When I first considered angel investing, I carried all the usual assumptions. I thought it was something reserved for people with hundreds of thousands of pounds to spare, willing to put six figures into a single deal. I also assumed it was a field dominated by those with backgrounds in corporate finance, venture capital, or private equity. In other words, it felt out of reach for anyone who didn’t fit that profile.
The reality, I’ve discovered, is very different. The landscape has changed. You no longer see many lone investors putting in very large sums on their own. Instead, syndicates like Women Angels of Wales allow members to contribute much smaller amounts while pooling resources for greater impact. Our minimum ticket size is £2,000, and we ask members to budget for £4,000 a year – which could be two investments of £2,000. Our objective is to democratise angel investing making it accessible to more people than many realise.
There is also a misconception that you need to arrive with all the answers, or a deep technical knowledge of the sectors you invest in. In our group, the breadth of experience is our strength. Our members come from law, accountancy, medicine, life sciences, financial services, property, data, digital and many other areas. When we assess opportunities, we draw on this collective expertise. No one person is expected to know everything and you learn an enormous amount simply by being involved.
Angel investing is regulated under the Financial Services and Markets Act 2000, and specifically the Financial Promotion Order 2005. That means you must declare yourself (‘self certify’) as either a high-net-worth individual or a sophisticated investor. There is specific criterion for these definitions, but they’re not as restrictive as people might think. For example, one way of qualifying as a sophisticated investor is to be a member of an angel group for six months. This means that even if you don’t initially meet the high-net-worth criteria – such as an annual income over £100,000 or net assets of more than £250,000 excluding your home and pension – you can still work towards being eligible to invest.
During that time, you can take advantage of training and education. At Women Angels of Wales, we run sessions in partnership with the UK Business Angels Association, alongside more informal opportunities to learn from other members and from our discussions with founders. That “on the job” learning is invaluable. By the time you are ready to invest, you understand the process, the risks, and the rewards in a far more practical way.
Tax reliefs can also make early-stage investing more attractive. The Seed Enterprise Investment Scheme (SEIS) offers up to 50% income tax relief on qualifying investments, while the Enterprise Investment Scheme (EIS) offers up to 30%. Both schemes provide exemption from capital gains tax on shares held for at least three years, and loss relief if the company does not succeed. These incentives are designed to encourage investment in smaller, higher-risk companies, and while they don’t remove the risk, they do help reduce its financial impact.
For me, one of the most compelling differences between angel investing and buying shares in a listed company is the level of involvement. When you invest through the stock market, you are generally removed from the day-to-day realities of the business. With angel investing, there is an opportunity to get closer, not just by providing funding, but by offering expertise and connections.
In our group, we talk about “smart capital” – the idea that our collective knowledge is as valuable as the money we invest. I have seen members take on active roles with portfolio companies, from providing communications and PR advice to stepping in as a fractional chief operating officer. That level of engagement is optional, but for many of us, it is one of the most satisfying parts of the process. It allows you to see the direct impact of your support on a company’s growth and to be part of its journey.
Angel investing is not without its risks. These are early-stage companies, and not all will succeed. But by investing through a syndicate, you can spread your investments across multiple businesses and sectors, reducing your exposure to any single venture. You also gain the benefit of collective due diligence and the reassurance of making decisions alongside others with different perspectives.
The myths about angel investing – that it is only for the very wealthy, that it requires specialist financial expertise, that it is something you do alone – can deter people who could bring real value as investors. Women Angels of Wales actively works to lower the barriers, to encourage more women to become angel investors. My experience of being an angel investor goes far beyond financial returns. It is about learning, contributing, and being part of building the next generation of female angel investors and businesses in Wales.
Rachel talks about this and more in The Women Angels of Wales Investment Series podcast episode Becoming an Angel. Listen to the podcast here.
