Through our partnership with the Angel Resource Institute and CB Insights, we are continuing to study angel group investment activity so entrepreneurs and investors have better access to information that will help them better understand angel investing and jump start their emerging businesses.
For the full year 2012, the survey showed a really important attribute of recent angel group investment activity: it's stable and consistent. When comparing 2012 to 2011, angel investors showed themselves to be a reliable source of early funding. There is a lot of uncertainty and risk involved in launching a company, that it's comforting to know that experienced investors are out there backing new deals and following them up as they grow. Of the investments included in the survey about half were in new deals, and the other half were in follow-up rounds. It's a good sign that new ideas are continuing to get funding and existing companies are as well. Investors are working with companies nationwide and acting responsibly. That's good news for startups.
There were several notable items from the 2012 report:
Median angel round sizes hit a five quarter high at $690K in Q4 2012 for the second quarter in a row, and ended the year at $600K, down from $625K in 2011 and up from $500K in 2010. When angel groups co-invest with other types of investors, the media round size is higher at $1.5M.
Pre-money valuations in early stage companies remain steady at $2.5M for both 2012 and 2011.
Mobile and telecom companies gained share of angel investment deals and dollars in 2012, responsible for 13% of all investment deals and receiving 14% of angel group dollars, which was more than doubled its share in 2011. Internet and healthcare companies still receive more than half of angel group investments, although healthcare investments dropped significantly from 35% share in 2011 to 27% in 2012.
Sixty three percent of companies that received angel group investment had revenue and 44% were follow-on rounds, as opposed to new investments.
Most Active Angel Groups
Congratulations to the New York Angels, who jumped right to the top of the list for their first showing. We also show a breakdown of the most active angel groups by region in the full report. Take a look at page 9.
Companies in the Northwest and Southwest regions of the US grew their share of both angel deals and dollars over 2011. California and New England continue to see the majority of deals and investments, yet 69% of angel investment deals are done outside those regions. Share of investments in California companies dropped from 31% in 2011 to 23% in 2012. Investments in New York remained flat.
We would like to invite any angel investors who are not already participating in the Halo Report quarterly survey, to reach to us. We'd love to include your story.
For the details on angel investment activity, read more here.