Halo Report Q1 2013

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The Halo Report is a nationwide survey of Angel Groups' investment activity produced by the Angel Resource Institute, Silicon Valley Bank and CB Insights. The Q1 2013 Halo Report shows angel investment round sizes are trending up to a median of $680K per deal, pre-money valuations remain stable at $2.5 million and most angel investment happens in angel groups’ home states. US angel investment continues to be dispersed nationwide, and in the first quarter entrepreneurs in the Southwest region of the country received a slightly larger share of angel investment than startups in California, for the first time. The sectors getting funding remain concentrated in Internet, healthcare and mobile, with 72% of completed Q1 deals in these categories.

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Halo Report Q1 2013

  1. 1. Angel Group Update: Q1 2013
  2. 2. Table of Contents Q1 2013 Highlights p. 4 National Trends p. 6 Most Active Angels p.11 Regional Trends p. 14 Sector Trends p. 19 About the Halo Report p. 22About the Halo Report p. 22 2
  3. 3. Q1 2013 Highlights 3
  4. 4. Angel Group Update: Halo Report Q1 2013 Most Active Angel Groups – Total Deals Q1 •Alliance of Angels •Desert Angels •Golden Seeds •New York Angels •Sand Hill Angels •St. Louis Arch Angels Highlights • Median Angel Round Size trends up to $680K in Q1 2013 • Early Stage Pre-Money Valuations Remain Stable at $2.5M Biggest Spenders – Most Dollars Per • 81% of deals occur in angel groups’ home states 4 Biggest Spenders – Most Dollars Per Deal, past 12 months •Golden Angels Investors •Golden Seeds •Houston Angel Network •JumpStart New Jersey Angel Network •Nashville Capital Network •Oregon Angel Fund •Tech Coast Angels
  5. 5. National Trends 5
  6. 6. Median Angel Round Size Q1 2013 Trends up to $680K $1.00 $860K $830K $760K $900K $800K $550K $550K $570K $650K $680K $M $0.00 $0.50 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Median Round Size Mean Round Size 6 *Angel rounds include angels & angel groups only $550K $550K $570K
  7. 7. Median Early Stage Pre-Money Valuation Rolling Year Steady at $2.5M (Q1 2013) $2.5M Median $1.5M 1st Quartile $3.6M 3rd Quartile $5.5M 7 *Including all rounds with angel groups before Series A 1st Quartile $0.11M
  8. 8. Angels with Other Investors Q1 2013 Median Round Size $1.5M when Angel Groups Co- Invest with Other Types of Investors $1.50 $1.47 $1.63 $1.44 $1.50 $1.94 $2.28 $2.57 $2.38 $2.05 $1.50 $2.00 $2.50 $3.00 $M $0.00 $0.50 $1.00 $1.50 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Median Round Size Mean Round Size 8
  9. 9. Angel Groups Invest Close to Home 81% of deals completed in the home state of investor group & company 71% 76% 79% 72% 81% 84% 87% 87% 80% 88% 70% 80% 90% 100% # 40% 50% 60% 70% Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Investor & Company in Same State Investor & Company in Same Region 9
  10. 10. Active Angel Groups 10
  11. 11. Most Active Angel Groups Q1 2013 – Total Deals 5th Seattle, WA NY, MA, CATucson, AZ 11 Sunnyvale, CANew York, NY St. Louis, MO
  12. 12. Most Active Angel Groups – Greatest Dollars Invested Per Deal over past 12 Months NY, MA, CA Houston, TX Milwaukee, WI 12 Each of the noted groups has invested in at least 5 deals in past 12 months. Southern CA Nashville, TN Portland, ORMount Laurel, NJ
  13. 13. Regional Trends 13
  14. 14. Angel Group Deals Distributed Nationally Share of Angel Group Deals by Region Q1 2013 California 15.5% Northwest 8.8% Southwest Great Plains 9.3% Great Lakes 12.9% Mid-Atlantic 10.8% New England 11.3% New York 11.3% 14 Southwest 12.9% Southeast 6.2%
  15. 15. 10.8% 13.3% 14.9% 14.4% 12.9% 8.8% 9.4% 8.8% 9.5% 7.8% 10.8% 3.9% 9.3% 7.4% 7.2% 11.3% 50% 60% 70% 80% 90% 100% AK / HI / PR New York Great Plains Mid-Atlantic Northwest 3.9% Q1 2013 Share of Angel Group Deals by Region Q4 2012Q1 2012 Q1 2013 14.9% 17.8% 15.5% 16.9% 12.8% 11.3% 10.8% 13.3% 6.2% 10.8% 13.3% 12.9% 0% 10% 20% 30% 40% 50% Southwest Great Lakes Southeast New England California 15
  16. 16. Southwest Edges out California in Share of Dollars in Q1 2013 Share of Angel Group Dollars by Region Q1 2013 California 17.4% Northwest 6.4% Southwest Great Plains 10.3% Great Lakes 11.6% Mid-Atlantic 6.7% New England 13.0% New York 7.7% 16 Southwest 18.1% Southeast 8.6%
  17. 17. 15.3% 15.2% 15.8% 18.1% 8.4% 5.8% 6.4% 13.1% 11.8% 6.7% 2.3% 10.3% 7.6% 5.0% 7.7% 50% 60% 70% 80% 90% 100% New York Great Plains Mid-Atlantic Northwest Southwest 3.7% Q1 2013 Share of Angel Group Dollars Q4 2012Q1 2012 Q1 2013 10.1% 14.1% 17.4% 19.2% 16.0% 13.0% 7.7% 13.9% 8.6% 14.8% 15.3% 11.6% 0% 10% 20% 30% 40% 50% Southwest Great Lakes Southeast New England California 17
  18. 18. Sector Trends 18
  19. 19. 22.4% 13.0% 13.2% 16.6%3.4% 2.9% 6.2% 8.2% 5.2% 4.1% 7.5% 3.4% 4.1%6.2% 1.7% 3.1% 14.4% 14.9% 10.4% 50% 60% 70% 80% 90% 100% Other Energy & Utilities Consumer Pdcts & Svcs Industrial Software (non- Internet, Healthcare & Mobile Deals Combine for 72% of Q1 2013 Deals Q1 2013 Share of Angel Group Deals by Sector Q4 2012Q1 2012 Q1 2013 32.2% 36.2% 36.8% 15.1% 22.4% 18.7% 0% 10% 20% 30% 40% 50% Software (non- internet/mobile) Mobile & Telecom Healthcare Internet 19
  20. 20. 14.7% 14.1% 12.8% 2.0% 1.4% 8.5%8.3% 6.8% 7.0%4.1% 3.0%7.5% 4.1% 14.2% 15.5% 10.3% 50% 60% 70% 80% 90% 100% Other Energy & Utilities Consumer Pdcts & Svcs Industrial 2.1% Q1 2013 Share of Angel Group Dollars by Sector Q1 2012 Q4 2012 Q1 2013 32.8% 25.8% 31.8% 16.5% 32.1% 22.6% 0% 10% 20% 30% 40% 50% Software (non- internet/mobile) Mobile & Telecom Healthcare Internet 20
  21. 21. About the Halo Report™ 21
  22. 22. What is the Halo Report™? Angel Group Investment Trends: The Angel Resource Institute, Silicon Valley Bank and CB Insights set out to raise awareness of early stage investment activities by angel investment groups. The Halo Report is the result. The research series highlights angel investment activity and trends in North America and provides much sought after data that has not been previously available to entrepreneurs or early stage investors. 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. Get Involved: Angel groups and individual angel investors interested in including their data in the Halo Report should contact Sarah Dickey, ARI Vice-President of Research: 913-894- 4700 and sdickey@angelcapitalassociation.org. 22
  23. 23. Understanding the Data: Special Round Types and Industry Sectors The Halo Report™ provides analysis and trends on US angel and angel group activity. Angels and angel groups invest alone, together, and with many other types of investors. Unless otherwise noted the Halo Report data includes all rounds that have at least one angel group participating and may include other types of investors in those rounds. This report discusses angel group investment trends for Q1 2013, which represents a total of 207 deals and $222M in total rounds including co-investors. A few charts report on an “Angel Round,” a special classification of investment when angel groups invest alone or just with other angels and angel groups. Unless otherwise noted, values of less than <1% are included, but are not labeled or noted as a change in activity. 23 Internet Mobile & Telecom Software Energy & Utilities Computer Hardware & Services Healthcare Industrial Automotive & Transportation Business Products & Services Consumer Products & Services Electronics Environmental Services & Equipment Financial Services Food & Beverages Leisure Media Metals & Mining Retail Risk & Security Halo Report Industry Sectors
  24. 24. Angel Resource Institute Sarah Dickey, sdickey@angelcapitalassociation.org 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 Carrie Walsh, cwalsh@svb.com 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 28 U.S. offices and six Halo Report Contacts corporate investment and international banking services to its clients worldwide through 28 U.S. offices and six 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 Anand Sanwal, asanwal@cbinsights.com 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, BusinessWeek and Fast Company among others. For more information, visit http://www.cbinsights.com. 24
  25. 25. Angel Resource Institute and Silicon Valley Bank co-produce the Halo Report™ with data powered by CB Insights. Angel Resource Institute and CB Insights are independent third parties and are not affiliates of Silicon Valley Bank. This material, including without limitation to the statistical information herein, is provided for informational purposes only. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decision. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation, offer or recommendation to acquire or dispose of any investment or to engage in any other transaction. ©2012 SVB Financial Group. All rights reserved. SVB>, SVB Financial Group, and Silicon Valley Bank are registered trademarks. 25

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