Happy Times Are Here Again – Well, Almost!

Angel investors are very sensitive to the predictions of recovery in the market, because every false claim or ‘green shoots of recovery’ debacle knocks consumer confidence back further, delaying the chance of a true recovery that will benefit everyone. Whatever the market conditions, there will always be entrepreneurs seeking to launch or grow their businesses—but those conditions and the state of the market remain one of the most important things at which Angel investors will look before they get their chequebooks out.

Angel Investors Heartened at Unexpected Output Rises
The only constant in business is change and, in some cases, the changes are rather unexpected—even if they are most certainly welcomed. When the BBC reported recently on a surprise increase in the UK’s output, it underscored this tenet rather nicely.[1] This unexpected windfall replaced the dire predictions of a continued output fall that left Angel investors wondering just when they would see conducive market conditions again. Best of all, manufacturing rose in and of itself, making Angel investors and manufacturing entrepreneurs sit up and take note. After all, when the manufacturing sector is up, the rest of the industrial sector is likely to follow. In turn, a healthy industrial sector fuels the rest of the economy, and—voila!—recovery is virtually inevitable (or, at least, that’s the theory).

Alright, so the increase of 0.2 per cent may seem puny—but it was wholly unexpected and unaided, which might have a few economists scratching their heads for a while. Who’s to say that this upward trend won’t intensify—in spite of economists’ most dire predictions—and perhaps even continue for a prolonged period of time?


Adding the Consumer to the Recovery Equation
Of course, before Angel investors get too giddy at the good news and splash their cash around in a joyous release, we should remember to consider the consumer in all of this.

As an experienced Angel investor, you’ll know that no matter how high the output of the manufacturing sector might be, if consumers are not buying what you’re selling, it’s all for nothing. While supply is revving up, demand is still the variable in the equation that is most difficult to predict. Just a day earlier, the BBC suggested that, while the economic recovery was finally getting a bit of lift, we might just be hovering precariously close to the bottom for a while longer, making for what it terms ‘a bumpy ride’.[2] After all, if consumers fail to hold up their ends of the bargain, the manufactured goods will simply end up collecting dust on store shelves.

This might have Angel investors holding back for a while longer—but it’s interesting to note that now might actually be the time to loosen those purse strings and get behind a potentially successful business idea. What is more, entrepreneurs themselves should now be seizing the opportunity of picking up where top-heavy competitors lost out and fell flat on their faces. It is often during that time just before a recovery that it is best to invest. Angel investors can make up the missing capital in a potentially explosively profitable venture and, before long, new businesses will stud the economic landscape. Having learned their lessons from past companies’ business failures, their survival rates will be proportionately higher.

Angel investors and entrepreneurs working together to build new ventures breathes new life into the economy, which is now gradually, but tentatively, coming back. Any business that can establish itself now stands to profit from the returning consumers that are once again placing their confidence in companies that have either weathered the storm or sprung up during the downturn. Moreover, leaner and meaner business models make it possible for entrepreneurial spirits to push or pull the British economy back on its feet.