Halo Report – Angel Group Investment Trends (Q2-2013)

Angel Groups Syndicate 3 Out of Every 4 Deals

The Angel Resource Institute (ARI), Silicon Valley Bank (SVB) and CB Insights released the Q2 2013 Halo Report a national survey of angel group investment activity, which finds median angel round sizes down to $590,000 per deal, median pre-money valuations remaining stable at $2.5 million and 74% of deals are syndicated. When angels co-invest with other types of investors the median deal size is $1.95 million.

US angel investment continues to be dispersed nationwide and the most active angel groups in the quarter are:
Central Texas Angel Network
Golden Seeds
Desert Angels
Dingman Center Angels
Tech Coast Angels
Alliance of Angels
Houston Angel Network
Launchpad Venture Group
New York Angels
Sand Hill Angels

For the first time, the report separates Texas, which has 11% of angel group deals in Q2, behind California, New England and the Southeast. New England-based angel groups closed deals worth slightly more than deals in California in Q2. The sectors getting funding remain concentrated in Internet, healthcare and mobile, with 71% of completed Q2 deals and 79% of Q2 dollars in these categories.

“Clearly, angel groups are successfully syndicating opportunities, ” said Rob Wiltbank, Vice Chairman of Research, Angel Resource Institute. “Syndication remains highly concentrated geographically, as with formal venture capital, but with growing online angel activity, it will be interesting to see how this changes in the future.”

Halo Report Q2 2013 Highlights:

Round Sizes
Median angel round sizes were flat year-over-year, but dipped to $590K in Q2, from $700K in Q1 and after three quarters of growth. When angel groups co-invest with other types of investors, the median round size is trending up to $1.95M in Q2 from $1.4M in Q1. Seventy-four percent of angel group deals are syndicated.

Valuations
Pre-money valuations in early stage companies remain steady at $2.5M, but they are creeping downward, with both the high and low end of the distribution declining.

Locations
Seventy-two percent of deals were completed in the angel groups’ home state in Q2, dipping slightly from Q1, but remaining fairly consistent over the course of the prior year.

Geography
Seventy percent of angel group deals in Q2 were completed outside California and New England, although 36% of dollars are invested in these regions, which is a nearly ten point gain over the prior quarter and year. California led in number of deals, with 17% share of angel group investments, but was edged out slightly by New England in the total dollars invested during the quarter.

Sectors
Together, Internet, healthcare and mobile companies completed 71% of angel group deals and received 79% of angel group dollars, an increase from Q1 and the prior year.

The Halo Report includes aggregate analysis of investment activity by angels and angel groups and highlights trends in round sizes, location and industry preferences. The data is collected via survey and aggregation of public data using CB Insights innovative data analyses. This Halo Report data is based on 379 deals totaling $461 million dollars invested in the first half of 2013. The transaction details are available in the CB Insights subscription database for users to review and analyze themselves. Academics may also access some of the data through ARI.

PDF Report: http://www.angelcapitalassociation.org/data/ACEF/HaloReport1H2013final.pdf

The Angel Resource Institute (ARI) is a charitable organization devoted to education, mentoring and research in the field of angel investing, a growing driver of our entrepreneurial economy. ARI was founded by the Ewing Marion Kauffman Foundation. The programs of ARI include educational workshops and seminars, research projects and reports, and information about angel investing for the general public. ARI is affiliated with the Angel Capital Association, the professional association of angel groups in North America.

Learn More: http://www.angelresourceinstitute.org

Silicon Valley Bank is the premier bank for technology, life science, cleantech, venture capital, private equity and premium wine businesses. SVB provides industry knowledge and connections, financing, treasury management, corporate investment and international banking services to its clients worldwide through 27 US offices and six international operations. Silicon Valley Bank is the California bank subsidiary and the commercial banking operation of SVB Financial Group. Banking services are provided by Silicon Valley Bank, a member of the FDIC and the Federal Reserve System. SVB Financial Group is also a member of the Federal Reserve System.

CB Insights is a National Science Foundation-backed data-as-a-service firm that collects information on private companies and their investors and acquirers. CB Insights data and technology is used by firms to make better marketing, procurement, lending, acquisition and equity investment decisions and to gather data-driven market and competitive intelligence. The firm’s data is regularly cited by leading media publications including the New York Times, Forbes, Bloomberg BusinessWeek and Fast Company among others.

SOURCE: Angel Resource Institute (ARI)