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Angel dollars and deals down in 2016, CVR report

June 15, 2017

The angel investor market in 2016 experienced a decrease in investment dollars and deal size, according to a new report from the Center for Venture Research (CVR) at the University of New Hampshire. CVR researchers found that total investments were $21.3 billion in 2016, a decrease of 13.5 percent from 2015. In 2016, a total of 64,380 startups and other entrepreneurial ventures received angel funding – a decline of 9.5 percent from 2016.  The report also includes sections on sector analysis, stage of investment, job growth, valuation, yield rates, and inclusion.

While total funding and deals declined, there was a positive note for entrepreneurs seeking early stage capital with seed and start-up stage investments making up nearly 41 percent of all deals – up 13 percentage points from 2015. This reverses a prevailing trend of angel investors focusing on later-stage, less risky deals. The researchers, however, write that while angels may be more willing to take on the associated risk of seed and start-up stage deals that these deals are mostly targeted at select companies with high valuations.

In 2016, the yield rate was 19.7 percent (up slightly from 18 percent in 2015), indicating that nearly 1 in 5 entrepreneurs seeking angel capital have a chance of securing it. In comparison, the 2016 yield rate for female entrepreneurs was 14 percent, which according to the report seems to be stabilizing at that point over the past years. CVR raises concerns of the sustainability of the current yield rate of nearly 20 percent and contends that there may be a market adjustment toward the historical yield rate of 15 percent for all angel deals.

The report also finds that angel investments helped stimulate the creation of 263,950 jobs in 2016 (approximately 4.1 jobs per investment). 

angel capital