The European Business Angels Network (EBAN) has just proclaimed Albert Colomer the most visionary investor in Europe. The award recognises the man behind the first business angels network in the State, the Catalan BANC, which began in 2002. In 2004, he was also involved in setting up the Spanish ESBAN network. Also behind the Fundació Autoocupació i de Reempresa, in this first part of an interview he reviews 15 years of private investment in Spain.
The most visionary investor in Europe sounds great, doesn’t it?
The truth is that these awards from within the sector itself are the ones you appreciate the most. I have been involved for some 15 years and at one of the congresses they thought it would be a good moment to celebrate two things. On the one hand, what I do, but on the other, the change it meant in setting up the first business angels network in Spain (BANC). It is now one of the main countries in terms of business angel investment in entrepreneurs in the whole of Europe, despite having to deal with more difficult tax conditions than some colleagues.
How did this network begin?
I spent three or four years going around Spain explaining what a business angel is. Between 2002 and 2006 we managed to help get 41 networks going all over Spain, many of which came out of a series of seminars we did in Madrid with 32 people and who then spread out. They would call me and say: "hey, we are in the Canary Islands. What about coming and telling us what it’s all about." And this process is what the award recognises.
Photo: Àngel Bravo
What was the main vision?
The vision was the thinking that bringing capital and entrepreneurs together did not have to be predatory. It had to be a contribution of the assets that make companies work: the team, the idea and the capital. In the end it was about seeing that capital does not have to come from the bank or a patron whose ring you have to kiss. It can come from people who are themselves more or less entrepreneurs, who are business angels who bring smart money.
“Bringing capital and entrepreneurs together did not have to be predatory”
The concept of smart money is used a lot, but what does it really mean?
For me it is the four Cs. A network of contacts, capital, knowledge (‘coneixement’ in Catalan) and a value chain. But I didn’t invent anything. In 2002 I attended a meeting of a lot of strange people in the Barcelona Stock Exchange, who had been brought together by a new business angels association. And that opened my eyes. After so many years I don’t know whether we’ve done a lot or not, but at least we have created an addendum to the PADRE programme; there is a button that I made them add! That was tax relief for business angels in their declaration. It is not much, but it allows for a 20% tax deduction on expenses of 30,000 euros.
How did that happen?
We began negotiating self-employment in Catalonia. We contributed benchmarking of everything done in Europe to help those who risk their money by providing incentives. Then I went to explain it to minister Antonio Bateta, of the Madrid Community, and a month after doing this it became known that in Catalonia it had been approved. And when the Entrepreneur Law was passed it was applied to the whole of Spain.
With all these years’ experience, what do you think makes a good business angel? There are all sorts of opinions out there...
I think that’s a good thing! There is one fundamental function, which is contributing capital. The entrepreneur is the horse and the business angel is the jockey. It is the horse that risks its life to win the race, but the jockey also takes away prizes. It is a combination in which it must be clear that the protagonist is the entrepreneur. Often you have to also bring another vision of the business, as many startuppers have only thought about the application they have made but not about the contracts, payment, etc. Sometimes it is the first time that entrepreneurs have checked the idea with a third party and it is one of the most exciting parts of it, especially when you make the evaluations.
“It was me who got an addendum to the PADRE!”
How much capital do you need to be a business angel?
It is not a question of amount. Once you risk your money you are risking a lot, even if it is just 3,000 euros. Anyone can do it and, in fact, I would recommend anyone to do it. It is something that doesn’t need much more than trust. The best trust is taking my wallet and putting it in your pocket!
Photo: Àngel Bravo