Spring Budget 2024: Government Urged To Reverse The New Angel Investment Policy.

With International Women’s Day around the corner, the British Government has revealed plans to reverse a recent amendment to the criteria for angel investors, a change that was seen as unfairly impacting women in the sector. 

What does the new policy entail?

On 31st January 2024, new regulations were announced in the UK that were seen to be on course to unfairly impact female investors. These included:

• Raising the wealth threshold for High Net Worth Investor status from £100,000 to £170,000.
• Changing qualifications for advanced investment activities, including angel investment.
• Modifying criteria for individual investments: no longer required to have multiple investments in unlisted companies in the last two years.
• Increasing annual turnover threshold for company directors from £1 million to £1.6 million over the last two years.

The changes were apparently in response to soaring inflation and aimed at preventing investor defaults. It was also mentioned that exemption rules for high-net-worth individuals had not been updated since 2005.

What has the response been?

Critics expressed concerns that the updated rules could exclude a significant number of female investors, who typically have lower earnings than their male counterparts. The campaign group 'InvestHER', endorsed by prominent business figures like Mary Portas, strongly advocated for a reversal of these changes. An open letter from last month criticised the decision, emphasising its disproportionate effect on women in angel investing. Research indicates that women entrepreneurs in the UK receive only 2% of all venture capital, a figure that remains low despite an increase in female entrepreneurs. This reversal is crucial as the government aims to increase the number of female entrepreneurs by 50% by 2030, amidst economic challenges. Recent data shows a steady rise in women's self-employment, yet funding disparities persist, making the government's change vital for reducing the gap between female and male business owners.

Why does Acorn back the reversal of this policy update?

Acorn Property Group, founded in 1995 is a prominent, female-led housebuilder that has completed over 200 developments across the South West of England, South Wales and London. Acorn is also a flexible joint venture partner, working with landowners, introducers, local authorities and other public bodies, housing associations and charities.

At Acorn Property Invest, the fundraising arm of the Group - we utilise the same financial promotion rules to allow High Net Worth Individuals and Sophisticated Investors to back our house-building activities, an area of investment that has traditionally been difficult to access. The management team within the companies understand from first-hand experience what it is like to be a minority in a typically male-dominated industry and considering that female investors are twice as likely to back companies led by women compared to their male counterparts, the reversal in government policy is crucial in maintaining the momentum towards reducing the disparity between female and male entrepreneurs.

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