angel

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.

New Jersey Gov. Phil Murphy signed multiple bills late last month that may help position the state as a leader in technology-based economic development. One bill increases the tax credit for angel investors in qualified technology companies, with even larger credits available for investments in women- and minority-owned businesses and those located in low-income areas. Meanwhile, the state’s approved FY 2020 budget includes $1.0 million for the New Jersey Commission on Science, Innovation, and Technology. After nearly a decade of receiving no funding from the state, this marks the second consecutive year that the commission will receive $1.0 million to support technology-based economic development.

The Angel Capital Association is piloting a new report on the factors that influence successful angel investing and the startups that angels support.  The initial Angel Funders Report covers 2017 data from 26 angel groups and provides new insights for one year of investments. Some of the report’s key findings include:

While venture capital remains heavily concentrated across a select few metropolitan areas, the geographic distribution of angel investors is widespread, according to new research from the Angel Capital Association, The Wharton School at the University of Pennsylvania, and the John Huston Fund for Angel Professionalism at Rev1 Ventures. Stemming from a survey of 1,659 angels, the largest such project to date, The American Angel paints a demographic portrait of that subset of the investment community in the United States. Nearly two-thirds of the angel investors surveyed by the group were located outside of New York, Boston, and the Bay Area. On average, coastal angel investors made smaller investments than those from other regions – $32,000 compared to $37,000 per investment. Texans, on average, made the largest angel investments at $44,000.

This week we continue our series on state legislation pertaining to the innovation economy that has been enacted this year around the country. This third installment of the States of Innovation 2017 series deals with innovation and entrepreneurship-focused tax credits.

Over the past year, state lawmakers in approximately have looked to grow innovation and entrepreneurship in their respective states by introducing and expanding tax credit efforts intended to increase the availability of startup capital, support R&D activities, facilitate business growth, and spur job creation. The two most common types of tax credits proposed to support innovation at the state level are angel tax credit programs and R&D tax credit programs. In addition to these two areas, states also proposed other tax credits intended to support job creation and business growth.

In late 2015, the U.S. Securities and Exchange Commission (SEC) released two rule changes that may shape the future of equity investments in startups and small businesses. The two new rules directly address issues related to the accreditation of investors – an important element of the angel investment ecosystem that has long driven early stage investments in startups. In December, the SEC released a report on proposed changes to the definition of accredited investors. In November, the SEC released its rules for Title III of the JOBs Act that allows startups to raise equity from both accredited and non-accredited investors through a publicly solicited crowdfunding campaign. The new rules will allow equity crowdfunding to go into effect in May of 2016.