Uncovering the secrets of cross-border angel investment

Investing cross-borders is becoming increasingly popular among angel investors, with some European countries being more popular than others. But why are these countries specifically chosen? To answer this question, the 4NGELS project surveyed and talked to angel investors from four countries (Estonia, Finland, Poland, and Slovenia) and discovered that relationships with local investors, the local ecosystem, and knowledge about the business cultures were key motivators. How can other European countries encourage similar investment behaviour? Find out here, join the 4NGELS Training Programme and keep an eye out for news regarding the 4NGLES project for all your cross-border investment needs. 

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Main recommendations for successful cross-border investments

• Simplify the ecosystem with standardised legal templates
• Stimulate and participate in local national start-up events and other social gatherings
• Join local Angel Networks for a steady deal flow and invest through syndicates
• Stay up to date on the 4NGLES project which stimulates cross-border investments in Europe

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SIMPLIFY THE COMPLICATED ECOSYSTEM, USE TRUST AS A BUFFER

Trust and relationships are important in investing and should not come as a surprise to anyone. After all, it serves as a great buffer for an investor to overcome complexities within the ecosystem such as a difficult-to-understand language, tax system, legal framework, deal flow, and bureaucracy. Although this entry barrier can be lowered by providing publicly available standardised legal templates (e.g. Option, Advisor, and Seed agreements), these in isolation are not effective enough to help to navigate in a new environment and remove unnecessary doubt. So how do you generate this trust without a vast history in cross-border investment?

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PARTICIPATE IN NATIONAL START-UP SOCIAL EVENTS

From the interviews conducted with experienced angels, popular destinations are putting a lot of effort into stimulating interpersonal relations between investors with the sole purpose to build trust. This is often achieved through hosting nationwide start-up events, training, and other social gatherings. These are great places to meet like-minded people who can help you to take your next steps. Having governmental recognition and support in planning such events, although not required, does contribute towards setting the right image and setting.

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JOIN LOCAL ANGEL NETWORKS AND INVEST TROUGH SYNDICATES

Another great way for starting angels to dabble with cross-border investments is to sign up for local angel networks and invest through the syndicates they provide. Angel networks often host their own events and knowledge sharing sessions in addition to giving access to a steady deal flow. Investing through a syndicate is helpful as the financial entry barrier can be low, and the administrative tasks are taken care of by a lead investor. 

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STAY UP TO DATE ON THE 4NGELS PROJECT

Lastly, a great first step to learn more about cross-border angel investing is to join the 4NGELS network. This network is connecting the business angel networks from strong innovation ecosystems - Estonia (EstBAN) and Finland (FiBAN) – with the business angel networks from less advanced start-up investment territories - Poland (Cobin Angels) and Slovenia (Business Angels of Slovenia) and start-ups as well as other wider innovation ecosystem stakeholders from Europe. Together we share collective ambitions to understand how to successfully initiate cross-border angel investing in Europe, and implement this to maximise the impact of the benefits and reduce the innovation divide. In addition, the project will involve different stakeholders from all four ecosystems, creating a flow of connections and knowledge. The 4NGELS Programme is funded by the European Commission. 

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