The number of licenses granted to angel investors, also known as individual participation capital in Turkey, reached 445 and, the largest segment of license holders, consist of capital owners and high-income investors.
According to data from the Undersecretary of Treasury, in 2013, the number of licenses provided to angel investors, who provide capital, knowledge and experience to enable the growth of startups, was 155. While 120 angel investors were granted licenses in 2014, the number decreased in 2015, 2016 and 2017, respectively dropping to 69, 68 and 33. Accordingly, the number of angel investor licenses over the last five years reached 455.
While 83 percent of license applications in this period were in the Marmara Region, the highest demand for angel investing is in Istanbul. The number of licenses granted for Istanbul was 346. This province was followed by 36 licenses in Ankara, 20 licenses in İzmir, 13 licenses in Bursa and three licenses in Kocaeli.
Looking at the experience level of license holders, 149 investors are experienced, 169 investors are capital owners and 127 investors have high income.
The average age of angel investors ranged from 35 to 50, while 68 percent of companies that received capital from angel investors were micro businesses, with 32 percent being small businesses.
As of December 2017, the total investment application in the individual participation capital system amounted to TL 11.4 million ($2.98 million), and TL 8.3 million of investment has been successfully realized.
Software and application development initiatives accounted for 49 percent of investment applications, while 18 percent came from e-commerce operations and database operations made up 9 percent of total investments.
Tax incentives have been influential in investments through individual participation capital.
Angel investors who partner with entrepreneurs with capital support can cut 75 percent or 100 percent of that capital from the income tax base.
The Science, Industry and Technology Ministry allows for the reduction of the entire capital of startups from the income tax base to encourage investments in firms that are supported within the framework of the Scientific and Technological Research Council of Turkey (TÜBİTAK) or the Small and Medium Industry Development Organization (KOSGEB) as these startups are innovation-driven, research- and development-focused and create high added value. Turkey ranks higher in terms of incentives provided for angel investors than the U.K., Italy, Spain, Germany, France, Singapore, Israel and some states in the U.S. Across the country, 13 angel investor networks operate, while 424 angel investors without licenses function through accredited networks.
