Angel Group Update: Q1 2014
Table of Contents
Q1 2014 Highlights p. 3
National Trends p. 5
Most Active Angels p.12
Regional Trends p.14
Sector Trends ...
Q1 2014 Highlights
3
Angel Group Update: Halo Report Q1 2014
Most Active Angel Groups
Total Deals Q1 2014
• Alliance of Angels
• Angel Investor...
National Trends
5
Median Angel Round Size Increases in Q1 2014
Mean Angel Round Size Also Jumps Proportionally
$0.00
$0.50
$1.00
$1.50
Q1 20...
Median and Mean Round Sizes Decline Slightly in Q1 2014
When Angel Groups Co-Invest with Other Types of Investors
$1.40
$1...
74.3% 74.2% 69.9% 70.1%
59.4%
25.7% 25.8% 30.1% 29.9%
40.6%
0%
20%
40%
60%
80%
100%
Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 201...
Median Internet Round Size Increases Significantly in Q1 2014
Median Healthcare Round Size Experiences a Decline
$1.35
$1....
Median Seed Stage Pre-Money Valuation Increases Slightly
Including All Rounds with Angel Groups Pre-Series A over Rolling ...
Angel Groups Continue to Invest Close to Home
Investments are Primarily made Intrastate
80%
61%
69% 69%
75%
89%
82% 83%
75...
Active Angel Groups
12
Most Active Angel Groups Q1 2014 – Total Deals (Alpha Order)
13
Southern CA
Houston, TX
Boston, MA
Austin, TX
Tucson, AZ
M...
Regional Trends
14
15
California
17.7%
Northwest
5.7%
Southwest
5.1%
Great Plains
3.2%
Great Lakes
17.1%
Southeast
10.8%
Mid-Atlantic
9.5%
Ne...
Quarterly Share of Angel Group Deals by Region
Great Lakes Sees Surge in Deals; Texas Has Slower Quarter
20.7% 19.1% 17.7%...
17
California
16.7%
Northwest
6.2%
Southwest
7.2%
Great Plains
4.5%
Great Lakes
24.6%
Southeast
11.6%
Mid-Atlantic
4.5%
Ne...
22.4% 20.5% 16.7%
10.5% 18.0%
11.5%
8.8%
10.0%
11.6%
10.9%
13.6%
24.6%
5.2%
2.3%
7.2%
6.4%
4.9%
6.2%
2.9%
8.1%
1.4%
10.0% ...
Sector Trends
19
34.8%
39.8% 37.3%
23.7%
19.5%
19.6%
18.7% 15.8%
14.6%
5.6%
2.9%
1.9%
3.0%
4.6%
5.7%
1.5%
0.8%
1.9%
0.5%
1.2%
0.0%
12.2% 15...
34.5% 32.7%
46.5%
23.4%
35.2%
25.6%
20.8%
13.7% 9.1%
6.5%
1.6%
0.5%
5.3%
4.4%
5.5%
1.8%
1.1%
0.3% 0.0%
7.4% 11.5% 11.7%
0%...
About the Halo Report™
22
What is the Halo Report™?
Angel Group Investment Trends: The Angel Resource Institute, Silicon Valley Bank and
CB Insights...
Understanding the Data:
Special Round Types and Industry Sectors
The Halo Report™ provides analysis and trends on US angel...
Angel Resource Institute
JJ Knight, jj@angelresource.org
The Angel Resource Institute (ARI) is a charitable organization d...
Angel Resource Institute and Silicon Valley Bank co-produce the Halo Report™ with data powered by CB Insights.
Angel Resou...
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Angel Group Investing Heats Up: Q1 2014 Halo Report

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The Angel Resource Institute (ARI), Silicon Valley Bank (SVB) and CB Insights released the Q1 2014 Halo Report today, a national survey of angel group investment activity. The report finds median round sizes increased to $980K per deal, and pre-money valuations rose to $2.7 million in the quarter. Investments in Internet-related companies jumped significantly, while dollars invested in mobile and healthcare companies dropped.

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Angel Group Investing Heats Up: Q1 2014 Halo Report

  1. 1. Angel Group Update: Q1 2014
  2. 2. Table of Contents Q1 2014 Highlights p. 3 National Trends p. 5 Most Active Angels p.12 Regional Trends p.14 Sector Trends p.19 About the Halo Report p.22 2
  3. 3. Q1 2014 Highlights 3
  4. 4. Angel Group Update: Halo Report Q1 2014 Most Active Angel Groups Total Deals Q1 2014 • Alliance of Angels • Angel Investor Forum • Central Texas Angel Network • Desert Angels • Houston Angel Network • Launchpad Venture Group • Robin Hood Ventures • Sand Hill Angels • Tech Coast Angels • Wisconsin Investment Partners Highlights • Round size increasing when angels invest alone, p. 6 • Median pre-money valuation increases 10% to $2.7M, p. 10 • Co-investments continues slow decline, p. 8 • Internet round size increases; healthcare takes proportional dip, p. 9 & 21 • Dollars invested in Great Lakes region spikes; Texas sees slower quarter, p. 17-18 4 *Groups shown in alphabetical order; groups new to list denoted by halo.
  5. 5. National Trends 5
  6. 6. Median Angel Round Size Increases in Q1 2014 Mean Angel Round Size Also Jumps Proportionally $0.00 $0.50 $1.00 $1.50 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Median Round Size Mean Round Size 6 *Angel rounds include angels & angel groups only $951K $994K $899K $1.10M $1.23M $750K $555K $560K $750K $980K $M
  7. 7. Median and Mean Round Sizes Decline Slightly in Q1 2014 When Angel Groups Co-Invest with Other Types of Investors $1.40 $1.90 $2.00 $1.80 $1.65 $1.99 $2.83 $2.87 $2.58 $2.43 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Median Round Size Mean Round Size 7 $M
  8. 8. 74.3% 74.2% 69.9% 70.1% 59.4% 25.7% 25.8% 30.1% 29.9% 40.6% 0% 20% 40% 60% 80% 100% Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Not Co-Invested Angel Group Co-Investment 8 Percentage of Co-Investments by Angel Groups Falls in 2014
  9. 9. Median Internet Round Size Increases Significantly in Q1 2014 Median Healthcare Round Size Experiences a Decline $1.35 $1.10 $1.50 $2.00 $1.03 $1.00 $1.21 $1.85 $1.00 $0.00 $0.50 $1.00 $1.50 $2.00 Healthcare Internet Mobile / Telecom Q3 2013 Q4 2013 Q1 2014 9 *For all deals involving angel groups, includes co-investors $M
  10. 10. Median Seed Stage Pre-Money Valuation Increases Slightly Including All Rounds with Angel Groups Pre-Series A over Rolling 4 Quarters 10 $2.7M Median $1.2M 1st Quartile $4.0M 3rd Quartile $0.30M $10M
  11. 11. Angel Groups Continue to Invest Close to Home Investments are Primarily made Intrastate 80% 61% 69% 69% 75% 89% 82% 83% 75% 77% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Investor & Company in Same State Investor & Company in Same Region 11 #
  12. 12. Active Angel Groups 12
  13. 13. Most Active Angel Groups Q1 2014 – Total Deals (Alpha Order) 13 Southern CA Houston, TX Boston, MA Austin, TX Tucson, AZ Madison, WI Hartford, CT Philadelphia, PA Seattle, WA Sunnyvale, CA
  14. 14. Regional Trends 14
  15. 15. 15 California 17.7% Northwest 5.7% Southwest 5.1% Great Plains 3.2% Great Lakes 17.1% Southeast 10.8% Mid-Atlantic 9.5% New England 12.7% New York 12.0% Texas 11.0% Texas 5.7% Q1 2014 Share of Angel Group Deals by Region
  16. 16. Quarterly Share of Angel Group Deals by Region Great Lakes Sees Surge in Deals; Texas Has Slower Quarter 20.7% 19.1% 17.7% 10.6% 12.4% 12.7% 9.6% 13.7% 10.8% 13.6% 11.6% 17.1% 6.6% 3.7% 5.1% 9.1% 5.0% 5.7% 5.1% 11.6% 5.7% 10.8% 9.5% 5.1% 2.9% 3.2% 9.1% 9.1% 12.0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% New York Great Plains Mid-Atlantic Texas Northwest Southwest Great Lakes Southeast New England California 16 Q4 2013Q3 2013 Q1 2014 10.3%
  17. 17. 17 California 16.7% Northwest 6.2% Southwest 7.2% Great Plains 4.5% Great Lakes 24.6% Southeast 11.6% Mid-Atlantic 4.5% New England 11.5% New York 10.9% Texas 6.1% Texas 1.4% Q1 2014 Share of Angel Group Dollars by Region
  18. 18. 22.4% 20.5% 16.7% 10.5% 18.0% 11.5% 8.8% 10.0% 11.6% 10.9% 13.6% 24.6% 5.2% 2.3% 7.2% 6.4% 4.9% 6.2% 2.9% 8.1% 1.4% 10.0% 4.5% 4.7% 4.6% 4.5% 12.2% 7.9% 10.9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% New York Great Plains Mid-Atlantic Texas Northwest Southwest Great Lakes Southeast New England California 16.0% 18 Q4 2013Q3 2013 Q1 2014 Quarterly Share of Angel Group Dollars by Region Several Multimillion Dollar Deals Drive Up Great Lakes Performance By Nearly 10%
  19. 19. Sector Trends 19
  20. 20. 34.8% 39.8% 37.3% 23.7% 19.5% 19.6% 18.7% 15.8% 14.6% 5.6% 2.9% 1.9% 3.0% 4.6% 5.7% 1.5% 0.8% 1.9% 0.5% 1.2% 0.0% 12.2% 15.4% 19.0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Other Computer Hdwr & Svcs Energy & Utilities Industrial Software Mobile & Telecom Healthcare Internet 20 Q4 2013Q3 2013 Q1 2014 Quarterly Share of Angel Group Deals by Sector Internet, Healthcare, Mobile & Telecom Deals Comprise 71.5% of Deals
  21. 21. 34.5% 32.7% 46.5% 23.4% 35.2% 25.6% 20.8% 13.7% 9.1% 6.5% 1.6% 0.5% 5.3% 4.4% 5.5% 1.8% 1.1% 0.3% 0.0% 7.4% 11.5% 11.7% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Other Computer Hdwr & Svcs Energy & Utilities Industrial Software Mobile & Telecom Healthcare Internet 5.6% 4.6% 21 Quarterly Share of Angel Group Dollars by Sector Internet Companies Get Bump; Dollars Dwindle for Mobile, Healthcare Q4 2013Q3 2013 Q1 2014
  22. 22. About the Halo Report™ 22
  23. 23. 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: 910-523-5503 and jj@angelresource.org. 23
  24. 24. 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 2014, which represents a total of 170 deals and $228M 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. 24 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
  25. 25. Angel Resource Institute JJ Knight, jj@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. Halo Report Contacts 25
  26. 26. 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. 26

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