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REGINALD VOSSEN: a “New Wave of Entrepreneurs” is coming in

War, inflation, Covid: European Business Angels sense an opportunity to discover “the next big thing” in the crisis.

The war in Ukraine, inflation, COVID, down-rounds and mass layoffs: nowadays, crises are everywhere we look. Some feel that this is also hitting the startup scene in Europe hard. But BAs (business angels) see the situation differently. Rather, they sense an opportunity to discover “the next big thing” in the crisis.

Reginald Vossen is managing director of BAN Flanders and Chair of the BAE Club. The BAE Club is a subgroup of Business Angels Europe, grouping together the most effective angel networks in Europe and Canada to foster networking, knowledge sharing and international syndication. Doorway signed a partnership with the Belgian business angel BAN Club in May 2022, which brings together 250 of the most active BAs in Belgium and counts of more than 440 investments over the past 20 years (click here to find out more about the partnership).

Stagflation, downrounds in startups and scaleups, various trouble spots such as Ukraine and the Covid pandemic. What is the investment mood among business angels in Europe?

Business angels are seasoned business people, mostly C level managers or ex-entrepreneurs, so they are not easily thrown off by market cycles that in particular concern public markets. In fact, we know from previous crises that, as we speak, a new wave of entrepreneurs will think of innovative ways of capturing new market opportunities. 

We see that the opportunity of early stage investing is as strong as it ever was. In our survey amongst our members, we received sparse indication that the investment mood took a bit hit. 

However, of course, we see also indications that the investors are a little bit cautious. We want to understand what exactly makes the current crisis tick. 

Business angels always invest very locally. One goal of the BAE Club is to increase cross-border investments. Which country connections have worked well in the BA area so far, which ones need improvement? 

Cross-border investing on a consistent basis is new for everyone. However, we do see that smaller countries and regions look beyond borders more easily. Scale-ups, but also investors from these smaller countries tend to expand internationally much quicker. 

Furthermore, we noticed how national tax incentives limit the maneuverability of angels. To receive your tax break, you need to invest within your national borders. 

An interesting best-practice therefore is the French Madelin instrument, which allows French investors to receive their tax break for all investments made within the EU. We have seen this work in real life within our BAE Club, where numerous angel investors of the French network BADGE invested in a Portuguese portfolio company, named Winegrid, presented by the Italian Angels for Growth network, which also did a fundraising with Doorway on December 2021. 

Because we believe more policy makers in Europe need to know about this possibility, we have published a position paper together with Invest Europe to underscore the potential of this incentive.

What opportunities and trends do you currently see at BA Investments in Europe? Which are the most attractive industries and regions? 

Medtech and fintech have proven their worth over the last years and remain the leading investment sectors among our clubs. We see a real ambition through from investors to contribute to and be part of Greentech. In general, business angels are among the first to embrace the new challenges of our planet. 

Click here for the full interview