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