Key insights from this year’s Angel Funders Report finds increasing investor optimism, concentration in follow-on deals

The Angel Capital Association has recently released its Angel Funders Report 2020, examining the angel investor landscape through a survey of 76 angel groups and investments made during 2019. While the survey results represent only a portion of the larger angel investment community, the ACA report does provide useful insights into the current trends within the angel funder sphere. The report also provides an in depth look at the current trends and methodology of the participating angel investors while also exploring the changes in investment strategy throughout recent years.

In gauging willingness to invest, ACA notes a shift from the spring. When surveyed in April 2020, 2 percent of angel funders were willing to increase investment, 63 percent planned no change in investment level, and 33 percent had a decreased willingness to invest. When revisited in September 2020 however, 19 percent of the surveyed angel groups had a willingness to increase their investments, 49 percent felt no change in their investment level, and 32 percent of funders held a decreased interest in investing.

The report also notes a shift in investment type as 34 percent of angel groups were surveyed as having more interest in increasing follow-on deals. The majority of the funding groups, 53 percent, noted a desire to maintain their current level of follow-on and new investments, while only 15 percent of the surveyed groups reported an interest in increasing new deals.

Other notable takeaways include:

• Individual angel groups were found to invest roughly $2.5 million each year in 10-20 new ventures and a wide array of industry types.
• The top industries for investment by the surveyed angel groups included biotechnology, eCommerce, healthcare technology, green technology, and financial technology.
• Deals that involved angel investors receiving a seat on the board of directors of a company (nearly 40 percent of deals) had a median deal size 2.5 times higher than those that did not include a spot on the board.
• Angel portfolio company CEOs remain predominantly white males. Of the surveyed angel groups, women made up 27 percent of portfolio company CEOs while only 14 percent of CEOs, regardless of gender, were non-white.
• Experience plays a large role in funding levels; experienced male CEOs received 60 percent more funding than that of female CEOs and less experienced males.

Angel Capital Association’s Angel Funders Report 2020, including commentary provided by senior North American angel investors, can be accessed here.