The Angel Resource Institute (ARI), Silicon Valley Bank (SVB) and CB Insights this week released the Q3 2013 Halo Report, a national survey of angel group investment activity, finding median round sizes down to $520K per deal, healthcare round sizes up, and a larger share of deals and investment dollars going to mobile companies. Together Internet, healthcare and mobile companies received 81% of dollars invested by angel groups in Q3.
The Great Lakes region in the US saw the largest increase in share of deals, and the biggest drop in share of dollars over Q2 2013. California-based angel groups retained the lead in the number of deals, and New England-based angels continued to invest the most during the quarter. US angel investment continues to be dispersed nationwide and, of the 10 most active angel groups in the quarter, Hyde Park Angels, Life Science Angels and Wisconsin Investment Partners are new to the list.
“The big three – Internet, healthcare and mobile – continue to dominate the interest of angel groups, and we noticed a particular spike this year for healthcare companies,” said Rob Wiltbank, Vice Chairman of Research, Angel Resource Institute. “Despite the downward trend in round sizes overall and the drop in total dollars into healthcare for the quarter, we noticed a significant jump in full year round sizes for the healthcare industry – a trend we’ll continue to watch.”
Halo Report Q3 2013 Highlights
Round Sizes: Median angel round sizes were still down for the second consecutive quarter at $520K, following a peak of $700K in Q1 2013 and three prior quarters of growth. When angel groups co-invest with other types of investors, the median round size is still trending higher to $2M in Q3 from $1.95M in Q2 and $1.4M in Q1.
Valuations: The most consistent finding in the report is median pre-money valuations in early-stage companies, which remain steady at $2.5M for the year.
Most Active Angel Groups: Based on total deals, the 10 most active angel groups in Q3 were (alphabetic order) Alliance of Angels, Golden Seeds, Houston Angel Network, Hyde Park Angels, Investors’ Circle, Launchpad, Life Science Angels, Sand Hill Angels, Tech Coast Angels, and Wisconsin Investment Partners.
Locations: Seventy-four percent of deals were completed in the angel groups’ home state in Q3, remaining consistent over the year.
Geography: Approximately one-third of all angel group deals consistently occur in California and New England, and the share of dollars invested in these regions increased over the prior quarter and year over year to 44% in Q3. The Great Lakes region saw the biggest gain in share of deals, and the biggest drop in share of dollars in the quarter with 14% of all deals and 5.3% of the dollars.
Sectors: Together, Internet, healthcare and mobile companies comprised an even higher percentage of angel group deals (76%) and received 81% of angel group dollars, an increase from Q2 and the prior year. Mobile companies saw the largest increase over other sectors in share of deals and dollars in Q3.
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. The Q3 2013 Halo Report data is based on 278 deals totaling $445 million in total rounds including co-investors. 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.
Sponsors of the Report are the Angel Resource Institute (ARI), a charitable organization devoted to education, mentoring and research in the field of angel investing; Silicon Valley Bank is the premier bank for technology, life science, cleantech, venture capital, private equity and premium wine businesses; and CB Insights, a National Science Foundation backed data as a service firm.
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