Market Size
The angel investor market in Q1,2 2012 showed signs of a continued steady recovery since the market correction in the second half of 2008 and the first half of 2009. Total investments in Q1,2 2012 were $9.2 billion, an increase of 3.1% over Q1,2 2011, according to the Center for Venture Research at the University of New Hampshire. A total of 27,280 entrepreneurial ventures received angel funding in Q1,2 2012, a 3.7% increase from Q1,2 2011, and the number of active investors in Q1,2 2012 was 131,145 individuals, an increase of 5% from Q1,2 2011. The increase in total dollars and the matching increase in total investments resulted in a deal size of $336,390 in Q1,2 2012, comparable to the deal size in Q1,2 2011 of $338,400. These data indicate that angels remain major players in this investment class and at valuations similar to Q1,2 2011. While the market exhibited a stabilization from Q1,2 2011, when compared to the market correction that occurred in 2008, these data indicate that the angel market has demonstrated a steady recovery since 2008.
Stage
Angels continue their appetite for seed and start-up stage investing, with 40% of Q1,2 2012 angel investments in the seed and start-up stage, virtually unchanged from the seed and start-up stage in Q1,2 1011 (39%) and in the full year 2011 (42%). There was, however, a shift to expansion stage financing to 22% of investments in Q1,2 2012 from 13% in Q1,2 2011, indicating that angels are positioning their investments for exits in the coming year. Historically angels have been the major source of seed and start-up capital for entrepreneurs and while this stabilization in seed and start-up investing is an encouraging sign it remains below the pre-2008 peak of 55%, signifying that there remains a need for seed and start-up capital for both new venture formation and job creation. New, first sequence, investments represent 49% of Q1,2 2012 angel activity, unchanged from Q1,2 2011.
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