Angels in America: Early-stage investment rebounds
Angel investment in early-stage companies is on the rebound, according to a study by the University of New Hampshire’s Center for Venture Research.
Angel investors started to come out of their shells during the first half of the year with angel investments up more than 3% compared with H1 2011, according to research out of the University of New Hampshire, and medical device companies took the lion’s share of the backing.
The medical device and equipment sector grabbed 24% of total angel investment during the first six months of the year, according to a study from UNH’s Center for Venture Research.
Angels dropped about $9.2 billion on early-stage firms during the 6 months ended June 30, according to the study, marking a steady recovery since investment at all stages flatlined during the fiscal crisis in late 2008 and early 2009, according to the study.
More than 27,000 “entrepreneurial ventures” landed angel funding from 131,145 backers during the period. The average deal was worth about $336,000, according to the UNH researchers.
“These data indicate that angels remain major players in this investment class and at valuations similar to the first and second quarters of 2011. While the market exhibited a stabilization from the first and second quarters of 2011, when compared to the market correction that occurred in 2008, these data indicate that the angel market has demonstrated a steady recovery since 2008,” CVR director Jeffrey Sohl said in prepared remarks.
Some 40% of the backing went to seed- and startup-stage enterprises, flat compared with H1 2011, but expansion-stage financing rose to 22% of the total haul from angels, up from 13% in Q1 and Q2 2011, “indicating that angels are positioning their investments for exits in the coming year,” according to a press release. About half of the period’s angel investment went to new, first-sequence funding rounds, about the same as last year.
Angel investment contributed to the creation of about 106,000 new jobs in 2012, the researchers said.