The (good) network advantage in angel investing by Tom Britton
Time and time again, we've found that what separates successful venture and angel investing from the rest is access to quality deal flow. You've likely read about an incredible startup exit in the financial press but have yet to achieve one yourself (congrats if you have).
Investors operating independently fail or succeed on the strength of their deal flow. Fishing in the same ponds as others—think demo days and pitch events—leads to competing for the best deals and can drive those valuations up. Trying to truly operate independently just doesn't make sense. Below, and with the help of AI, I look into the data surrounding angel networks and whether being part of, or co-investing with, a network may help you up your deal flow game.
The reality most investors miss
According to the University of New Hampshire Center for Venture Research, 99% of quality venture opportunities never reach individual investors, instead flowing through established networks where institutional relationships determine access.
Individual investors typically evaluate 2-3 deals annually from whatever reaches them through personal connections. Network-connected investors can assess 10-15 pre-screened opportunities through the networks' organised pitch or review events. However, the difference isn't just volume; it's access to companies that have already survived professional screening processes—the effect of every member of the network acting as both a beacon for opportunities and an initial screen.
In short, if you are operating independently, then you are likely missing out on a lot of opportunities.
1 - 0 in favour of being part of a network
Why structured networks outperform individual investing
Professional networks don't just provide better deal access; they provide better decision-making frameworks that individual investors cannot replicate.
Multiple independent studies demonstrate that network advantages compound over time in venture investing. Research by the Angel Capital Association shows that organised networks consistently achieve better outcomes than individual investors, with structured deal flow and collective expertise delivering superior due diligence quality.
The advantage stems from what successful venture investors have always known: information asymmetry determines returns. When you combine sector specialists' market knowledge with operational experts' execution insight and experienced investors' pattern recognition, the quality of investment decisions can improve significantly. Another win for diversification—only this time of the due diligence team.
2 - 0 to joining a network
But not all networks are created equal
Of course, the success of any network hinges on its access to deal flow and the quality of due diligence the members can provide. The landmark Wiltbank/Boeker study analysing over 1,000 angel exits revealed stark performance differences based on investment approach.
Time spent on due diligence made the difference between success and failure:
Less than 20 hours spent on due diligence: 1.1x return (essentially breaking even) and a 65% failure rate
20-40 hours on due diligence: 5.9x return
More than 40 hours on due diligence: 7.1x return and a 45% failure rate
Put simply, rigorous networks conducting proper due diligence delivered 6.45x better returns (7.1x vs 1.1x) than casual investors making quick decisions.
But due diligence time alone wasn't the only differentiator. Industry expertise mattered enormously—investors with 14+ years of relevant experience achieved double the returns of those without domain knowledge.
Further, ongoing involvement post-investment is crucial to success. Angels who stayed engaged with portfolio companies (interacting twice monthly) achieved 3.7x returns versus just 1.3x for those checking in twice yearly.
When searching for a network to join, make sure you do your due diligence on the members:
Do they have expertise that complements your own?
Do they conduct thorough due diligence?
Do they get involved post-investment and add value?
3 - 0 for joining a network—if it's a good network
Could Angel Academe be that network?
Since 2014, Angel Academe has built what might be the UK's most rigorous approach to early-stage venture deal flow. Through their professional screening infrastructure, they review over 500 applications annually, shortlisting just 120-140 for detailed evaluation. Only 3-4 founders make it to screening meetings, with just 1 in 10 invited to pitch to the full network.
But Angel Academe represents more than deal access; it's a structured approach to venture investing that individual investors cannot build. With over 1,000 investors having participated since 2014, the network has methodically reviewed over 5,000 opportunities and backed 50+ companies through 100+ funding rounds.
Their portfolio companies have collectively gone on to raise over £150 million from subsequent institutional investors. This follow-on funding success rate indicates something crucial: the network's rigorous selection process identifies companies that professional VCs later validate.
Recent valuation growth examples:
Béa Fertility: 8.4x valuation increase, transforming fertility care with AI-powered diagnostics
Uncommon (formerly Higher Steaks): 30.7x valuation increase, pioneering cellular agriculture technology
Provenance: 5.7x valuation increase, revolutionising supply chain transparency through blockchain
Century Tech: 5.5x valuation increase, personalising education through machine learning algorithms
Past performance is not a reliable indicator of future results. While these examples highlight successful valuation increases, it's important to note that startup investing carries significant risks and many investments may result in partial or total loss, and valuation increase does not guarantee an exit. These portfolio examples demonstrate the quality that can come out of their rigorous selection process, professional screening that individual venture investors lack.
If not joining, is the timing right to co-invest?
Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more.
According to UK Business Angels Association data, female angels have been involved in deals worth £2.34 billion over the past decade, backing over 4,000 businesses and helping create more than 10,000 jobs.
Despite this track record, women represent only 14% of angel investors, creating what could be an opportunity for those who recognise the potential before the broader market catches up.
While most investors continue to compete for visible opportunities (missing quality deal flow, conducting isolated due diligence, and lacking institutional relationships), perhaps it's time to consider the advantages of joining a network.
The Angel Academe EIS Fund represents an opportunity to access a differentiated approach to early-stage opportunities. With the potential for 30% EIS income tax relief and capital gains exemption (provided qualifying conditions are met, tax reliefs are also subject to status and change), and access to a selection process that has identified companies with significant valuation increases, why not position yourself within a network that individual venture investors could never build.
EIS investments are high-risk investments in early-stage companies. You could lose all your money. Tax reliefs depend on your individual circumstances and may change. You should seek independent financial and tax advice before investing.
Want to learn more? Details about the Angel Academe EIS fund can be found here.
Thanks to data / articles from: