There has been a growing interest in angel investing in Europe over the past few years. Last year we found the data was scarce and very few studies were conducted on the topic. As such, we created a set of questions specifically targeted to respondents who identified as angel investors in the survey and received close to 100 responses from all over Europe.
Angel investing has been democratized by the rise of scout programs, with investments no longer just coming from a small pool of previously successful entrepreneurs. The next generation of tech leaders now has the opportunity to vote for the teams they believe can build the next global success story out of Europe. Scout programs are just another measure of Europe’s maturing tech ecosystem, where it has become increasingly common to start a company rather than simply join one. People invest in people and, in a fragmented European market, those best-placed to spot talent early on are often former colleagues at tech companies - where many scout initiatives are now focused.
We gathered a list of over 100 ex-operators from $B+ European companies that had become investors, either through angel or institutional investing. This is not an exhaustive list and is entirely based on manual scraping of publicly available sources, but is a large enough sample to represent the type of investors emerging from the first generation of successful scale-ups.
An entrepreneurial mindset is a non-negotiable part of life at TransferWise, we encourage it and we hire for it. Everybody in the business has incredibly hard problems to solve, now just as much as in the earliest days, and an entrepreneurial spirit is essential in overcoming those challenges. At my last count there were more than 20 start-ups founded by TransferWise alumni, there are probably many more today. This mini ecosystem is supported with hires, advisory, connections and in many cases angel funding from other ex TransferWisers. That network is hard to replicate, and incredibly valuable. This very special environment is making more people feel supported to take the leap and solve other hard problems in the world once their time at TransferWise is up.
Widening access to capital to a more diverse group of individuals should accelerate the rebalancing of the founder makeup at the later stages. The Atomico angel programme was started in 2018 on this premise and with now two angel cohorts of 23 active individuals and close to 90 investments made, there is a sufficient sample size to put this hypothesis to the test. Given the rise of more angel and scout programs around Europe, it is perhaps a good time to share some of our key findings.
I think creating a stronger network of angels is a way to build a stronger European start-up ecosystem. Angel investors usually bring more market expertise and personal experience and passion to the start-ups they invest in, which is so valuable in the early days.
But one of the key obstacles to creating such a network is accessibility. Angel investing is still something that only very few people are doing and are able to do. And there aren’t many resources to support them or attract new ones.
There is this notion that to be an angel investor, one has to be able to invest big checks. In some countries that is still the case due to laws that are tailored more towards professional investors.
While we’re waiting for legislation to catch up, it has been great to see that crowd-investing platforms, like Funderbeam, are becoming more popular. Another example is the launch of an angel syndicate by Unconventional Ventures.