Navigating High-Risk Waters with a Strategic Approach to Climate-Focused Investments
Angel investment is, of its nature, very high risk. Most start-up businesses fail in their first year; of those which survive, a majority fail in their second year. It is not an investment decision that provides security, exposed as it is to the highest possible risk. For this reason, angel investors are thin on the ground. And they will only invest sums they can afford to lose, the majority of their investments being in much safer, lower risk sectors. (Economist Nicholas Taleb once described them as the most attractive investments you can make, because they offer an asymmetric upside. You know precisely what the downside is, complete loss of your money, but you have no idea what the upside might be. It could be twice what you put in, ten times what you put in, a hundred times, or even a thousand times. There is no other way of investing your money that compares with this.)
But from the start, Green Angel Syndicate was founded on the premise that it would offer a specialist service to investors and founders alike. This would minimise the risk of failure, because the deals selected for investment would be in companies which the Syndicate understands. This remains the philosophy of the company. It is thus no accident that the current record of the syndicate is 43 invested companies, with just one going bust as yet – an unprecedented record among UK angel syndicates, but no accident at all.
I tend to say to people who question our ability to deliver a return, and think this is more a philanthropic concern, that our purpose is not to help them make money. Our purpose is to help them fight climate change. If we are successful, as we have been to date and we must continue to be, then you will make money. We cannot afford for our portfolio companies to go bust. Climate change will not wait. When one of our companies goes bust, we have wasted time in the fight to arrest it and that defeats our entire purpose. Even more important, if our investments do not help to develop commercially successful companies that develop global sales, their impact will be insignificant. Commercial success is integral to our mission, our own commercial success, and the commercial success of every one of the companies in which we invest.
Expanding the Fight Against Climate Change Beyond Investment, Toward a Sustainable Future
Fortunately we are achieving both. But in the years that we have enjoyed this success, there has been no room for complacency. We might have built a successful syndicate, but the wider world has not even gotten close to slowing down the carbon emissions that are causing global warming. They are still increasing, and are not expected to reach their peak until 2027 or 2028. This means the ambition to reach Net Zero is still decades away.
We are travelling too slowly as a global economy to prevent our global community from being severely damaged by Climate Change. It is already happening. The UK’s June 2023 temperatures set records which caused water shortages at the time throughout the South-East of England. Meanwhile, during that same period, from Texas to Kuwait we saw temperatures all over the world escalating into the 50’s. These are uninhabitable levels of heat.
There is little doubt that reality is bad for many of us, and shows no signs of getting better. There are headlines of apocalyptic gloom in gathering numbers. This trend is recent. As little as five years ago, the extreme weather events reported in the media were occasional. Now, they are almost daily. Climate Change is happening already, and changing all of our lives.
Hence we believe we cannot rest on our laurels at Green Angel Syndicate. We have plans to grow which we are already putting into effect. We are expanding into Fund Management, we have launched an EIS Fund, we have attracted a £10 million commitment from UK Government to match our Fund investments (which match our Syndicate investments), we are planning the launch of a Series A Fund, and we have changed the company name to reflect this expansion. We are now called Green Angel Ventures.
This plan is all based on the same premise – our specialisation in the fight against climate change. As our investment base broadens, and our investments increase, we remain true to the fundamental principle. Every investment will make a contribution to reducing carbon emissions, which is essential to arrest and reverse global warming. Carbon emissions are the direct cause. The concentration of carbon in the atmosphere prevents the sun’s heat from escaping. By increasing the concentration to levels unknown in the history of the human race, we have changed the nature of the climate on which human life and all the plant and animal life we know has depended for the last 10,000 years – the Holocene Period, as it is known.
We believe that the way we manage carbon now will determine whether the human race is viable in future. All of our investments are designed to reduce carbon emissions and remove carbon from the atmosphere. Our mission is implacably serious. We hope you might join us in the fight. Together we can win.