Angel Investing in the UK: Insights from Roderick Beer

The UK has one of the world's most established angel investment ecosystems, playing a critical role in supporting innovative startups and high-growth businesses. We spoke with Roderick Beer, Managing Director of the UK Business Angels Association (UKBAA), about the future of angel investing, the policy changes needed to unlock more capital, and why widening participation will be key to continued growth. 

Q&A with Roderick Beer

The UK has one of the strongest angel investment communities in the world. What do we need to do to attract more individuals to become active angel investors?

The foundations are strong and continuing to grow. The number of active UK angel investors has increased by 54% in the last three years, rising from 36,800 in 2022 to 56,800 in 2025. Angel investing is also becoming increasingly mainstream as an asset class.

To sustain that momentum, we need to make the process more accessible through education, helping prospective investors understand how early-stage investing works and how tax relief schemes can reduce risk. Angel groups and syndicates should also serve as the primary entry point for new investors, allowing them to learn from experienced angels and invest alongside them with greater confidence.

We must also broaden participation geographically and demographically. Investment activity remains heavily concentrated in London and the South East, while women currently represent only around 14% of angel investors. Expanding access across regions and communities will be crucial to the sector's future growth.

Many successful entrepreneurs reinvest in the next generation of founders, but many others never make the leap. What are the biggest barriers and how can the ecosystem address them?

Successful entrepreneurs are often natural angel investors, yet many never make the transition. In most cases, the barriers are practical rather than financial.

Confidence and knowledge are significant factors. Assessing investment opportunities and constructing a diversified portfolio requires a different skill set from building and scaling a business. Access to quality deal flow, limited time and uncertainty around the EIS and SEIS tax frameworks can also discourage participation.

The ecosystem can address these challenges by encouraging new investors to join angel groups and syndicates. These networks provide structured education, access to opportunities, support with due diligence and mentorship from experienced investors. This collaborative approach helps reduce perceived barriers while enabling investors to gain confidence and experience.

What are the most important policy changes that would unlock significantly more capital for early-stage businesses across the UK?

Our priority is protecting and strengthening the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS), which form the foundation of the UK's angel investment market. In our research, 88% of angel investors stated that EIS was crucial or very important to their decision to invest.

Investors need long-term certainty around these schemes, faster and more predictable Advance Assurance processes, reinvestment relief that encourages the recycling of capital following successful exits, and inheritance tax treatment that recognises the illiquid and high-risk nature of early-stage investments.

We would also like to see the SEIS investment limit for Knowledge-Intensive Companies increased to £500,000, stronger angel ecosystems developed across all UK regions, and greater participation from women, ethnically diverse investors and first-time angels.

What trends are you seeing in angel investing today, and how have investor priorities changed over the last few years?

Angel investing is attracting more participants, while investors are becoming increasingly selective in how they deploy capital. We are seeing the emergence of a more professional, portfolio-focused investor base.

One of the most notable shifts is towards follow-on investment. Among the angel groups we surveyed, 64% of capital was invested into follow-on rounds compared to 36% in new opportunities. The slowdown in Series A funding means many angels are supporting their existing portfolio companies for longer periods.

We are also seeing a more relationship-driven approach to investing, with 70% of investments sourced through trusted networks and introductions. At the same time, SEIS continues to grow as an important source of early-stage capital, reaching £276 million in 2024-25, while EIS investment remained resilient at £1.575 billion.

Looking ahead, what gives you the greatest confidence in the future of the UK's startup ecosystem, and what concerns you most?

What gives me the greatest confidence is the depth, resilience and increasing professionalisation of the ecosystem. Angel investor numbers have grown significantly, investors are building more diversified portfolios, and organised angel groups are supporting businesses that collectively generate more than 8,000 jobs across every nation and region of the UK.

Angel investors provide the earliest capital for startup businesses, and this patient, high-risk investment is essential to delivering the UK's long-term growth ambitions.

My biggest concern is the fragility at the edges of the ecosystem. The tax incentives that underpin much of the market remain vulnerable to policy change, the ongoing Series A funding bottleneck is limiting capital available for new entrants, and investment remains concentrated in certain regions and demographics. If we can maintain a supportive policy environment and continue broadening participation, I am very optimistic about the future.