If we enter a negative interest rate environment is angel investing the way to go?

By Oliver Woolley, Envestors 

 The reality of  0.1% interest rates has been with us for some time, and now Bank of England policymakers have reported that the UK may enter an environment with negative interest rates

Should negative interest rates come in, banks would have the incentive to lend more by making loans cheaper, but account holders would likely be asked to pay to hold money in a savings account. 

While plans for negative interest rates are pending, government bonds are already selling at a negative yield of -0.003%, with investors hoping for the safe haven of government issued bonds paying out to get their money back in three years. 

Between negative returns on savings accounts, lower yield on bond holdings, a volatile stock market and a projected dip in property prices, investors don’t have many options to diversify their portfolio in a negative rate interest environment. 

However, for High Net Worth investors comfortable with risk, early-stage investing may be attractive. 

What is angel investing 

Angel investors (aka private investor, seed investor or angel funder) support early-stage enterprises by providing funding and getting actively involved in the business, providing know-how, introductions and strategic direction.  Typically, the amount invested is £5,000-£50,000 per investment.

Why might it be the answer?

Early-stage investments are high risk – previous research suggested that 56% of investments in early-stage companies went bust. This is why experienced angels aim to build a diverse portfolio of 20+ investments and usually look for a 2.5x Return of Investment (RoI). 

Initially many choose to join an angel network where investors can pool investment capital and invest alongside like-minded, experienced investors.

Hot investment sectors 

Reports from the British Business Bank and the UK Business Angels Association reveal that many investors are still seeing positive returns during the pandemic. 

While angels are battling economic uncertainty, around three quarters are optimistic about the market bouncing back within the next 12 months.

Healthcare, Digital Health and MedTech, BioTech, Life Sciences and Pharmaceuticals are the leading sectors in terms of investor engagement during the COVID-19 crisis.

Software as a Service and FinTech have fared well throughout the pandemic and are still attracting a large number of investors.


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To help get started there is an array of angel networks that can provide advice and support. Industry-association, the UKBAA, offers an Angel Investment Accelerator designed for those new to early-stage investing. 

HNWIs should look for the most active networks; Research body Beauhurst recently published a list of the most active networks in the UK.

Active networks will present a greater array of screened opportunities and connect new investors to more experienced ones.

The best networks cover a variety of regions, sectors and investment sizes, and they’re forthcoming with examples of previous investments, so helping first-time angels make the right choices while growing their portfolio.

With negative interest rates a possibility many may feel it requires a change in investment strategy and angle investing may be the way to go. 


Oliver Woolley is CEO and co-founder of Envestors. Envestors’ digital investment platform brings together entrepreneurs and investors across geographies, communities and sectors – creating the single marketplace for early stage investment in the UK.

Envestors partners with accelerators, incubators and angel networks to provide a white-label platform empowering them to promote deals, engage investors and connect to other networks.

Founded in 2004, Envestors has helped more than 200 high growth businesses raise more than £100m through its own private investment club.

Envestors is authorised and regulated by the UK Financial Conduct Authority.