies of which 12 remain in Scotland or the UK. There has been a 44% failure rate (by number), although this accounts for just 14.9% of cash invested, equating to £13.6m.

Mr Rutterford, who addressed the event, joked that when he and Mr Sealey launched the venture “we didn’t have a clue”. He said he was delighted that apart from making money, having fun and putting something back, the syndicate had also done good for mankind by supporting companies such as eyecare firm Optos and the artificial limbs developer Touch Bionics.

“Archangels is not one company. It is an agglomeration of 80 businesses,” he said.

The research was carried out by Dr Niall MacKenzie and Margaret Coughtrie of the Hunter Centre for Entrepreneurship which is based at Strathclyde Business School.

Photo: John Swinney addressing the Archangel event (by Robert Perry)

 

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