Angel Investment Groups Increase Early Stage Pre-Money Valuations, Cut Round Sizes in 2012

KANSAS CITY, Mo., SANTA CLARA, Calif. and NEW YORK, Sept. 25, 2012 /PRNewswire/ -- The Angel Resource Institute (ARI), Silicon Valley Bank (SVB) and CB Insights released the latest edition of the Halo Report, a national survey of angel group investment activity, covering the first half of 2012 today.  

(Photo:  http://photos.prnewswire.com/prnh/20120925/SF80240-INFO)

Halo Report Highlights for 1H 2012, unless otherwise noted: (Infographic)

• Pre-money valuations increased for pre-Series A deals by angel groups to $2.7 million in Q2, up from $2.5M in Q1, based on the trailing 12 months
• Median angel round sizes dropped 21% to $550K over 1H 2011, returning to 2010 round amounts
  • Median round size is $1.5M when angle groups co-invest with other investor types
• Internet companies received more total dollars than healthcare companies for the first time
  • 52% of angel group investments were in healthcare and internet companies combined
  • Internet companies received 34% of the angel group dollars
• The Southwest and Great Plains regions increased both share of deals and dollars over 1H 2011
• The most active angel groups (deals) were Tech Coast Angels, Central Texas Angel Network, Launchpad Venture Group, Golden Seeds, Sand Hill Angels, and Investors' Circle
• The biggest investors among angel groups (dollars) were Tech Coast Angels, Central Texas Angel Network, Sand Hill Angels, Golden Seeds,  Launchpad Venture Group, Alliance of Angels,
• Arizona Technology Investor Forum, Common Angels, Desert Angels and Atlanta Technology Angels

"The Halo Report sheds light on investing that is often critical to entrepreneurs' success, but very hard to track," said Robert Wiltbank, Vice Chair of Research for ARI. "With this data, entrepreneurs have a much better sense of how to interface with angel investors, and investors have a much better sense of 'the market.'"

"As more angels participate each quarter, we are identifying trends and practices that help entrepreneurs and investors make better decisions and to more effectively create great new companies," said Carrie Walsh, Managing Director for Silicon Valley Bank's Entrepreneur Services Group.

"Angel investors seem to be following a trend similar to the one we've witnessed recently in the venture capital market: Internet and Mobile are increasingly becoming attractive areas for investment while Healthcare is seeing its share decrease in terms of both deals and dollar," said Jonathan Sherry, Co-Founder of CB Insights.

Angel investors, those who invest their own funds and expertise directly into startup companies, appear to be taking on an increasingly important role in driving entrepreneurship throughout the United States.  Their investments are in startups and young companies, which have been cited by the Kauffman Foundation as the key source of net new jobs in the country.  Nationwide, these angel group investments have opened up new opportunities for centers of innovation and entrepreneurship. 

The Halo Report 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 via survey and aggregation of public data using CB Insights innovative data analyses. The 1H 2012 Halo Report data is based on 342 deals totaling $467.7 million dollars invested.   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.

Angel groups and individual angel investors interested in including their data in the Halo Report should contact Sarah Dickey, ARI Research Director, for details.  She can be reached at 913-894-4700 and [email protected].

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 27 U.S. offices and seven 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.

SOURCE Silicon Valley Bank; CB Insights; The Angel Resource Institute