‘Encouraging’ trend continues in angel investment

UNH Center for Venture Research: More dollars gong to seed, startup firms

The angel investor market in 2013 continued the “encouraging” trend it started in 2010 in investment dollars and in the number of investments, according to the 2013 Angel Market Analysis released by the Center for Venture Research at the University of New Hampshire.

According to the analysis, angels increased their investments in the seed and startup stage, with 45 percent of 2013 angel investments in the seed and start-up stage, up from 35 percent in 2012. Angels also exhibited an increased interest in early stage investing with 41 percent of investments in the early stage, up from 33 percent in 2012.

“This increase in the seed/startup stage is an encouraging sign since seed capital is the stage of need for our nation’s entrepreneurs,” according to Jeffrey Sohl, director of the UNH Center for Venture Research.

Angel investments continue to be a significant contributor to job growth with the creation of 290,020 new jobs in the United States in 2013, or 4.1 jobs per angel investment, according to the analysis.

Total investments in 2013 were $24.8 billion, an increase of 8.3 percent over 2012. A total of 70,730 entrepreneurial ventures received angel funding in 2013, an increase of 5.5 percent over 2012 investments, and the number of active investors was 298,800, an increase of 11.4 percent from 2012. “The $24.8 billion in total investments is close to the market high of $26 billion that occurred in 2007,” Sohl said.

“The increase in both total dollars and the number of investments resulted in a deal size for 2013 that was slightly higher than in 2012. These data indicate that angels were active investors, but those who did invest decreased their individual investments slightly, from $85,435 in 2012 to $83,050 in 2013, a decrease of 2.8 percent.”

Software remained the top sector position with 23 percent of total angel investments in 2013, followed by media (16 percent), healthcare services/medical devices and equipment (14 percent), biotech (11 percent), retail (7 percent), and financial services (7 percent). The jump in media investments from sixth place in 2012 to second in 2013 is a reflection of the growing investor interest in social media and applications.

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