THE ANGEL INVESTOR MARKET IN 2009:
HOLDING STEADY BUT CHANGES IN SEED AND STARTUP INVESTMENTS
The Center for Venture Research at UNH has released a report [PDF] on the angel investor market in 2009. The report indicates that angels haven’t significantly decreased investment activity. But they’re committing fewer dollars due to lower valuations and a cautious approach to investing.
The report also highlights the significant changes in the critical seed and startup stage investment landscape.
- Total investments in 2009 were US$17.6 billion, a decrease of 8.3% over 2008.
- A total of 57,225 entrepreneurial ventures received angel funding in 2009, a reserved 3.1% increase from 2008.
- The number of active investors in 2009 was 259,480 individuals, virtually unchanged from 2008.
- A decline in deal size of 11.1% from 2008 (as a result of the small decline in total dollars and the increase in number of investments).
- Mergers and acquisitions represented 54% of the angel exits.
- Bankruptcies accounted for 40% of the exits in 2009.
- 250,000 new jobs created due to angel investments, or 4.4 jobs per angel investment. This represents approximately 5% of new jobs in the US in 2009.
Stage
- Seed and startup investments accounted for 35% of 2009 angel investments, a decrease of 10% from 2008.
- Post-seed/startup investing represented 62% of investments, an increase from 2008, indicating angels’ increased interests in the early and expansion stage.
- New, first sequence, investments represented 47% of 2009 angel activity, a significant decline from the last 2 years.
Sectors
As a percentage of total investments in 2009.
- Software (19%)
- Healthcare Services/Medical Devices and Equipment (17%)
- Industrial/Energy (17% — significant increase from 2008, reflecting a growing appetite for green technologies)
- Retail (9%)
- Biotech (8%)
Women
- Women angels represented 11.3% of the angel market.
- Women-owned ventures accounted for 21% of the entrepreneurs that are seeking angel capital.
- 9.4% of these women entrepreneurs received angel investment in 2009.
- Both the number of women seeking angel capital and the percentage that receives angel investments are low compared to the overall market.
- These data indicate that when women do seek angel capital they lag behind the market yield rate by 5%.
