Even as venture capitalists retreat further from seed and early stage opportunities, the important news for entrepreneurs is that angel investors continue to invest.
The most recent edition (3Q 2012) of the Q3 2012 Halo Report™: Angel Group Update, an aggregate analysis of investment activity by angels and angel groups, shows that in the third quarter, the median angel investment round size reached $640,000, a five-quarter high. When angels invest with other types of investors, the medium round size was even higher at $1.59M.
However, the Halo survey found that nationally, there was a significant decline in co-invested deals. Previously, about 65 to 75 percent of reported deals had co-investment; that was down to 49 percent in 3Q2012. At i2E, we require co-investment in every deal we do.
Oklahoma’s SeedStep Angels are typically participating in rounds that range from about $750,000 to $2M; most of the group’s deals have co-investors. SeedStep Angels invested $573,000 in seven companies in FY 2012. This group, combined with syndication efforts both in and out of state, is critical to support Oklahoma startups.
According to the Halo report, the Internet sector dominated angel group deals; mobile deals reached a five-quarter high. Healthcare companies received the largest share of dollars.
The Halo Report also showed stable early stage valuations, with pre-money valuation for early stage angel group deals of $2.6M, down only slightly from $2.7M in the second quarter 2012. Valuations ranged from $.51M to $1.6M in the first quartile to $4.0M to $6.6M in the fourth quartile.
In terms of share of deals, the Southeast (19.5%) is narrowing the gap with California (21.4%). In terms of dollars, half the money invested is in California (28%) and New England (21.3%) deals.
Only 2 percent of dollars and 5.2 percent of deals happened in the Great Plains states (OK, KS, MO, NE, IO, MN, ND, and SD). But we at i2E are constantly at work to improve that locally.
The Halo report is a collaborative project between Silicon Valley Bank, Angel Resource Institute and data powered by CB Insights. The data is collected via survey and aggregation of public data. Angel groups and individual angel investors interested in including their data in the Halo Report may contact Sarah Dickey, ARI Research Director.