Cautious Optimism in U.S. Angel Market

A pair of reports coming out in the last week point paint a picture of a fairly stable angel investing market in the U.S. The Q2 2013 Halo Report from the Angel Resource Institute and the Q1 Q2 2013 Angel Market Report from the Center for Venture Research suggest that year-on-year numbers were either fairly flat or trending upward slightly.

The Halo Report—released in partnership with Silicon Valley Bank and CB Insights—showed that median angel round sizes decreased to $590,000 per deal matching the Q2 figure from 2012. The report shows that the sectors getting funding remain concentrated in Internet, healthcare and mobile, with 71% of completed Q2 deals and 79% of Q2 dollars in those categories. New England was the most active region with 18.7% of Q2 dollars—followed by California (17.1%), the Great Lakes (14.5%), Southeast (10.1%), Great Plains (9.7%), Mid-Atlantic (8.9%), Texas (6.1%), New York (5.9%), Northwest (4.6%) and Southwest (4.5%). 

The University of New Hampshire’s Center for Venture Research points to a slight increase in the number of total investments—$9.7 billion, an increase of 5.2 percent over the same period in 2012—as one of the “signs that sustainable growth has taken hold.” The report also shows that angel investments continue to be a significant contributor to job growth, with the creation of 111,500 new jobs in the United States in the first half of 2013, or 3.9 jobs per angel investment.

“Historically angels have been the major source of seed and start-up capital for entrepreneurs, and while this stabilization in seed and start-up investing is an encouraging sign, it has remained consistently below the pre-2008 peak of 55 percent, signifying that there continues to be a need for seed and start-up capital for both new venture formation and job creation,” said Jeffrey Sohl, director of the UNH Center for Venture Research at the Peter T. Paul College of Business and Economics.

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