Here’s a good overview of so-called angel investment in the United States. More than 250,000 active angel investors invested about $26 billion in 57,120 entrepreneurial ventures. That’s 10 percent more angels than last year and 12 percent more companies, but only 1.8 percent more money.
Not surprisingly, software led the field with 27 percent of the money invested, followed by the very powerful “other” category, then health (including health care, medical devices and medical equipment), biotech, and industrial or energy. The statistics don’t show green technology emerging, but that’s probably because the categories are set up differently. Green could be in a lot of different categories.
More from the report (quoting) :
- Angels continue to be the largest source of seed and startup capital, with 39 percent of 2007 angel investments in the seed and startup stage. Angels also exhibited an interest in post-seed/startup investing with 35 percent of investments in this stage. Expansion stage investing (21 percent) showed the biggest increase.
- In 2007 women angels represented 12 percent of the angel market. Women-owned ventures accounted for 12.7 percent of the entrepreneurs that are seeking angel capital, and 16 percent of these women entrepreneurs received angel investment in 2007. Thus, while the number of women seeking angel capital is low, the percentage that receives angel investments is in line with the overall market yield rate. These data indicate that when women do seek angel capital they fare well, but the need is to increase the number of women entrepreneurs that seek angel capital.
- Minority angels accounted for 3 percent of the angel population and minority-owned firms represented 4.7 percent of the entrepreneurs that presented their business concept to angels. The yield rate for these minority-owned firms was 21.2 percent, which for the first time is in line with market yield rates. However, the small percentage of minority-owned firms seeking angel capital is of concern, as is the sustainability of the yield rate.
And one last point, from my calculations: With the number of investments rising much more sharply than the amount invested, it looks like the average deal size went down to $440,000 from $500,000 a year earlier. This seems reasonable to me, another indication of the quicker and cheaper conception-to-market-entry cycle in Web 2.0.