Together with hundreds of other angel investors, founders, and tech industry leaders, AIN has signed an open letter to the Chancellor, presenting a case for reversing the forthcoming changes to the definition of High Net Worth (HNW) individuals for investment eligibility.
At Angel Investment Network, we are committed to democratising the startup ecosystem, connecting the world to enable investors to back the great businesses of tomorrow.
In order to ensure those connections can flow freely, it is imperative to reduce barriers for startups to raise funding and for investors to access deals and invest.
If the proposed changes to the definition of High Net Worth individuals goes ahead, after January 31 there will be a 60% + reduction in the number of women able to invest on the basis of income in the UK. This will disproportionately impact female investors, already woefully underrepresented, significantly.
And what research was done to determine that people with net assets of £430,000 or an income of £170,000 are able to make informed business decisions? Surely there are much better alternatives that would be more inclusive, such as a suitability questionnaire to ascertain whether someone should be eligible, based on their understanding of the investment process and the risks involved.
900+ founders and investors have now signed an open letter calling on the Chancellor to reverse the changes, which they say are “anathema to the trailblazing startup ecosystem that has been built today”.
The startup ecosystem will be hit hard with female and underrepresented founders will be hardest. Diversity is crucial for a thriving startup ecosystem. It drives innovation, expands market understanding, enhances problem-solving capabilities, increases resilience, and contributes to positive social impact.
Different perspectives lead to a broader range of ideas and approaches, resulting in more robust and innovative problem-solving strategies. Angel investing risks becoming an elite-only activity, undoing huge amounts of good work to address this gap.
Fundamentally this will harm early-stage businesses who play a vital role in the UK economy and are the dominant creators of new jobs. The government should be doing everything in their power to encourage investments into startups, not putting up more barriers.
Mike Lebus + James Badgett, co-founders Angel Investment Network