Angel Investors Were Selective in 2015’s Robust Angel Market, CVR Report Finds

The angel investor market in 2015 had a slight increase in investment dollars and in the deal size according to a new report from the Center for Venture Research (CVR) at the University of New Hampshire. In The Angel Investor Market in 2015: A Buyers Market, CVR reports that total angel investments in 2015 were $24.6 billion – an increase of 1.9 percent over 2014. CVR also reported that the total number of entrepreneurial ventures that received angel funding in 2015 declined by 3.1 percent from 2014 – in total 71,110 startups received funding. The result of these two trends was larger deal sizes for 2015 – an increase of 5.1 percent larger from 2014. CVR concluded that these findings, combined with yield rates and valuations data, indicate that angels were selective in their investment behavior in 2015.

While CVR contends that the angel market was robust in 2015 – approximately $24.6 billion in investments – they also believe that the selectivity of angels and decrease in valuations over the last three years indicates a continuing market correction in valuations. Other findings include:

• Software maintained its top sector position with 18 percent of total angel investments in 2015;
• Other key industries include Healthcare Services/Medical Devices and Equipment (16 percent), Biotech (13 percent), Industrial/Energy (11 percent), Retail (10.6 percent), and Media (9 percent);
• Angel investments contributed to the creation of 270,2000 new jobs in the U.S. – 3.8 jobs per angel investment;
• The average angel deal size was $345,390;
• The average equity received was 14.89 percent with a deal valuation of $2.3 million;
• Angel investment in the seed and startup stage (28 percent of deals) was largely unchanged from 2014 (25 percent of deals);
• 45 percent of all angel deals were early stage investments (46 percent in 2014); and,
• Expansion and late stage investments also remained consistent with regard to percentage of total deals.

In addition to the 2015 report, CVR’s website includes similar reports from 2002 to 2014.