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  ACAAngelSummit, 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.

The full report is available at www.svb.com/halo-report , http://www.angelresourceinstitute.org/halo-report/ , and www.cbinsights.com .

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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World’s Largest Gathering of Angel Investors to Converge This Month on Washington, DC

Dramatic changes in angel investing mean both threats and opportunities for the angel investment community and the tens of thousands of entrepreneurs they support, according to the Angel Capital Association (ACA), the world's leading professional association for angel investors. The global angel investing community will debate and assess this new environment at the 2014 ACA Summit, "Angel Impact: Entrepreneurial and Economic Success," March 26-28, 2014, in Washington, D.C.

U.S. angel investors – individuals who support startup companies with passion, experience and funding - in 2012 invested nearly $23 billion in about 67,000 ventures, according to estimates by the Center for Venture Research at the University of New Hampshire. Their impact on the economy is huge, as the kinds of innovative startups angels invest in create all of the net new jobs in the country, according to reports by the Census Bureau and Kauffman Foundation.

"This is the place to be for both experienced and (especially) new angels who want to share great ideas, to learn unique investment practices from each other, and don't want to be left unaware of how the seed stage investment landscape is changing - particularly from a regulatory perspective,” said David Verrill, ACA’s chairman.  "We are hosting this meeting in Washington, D.C. for a reason - the Securities and Exchange Commission is not only assessing the underlying definition of who can be an accredited investor, but is also reviewing significant rules around the JOBS Act involving general solicitation and online crowdfunding platforms. Now more than ever is the time to join with angel colleagues to learn about, to shape, and to nurture this powerful economic engine."

This ACA Summit is the world’s largest annual gathering of accredited angel investors. More than 700 angel investors, including those among the most active, sophisticated and successful in the world, will share expert advice and ideas. The Innovation Showcase, a related event at the Summit, will show angels in action when dozens of promising startups will receive invaluable advice and feedback from angels.

Discussions will include:

·         New and proposed federal rule changes, including a potential change to the definition of an "accredited investor," which could dramatically reduce capital available to startups and eliminate as many as 60 percent of the current accredited investor population, dramatically affecting the economy and job creation.

·         Congressional leaders, including Sen. Chris Murphy (D-Connecticut), will discuss how they support angel investing and its vital role in innovation and the American economy.

·         Insight into tactics angels deploy to identify the best investment opportunities in top industries including life sciences and medical devices, information technology and internet, cleantech and cyber security.

·         2013 angel group deal trends, collected from more than 200 angel groups, will be shared by Rob Wiltbank, VP of research at the Angel Resource Institute (ARI), with the live release of the 2013 Halo Report, by ARI and Silicon Valley Bank, with data powered by CB Insights.

·         Compelling stories, including from Blackboard co-founder Michael Chasen, who will recount how he took his learning management system company from angel backing to IPO.

·         New accredited online platforms are disrupting the angel investing market. Leading platform companies including premier sponsor FundersClub will lead the discussion.

·         Which are the most angel-friendly countries in the world --  and how is angel investing helping spur their economies?

To attend the ACA 2014 Summit, register here. Registration is open to ACA members and accredited individual investors from around the world, as well as accelerator and incubator leaders, university innovation professionals, economic development leaders, and public policy makers.

Note:  Your Editor, having been among the founders of the ACA, could not be more pleased with their activities.

About Angel Capital Association (ACA)

The Angel Capital Association is the leading professional and trade association focused on fueling the success of accredited angel investors and portfolio companies in high-growth, early-stage ventures. ACA is the voice of the angel industry, providing comprehensive services in support of members working in angel groups, through portals and individually. ACA provides professional development, public policy advocacy and significant benefits and resources to its membership of 220 angel groups and more than 12,000 individual accredited investors. www.angelcapitalassociation.org; @ACAAngelCapital.