Thursday, March 27, 2014

HALO Report Reveals Angel Group Investing Trends for Full Year 2013: Investment Sizes and Valuations Rise




The Halo Report, released today, finds angel group activity rising with more high-valuation deals closed in 2013 than the previous year. While median round sizes held steady at $600K per deal, they were at a three year high when angels co-invested with non-angels.  The share of angel investment in Internet, healthcare and mobile startups continued to increase. Golden Seeds, Tech Coast Angels, and Houston Angel Network, which is new to the list, were the three most active angel groups in 2013.

“The angel investing market is showing early signs of warming up, with co-investment round sizes and valuations trending upward to three year highs,” said Rob Wiltbank, Vice Chairman of Research, Angel Resource Institute.  “With a continued progression toward more even distribution of investments nationally, entrepreneurs throughout the country are likely to find it easier to access angel investors for critical early stage funding.”

The largest share of angel deals (19%), with the greatest amount of investment (20%), continues to occur in California, yet overall deals are becoming more evenly distributed across the rest of the nation. The dollars invested, however, remain more concentrated.  In 2013, 67% of angel group dollars were invested in the top five out of ten regions: California, New England, Great Lakes, Mid-Atlantic and the Southeast.  The same five regions completed 63% of the deals.

Halo Report 2013 Highlights:

Round Sizes
Median angel round sizes remained steady over a three year period and were $600K for 2013. When angel groups co-invest with other types of investors, the median round size reached $1.7M, which was a three-year high, but fell in Q4 following an upward trend earlier in the year.  

Valuations
The most consistent finding in the report is median pre-money valuations in early-stage companies, which remain steady at $2.5M year over year. However, 2013 saw more high-valuation deals close than 2012, despite the consistent median.  

Most Active Angel Groups
The ten most active US angel groups were, in order:
Golden Seeds
Tech Coast Angels
Houston Angel Network
Central Texas Angel Network
Sand Hill Angels
Launchpad Venture Group
New York Angels
Desert Angels
Investor Circle
Alliance of Angels

Geography
Year over year, only New York and the Mid-Atlantic region gained a larger share of both deals and dollars in 2013. By the same measure, New England and the Northwest produced a smaller share of deals and invested dollars than they had the prior year. California and the Great Lakes led in share of deals in 2013, while California and New England led in share of dollars invested.

Sectors
Together, Internet, healthcare and mobile companies comprised an even higher percentage of angel group deals (74%) and angel group dollars (79%), a significant increase from the prior year. Internet companies saw the largest increase over other sectors in share of deals and dollars in 2013.

The trends above can be viewed here in this Infographic

About the report
The Halo Report, introduced today to the 620 attendees at the  , 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 directly by the Angel Resource Institute (ARI)  and aggregated with public data using CB Insights innovative data analyses. The 2013 Halo Report data is based on 884 deals totaling $1.1 billion 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
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. More information is available at 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 28 US offices and six international operations.  (Nasdaq: SIVB) www.svb.com.

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.  For more information, visit http://www.cbinsights.com.

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