History

The AAAI was formed in 2007 to drive the growth, success and sustainability of angel investing as a professional practice of private capital in Australia.

As with all such achievements there were significant efforts by key individuals for a number of years prior to formation. Those efforts brought together a founding team and they shaped the intellectual and policy foundations of the association.

With the seminal influences being from individuals already experienced and successful in early-stage investing the AAAI was born with a professional focus and strong commitment to the support and education of angel investors. As an Australian enterprise the AAAI understood the need for international relationships from the outset and through its founders rapidly established links with peer organisations all over the world. Indeed, the AAAI became a founding member of the World Association of Business Angels with a seat on the executive of the new global body.

A key tenet of the AAAI is to identify, describe and promote best practice. A hallmark of best practice angel investment the world over has been the trend to collaborate in angel groups.

Angel investing had been going through a period of marked growth and change around the world since the rise and fall of the dot com bubble. In the latter half of the twentieth century most angel activity was undertaken by individuals who did occasionally, on a case-by-case basis, syndicate their investments. With the rise of the dot com bubble a new pattern emerged and angels started to form groups. Angel groups gave their members access to deeper financial resources and broader scope for investment. The sharing of experience, expertise, networks and time meant that angel groups could consider a broader range of investments and a greater number of investments, achieving the significant benefits of diversification sought by any prudent investor.

The success of angel groups was evident in Europe, Canada and the USA and the resilience of a group became obvious as the dot com bubble burst. The benefits of collective action and shared resources attracted more angel investors. The growth of angel investment, in turn, encouraged governments to seek ways to facilitate this important flow of private capital into high growth enterprises, the engine room of their economies. Two of the government initiatives that have proved effective and sustainable are the prudent application of capital gains/losses tax treatments and the provision of co-investment funds. To date neither of these proven and highly effective initiatives has been implemented in Australia.

Australian angel groups first formed in Melbourne in the late 1980s but, angel investment was poorly understood by the Australian business community and there was little popular support. As elsewhere, the dot com bubble at the turn of the century changed the local scene and a small number of angel groups were formed in Melbourne, Canberra, Adelaide and Sydney in the late 1990s and early 2000s. At the formation of the AAAI the surviving angel groups were in Melbourne, Canberra, Adelaide and Brisbane, typically about four years old and comprised memberships of around twenty people.

While working to establish the AAAI the founding team were responsible for fostering the formation of new angel groups in Brisbane, the Gold Coast and Melbourne. After its inception the AAAI commenced fostering new angel groups in Sydney, Adelaide, Hobart, Launceston and Perth.