WOTAN
Wider Oxford Technology Angel Network
Background & History
In January 2024, new rules were introduced governing who in the UK is allowed to make business angel type of investments. The new rules generally make it more difficult for people to qualify. However, one means of qualifying is to have been a member of a business angel network for at least six months.
For the last 30 years (or even 45 years if one includes Venture Capital Report, which started in 1978), Oxford Technology has operated a business angel network in that we have enabled the founders of businesses seeking capital, either to start or to expand, to present their investment cases to individual investors. In 1978, we did this by means of a publication, Venture Capital Report, which ran for 25 years until 2003. For the last ten years, we have operated a business angel network in which, before Covid, founders could present their cases to investors at a venue in London. For the last four years, we have held monthly presentations, during which founders can present to investors, with everyone attending via Zoom.
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It all works very easily, and hundreds (actually, by now, more than 1,000) of start-up and early-stage businesses have been able to raise capital by these means over the last 45 years. We have always been very up-front about the high-risk nature of such investments.
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During the 45 years since Venture Capital Report was launched in 1978, there have been many changes in investment-eligibility rules. An interesting story is that when I was thinking of starting Venture Capital Report, I was told “You can’t do that – it’s against the law. You aren’t allowed to solicit investment for a start-up company except via a stockbroker or an approved person.” So I went to see a solicitor who confirmed that this was indeed the case. Full of youthful zeal as I was at the time, I thought this was ridiculous and maybe one of the reasons why the UK economy created so few start-up businesses. The top rate of income tax was 83%, and any unearned income (i.e. dividends or interest) was taxed at 83% + 15% surcharge, so 98%. And the govt automatically owned all IP coming out of universities. So absolutely nothing was happening. It was almost impossible to get anything started.
So, I resolved to go ahead anyway and see what happened. The first issue of VCR was in Dec 1978, and Mrs Thatcher was elected in April 1979. She was on the same tack as I was, wanting to make the UK a more enterprising place where people could start businesses more easily. So, the Cabinet Office subscribed to Venture Capital Report and she used to invite me to Downing Street to explain to her Chancellors the practical difficulties which entrepreneurs faced in getting started. There were then many govt initiatives to try to make things better. The Business Start-Up Scheme, The Loan Guarantee Scheme, The Business Expansion Scheme, and others. Then, in the late 1980s, the govt decided to launch its own version of the Venture Capital Report in 5 regional locations. This was something of a blow to us because the Venture Capital Report had always been something of a labour of love. It was very hard work and just about broke even. It had been started with an investment of £5,000. So, having several £m pumped into a rival operation was not a prospect I relished. However, when the govt lawyers looked into it, they concluded, just as the solicitor whom I had consulted ten years earlier, that what was proposed was illegal. At this point, I received a very nice letter from Michael Heseltine, President of the Board of Trade. The letter said (paraphrased) “Dear Mr Cary, We, the govt, very much like what you are doing with the Venture Capital Report, helping entrepreneurs to raise the capital they need to start new businesses. But we think you are illegal. But don’t worry. Carry on, and we will change the law.”
That is when the concepts of the ‘High Net Worth Individual’ and the ‘Sophisticated Investor’ were introduced into the law. The govt then went ahead with its scheme to set up five regional versions of the Venture Capital Report, and asked me to make the speech at the launch, an invitation I accepted with mixed feelings!
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Anyway, now there is another change. And it would seem that the simplest way for those who would like to consider making business angel type investments is to have belonged to a business angel network for at least six months.
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Hitherto, we have been operating informally. Anyone wishing to attend our Zoom presentation meetings has needed to register, confirming that they are a High Net Worth Individual or a Sophisticated Investor. It has all worked very easily. But with the new legislation in place and the criteria required to be considered a High Net Worth Individual now having become more onerous, we have decided to formalise our network and give it the name WOTAN - the Wider Oxford Technology Angel Network.
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There will be no fee or annual subscription. If you have not already been attending our presentations or are not a member of another angel network and also not a High Net Worth Individual under the new rules, you will be entitled to attend the presentations and to see recordings of previous presentations, but you will not be permitted to invest until six months after you joined. So, our suggestion is that you join now so that the clock starts. After six months, you will have been a member of a business angels network and will be permitted to make business angel type investments.
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