Government could backtrack on changes at start-ups after critics warn they could lock out female ‘angel’ investors
Block: Sam Smith fears women will be excluded
The government could backtrack on changes to rules promoting start-ups after critics warned they could shut out female “angel” investors.
Bim Afolami, the city’s minister, said this week that the government had taken note of the “significant concerns.”
Angel investors put money into start-up companies.
Under current rules, companies need approval from municipal regulators before they can sell themselves to investors.
But promotions aimed at high net worth individuals – including most angels – are exempt.
A row has arisen over measures from January 31 that will increase the high net worth threshold to £170,000 a year – up from £100,000 previously – because only 72,500 women in Britain earn that much. It has led to fears that women will be excluded.
Sam Smith, founder and former boss of broker FinnCap, said: “This change puts blockers where they don’t need to be.
“People from underrepresented backgrounds tend to support companies founded by other people from underrepresented backgrounds.”
Emma Sinclair, founder of digital marketplace EnterpriseAlumni, added: “It is catastrophic and paternalistic that fewer women can invest in female founders.”