UNH study finds fewer angels invested more in 2019

Drop in number of ventures getting capital also dropped, Center for Venture Research finds

Jeffrey Sohl is director of the UNH Center for Venture Research.

Shortly after eleasing an analysis showing that 2020 will be a rough one for angel investing, the Center for Venture Research at the University of New Hampshire has released its review of the 2019 market and it’s a mixed bag.

According to the center, the angel investor market in 2019 saw a decrease in active investors and the number of investments overall but an increase in the total dollars invested by angels. The change in total dollars combined with the decrease in the number of investments resulted in a deal size for 2019 that was significantly larger than in 2018, up 6.8%.

The center found that total angel investments in 2019 increased by 3.2% from 2018. But a total of 63,730 entrepreneurial ventures received angel funding in 2019, a decline of 3.6% from 2018 investments. In addition, the number of active investors in 2019 also fell to 323,365, a 3.3% decrease from the 334,565 in 2018.

In addition, seed and startup stage angel investments up stage made up 37% of the total in 2019, relatively unchanged from 2018. Angel investments in the early stage made up 43%, similar to 2018 allocations and total investments in the expansion and late stage made up 20.

The average angel deal size in 2019 was $374,225, an increase of 7% from 2018. The average equity received was 9.4% with a deal valuation of $4 million, a 38% increase from 2018.

“It is encouraging that the seed and start-up deals remained steady at more than one-third of market investments since angels are the leading source of risk capital for nascent entrepreneurs,” said Jeffrey Sohl, director of the center.

But, he added, “these valuation trends are likely an indication of upward pressure on valuations resulting in overvaluations in some sectors and/or regions of the angel market,” said Sohl.

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