Angel Group Update: Q3 2013
Table of Contents
Q3 2013 Highlights p. 3
National Trends p. 5
Most Active Angels p.11
Regional Trends p. 12
Sector Trends...
Q3 2013 Highlights

3
Angel Group Update: Halo Report Q3 2013

Highlights

10 Most Active Angel Groups
Total Deals Q3

•Angel Round Size Still D...
National Trends

5
Median Round Size Still Down from Peak in Early 2013
$M

$970K

$1.00

$900K

$870K

$680K

$700K

$840K

$770K
$600K
$510...
Round Size Trending up to $2M when Angel Groups Co-Invest
with Other Types of Investors
$M

$2.83

$3.00

$2.52
$2.50

$2....
Healthcare Round Size Jumps Over 2012
Median Round Sizes for Angel Groups in Top Sectors

$M

$1.50

$1.50

$1.10

$1.10
$...
Median Early Stage Pre-Money Valuation Steady at $2.5M
Rolling Year Q3 2013

$2.5M
$1.2M

Median

$3.0M
3rd Quartile

$6.4...
Angel Groups Invest Close to Home
74% of Deals Completed in Home State of Investor Group & Company
#
100%
90%

84%

83%
80...
10 Most Active Angel Groups
Total Deals (Alpha Order)

Seattle, WA

NY, MA, CA

National Group

Sunnyvale, CA

Houston, TX...
Regional Trends

12
Great Lakes Shows Largest Marketshare Increase
Share of Angel Group Deals by Region Q3 2013

Northwest

New York

8.9%

8....
Share of Angel Group Deals by Region
Q3 2012

Q2 2013

Q3 2013

11.3%

100%

8.8%

New York

6.5%
10.4%

6.7%

8.9%
5.1%
8...
New England Retains Lead, New York Bounces Bank, Great Lakes Drops
Share of Angel Group Dollars by Region Q3 2013

Northwe...
Share of Angel Group Dollars by Region
100%
90%

Q3 2012

Q2 2013

12.1%

5.8%

4.7%
80%
70%
60%
50%

14.9%
2.4%
6.4%

14....
Sector Trends

17
Internet, Healthcare, Mobile Continue to Grab Lion’s Share of Deals
Q3 2013 Share of Angel Group Deals by Sector
Q3 2012

...
Mobile Captures Biggest Increase in Share of Dollars
Q3 2013 Share of Angel Group Dollars by Sector
Q3 2012

Q2 2013

Q3 2...
About the Halo Report™

20
What is the Halo Report™?

Angel Group Investment Trends: The Angel Resource Institute, Silicon Valley Bank and
CB Insight...
Understanding the Data:
Special Round Types and Industry Sectors
The Halo Report™ provides analysis and trends on US angel...
Halo Report Contacts
Angel Resource Institute
JJ Knight, jjknight@angelresource.org
The Angel Resource Institute (ARI) is ...
Angel Resource Institute and Silicon Valley Bank co-produce the Halo Report™ with data powered by CB Insights.
Angel Resou...
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Halo Report Q3 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 Q3 2013 Halo Report finds median round sizes down to $520K per deal, healthcare round sizes up and a larger share of deals and investment dollars going to mobile companies. Together Internet, healthcare and mobile companies received 81% of dollars invested by angel groups in Q3.

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Halo Report Q3 2013

  1. 1. Angel Group Update: Q3 2013
  2. 2. Table of Contents Q3 2013 Highlights p. 3 National Trends p. 5 Most Active Angels p.11 Regional Trends p. 12 Sector Trends p. 17 About the Halo Report p. 20 2
  3. 3. Q3 2013 Highlights 3
  4. 4. Angel Group Update: Halo Report Q3 2013 Highlights 10 Most Active Angel Groups Total Deals Q3 •Angel Round Size Still Down from Peak in Early 2013 p.6 •Alliance of Angels Median Round Size Trending Up to $2M when Angels Co-Invest p.7 •Golden Seeds •New England Retains Share of Dollars, New York Bounces Back p.16 •Great Lakes Shows Biggest Gains in Share of Deals, Biggest Drop in Share of Dollars p.13-16 •Houston Angel Network •Hyde Park Angels •Investors’ Circle •Launchpad Venture Group •Life Science Angels •Healthcare Round Size Jumps Year Over Year p.8 • Mobile Grabs Greater Share of Deals and Dollars p.18-19 •Sand Hill Angels •Tech Coast Angels •Wisconsin Investment Partners *Groups new to the top ten are denoted by 4
  5. 5. National Trends 5
  6. 6. Median Round Size Still Down from Peak in Early 2013 $M $970K $1.00 $900K $870K $680K $700K $840K $770K $600K $510K $0.50 $520K Q2 2013 Q3 2013 $0.00 Q3 2012 Q4 2012 Q1 2013 Median Round Size Mean Round Size *Angel rounds include angels & angel groups only 6
  7. 7. Round Size Trending up to $2M when Angel Groups Co-Invest with Other Types of Investors $M $2.83 $3.00 $2.52 $2.50 $2.45 $2.84 $2.04 $2.00 $1.50 $1.50 $1.37 Q1 2013 $2.00 $1.40 Q4 2012 $1.90 $1.00 $0.50 $0.00 Q3 2012 Median Round Size Q2 2013 Q3 2013 Mean Round Size 7
  8. 8. Healthcare Round Size Jumps Over 2012 Median Round Sizes for Angel Groups in Top Sectors $M $1.50 $1.50 $1.10 $1.10 $935K $1.00 $0.50 2012 YTD 2013 2012 $1.00 $1.00 YTD 2013 2012 YTD 2013 $0.00 Healthcare Internet Mobile / Telecom *For all deals involving angel groups, includes co-investors 8
  9. 9. Median Early Stage Pre-Money Valuation Steady at $2.5M Rolling Year Q3 2013 $2.5M $1.2M Median $3.0M 3rd Quartile $6.4M 1st Quartile $0.11M *Including all rounds with angel groups before Series A 9
  10. 10. Angel Groups Invest Close to Home 74% of Deals Completed in Home State of Investor Group & Company # 100% 90% 84% 83% 80% 79% 75% 82% 75% 72% 71% 80% 74% 70% 60% 50% 40% Q3 2012 Q4 2012 Q1 2013 Q2 2013 Investor & Company in Same State Investor & Company in Same Region Q3 2013 10
  11. 11. 10 Most Active Angel Groups Total Deals (Alpha Order) Seattle, WA NY, MA, CA National Group Sunnyvale, CA Houston, TX Chicago, IL Boston, MA Sunnyvale, CA Southern CA Madison, WI *Groups new to the top ten are denoted by 11
  12. 12. Regional Trends 12
  13. 13. Great Lakes Shows Largest Marketshare Increase Share of Angel Group Deals by Region Q3 2013 Northwest New York 8.9% 8.9% Great Plains 14.0% California 20.1% 12.2% Great Lakes 5.1% New England Mid-Atlantic 8.4% Southwest 6.1% Southeast 10.3% Texas Texas 11.0% 5.6% 13
  14. 14. Share of Angel Group Deals by Region Q3 2012 Q2 2013 Q3 2013 11.3% 100% 8.8% New York 6.5% 10.4% 6.7% 8.9% 5.1% 8.4% 5.6% Mid-Atlantic 90% 80% 7.8% 7.5% 70% 8.1% 60% 50% 40% 10.9% 8.9% 7.0% 17.2% 14.0% 11.9% 10.3% 13.5% 12.2% 17.1% 20.1% Texas 6.1% 10.4% 6.5% 6.2% 5.7% Great Plains Northwest Southwest Great Lakes 30% 12.9% 20% 10% 0% 19.4% Southeast New England California 14
  15. 15. New England Retains Lead, New York Bounces Bank, Great Lakes Drops Share of Angel Group Dollars by Region Q3 2013 Northwest New York 7.5% 14.9% Great Plains 5.3% California 19.0% 25.3% Great Lakes 6.8% New England Mid-Atlantic 1.8% Southwest 4.7% Southeast 11.1% Texas 3.5% Texas 6.1% 15
  16. 16. Share of Angel Group Dollars by Region 100% 90% Q3 2012 Q2 2013 12.1% 5.8% 4.7% 80% 70% 60% 50% 14.9% 2.4% 6.4% 14.9% 9.6% 8.8% 6.0% 4.5% 4.3% 5.0% 11.2% Q3 2013 14.2% 6.8% 1.8% 3.5% 7.5% 4.7% 5.3% New York Great Plains Mid-Atlantic Texas Northwest 11.1% Southwest 40% 30% 9.6% 11.1% 10.0% 25.3% 18.4% Great Lakes Southeast 20% 10% 22.5% New England 16.9% 19.0% California 0% 16
  17. 17. Sector Trends 17
  18. 18. Internet, Healthcare, Mobile Continue to Grab Lion’s Share of Deals Q3 2013 Share of Angel Group Deals by Sector Q3 2012 Q2 2013 Q3 2013 90% 16.7% 80% 7.5% 2.2% 12.4% 5.7% 1.6% 6.2% 4.2% 13.1% 0.5% 1.4% 3.3% 5.6% 100% 70% 3.2% 2.2% 60% 14.5% 50% 40% 19.4% 13.5% 17.8% Other Computer Hdwr & Svcs Energy & Utilities Industrial 19.7% 22.4% Software Mobile & Telecom 30% Healthcare 20% 10% 34.4% 36.8% 36.0% Internet 0% 18
  19. 19. Mobile Captures Biggest Increase in Share of Dollars Q3 2013 Share of Angel Group Dollars by Sector Q3 2012 Q2 2013 Q3 2013 9.2% 4.6% 3.4% 2.1% 5.1% 5.8% 5.9% 0.2% 1.4% 6.2% 5.8% 100% 90% 80% 70% 8.2% 4.9% 1.8% 2.6% 12.7% 25.8% 17.7% Other Computer Hdwr & Svcs Energy & Utilities 60% Industrial 50% 40% 35.8% 23.6% 18.6% Mobile & Telecom 30% 20% 32.2% 10% Software 30.3% 36.2% Healthcare Internet 0% 19
  20. 20. About the Halo Report™ 20
  21. 21. 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 JJ Knight, Halo Report Coordinator: 910-452-7444 and jjknight@angelresource.org. 21
  22. 22. 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 Q3 2013, which represents a total of 278 deals and $445M 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. Halo Report Industry Sectors Industrial Internet Automotive & Transportation Mobile & Telecom Business Products & Services Software Consumer Products & Services Energy & Utilities Computer Hardware & Services Electronics Environmental Services & Healthcare Equipment Financial Services Food & Beverages Leisure Media Metals & Mining Retail Risk & Security 22
  23. 23. Halo Report Contacts Angel Resource Institute JJ Knight, jjknight@angelresource.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 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. 23
  24. 24. 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. ©2014 SVB Financial Group. All rights reserved. SVB, SVB Financial Group, and Silicon Valley Bank are registered trademarks. 24
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