The world of start-ups can be challenging. There is the idea, there is the initial enthusiasm. Then you come across a reality that requires organisation, funding and support. The figure of Business Angel was created for this: category of investors, usually managers or professionals, dedicated to supporting start-ups in the very early stages of their existence, which has become a significant presence in the investment chain in venture capital. In Italy 1.671 sleep and in the period 2018-2022 they participated in more than 120 financing rounds, for an invested amount of over 45 million euros.
The report "Business angel in Italy: the impact of angel investing" created by Growth Capital e Italian Tech Alliance together with the Polytechnic of Turin and the University of East Anglia. “This study is important because it clearly shows how year after year in Italy the importance of angel investing has grown in supporting the growth of startups and innovative companies,” he commented Francis Cerruti, general director of Italian Tech Alliance. “Business Angels are now recognized as key elements for obtaining capital to support the growth of small and young businesses, in particular seed and early stage rounds, less covered by traditional venture capital compared to more advanced stage investment rounds".
Business Angels, over half organized in groups and networks: the Bags and the Bans
According to the report, 70% of the total identified Business Angels operate in Northern Italy: Lombardy leads the way with 687 active subjects, followed by Piedmont with 240 and Lazio with 174. 94% of the mapped Business Angels have an educational qualification higher and 78% have an entrepreneurial or managerial background. 66% of these are enrolled in at least one of the 33 Business angel group (Bag) e Business angel network (Ban). 17 Business angel groups operate in Italy (11 in the North-West, 4 in the North-East and 2 in Central Italy) and 16 Business angel networks (7 in the North-West, 2 in the North-East, 5 in Central Italy and 2 between South and Islands).
Constant growth in Bag/Ban's participation in financing
In the last five years, approximately 10% of the investment rounds completed in Italy have seen the participation of one or more Bag/Ban with a progressive and continuous growth from the 20 rounds in 2018 which involved Bag or Ban and the 30 in 2022. Still looking at the period 2018-2022, it is also highlighted that the'amount invested in rounds with the presence of Bag/Ban it represented approximately 20% of the total invested in Italy, with fluctuations from 6% to 28%. The amount invested in rounds with the presence of Bag/Ban represented a portion constantly growing of the total invested, going from 29 million in 2018 (out of total investments of 502 million) to 529 million in 2022 (out of over 1,8 billion in investments.
In detail, when they participate in a capital increase, Bag/Bans cover on average around 5% of the amount invested, a percentage reaching around 10% if mega rounds are excluded (i.e. rounds of an amount equal to or greater than 100 million euros). For what concern number of rounds, the report highlights how seed rounds represent the stage of maturity favored by Bag/Bans.
The presence of Bag/Ban is also interesting in more advanced investment stages (Series A and B+), typically attributable to follow-ons on companies that had already been the subject of investment previously, says the report. Looking at the sectors, in the period under analysis, Bag and Ban invested mainly in companies digital sectors with 27 rounds, life sciences for a total of 25 rounds, 17 for the fintech and 16 for smart city.
