Monday, April 6, 2009

Angel Investors Recap 2008

From Jeff Cornwall of Belmont University and his excellent blog on all things entrepreneurship.

Angel investors were just as active in 2008 when measured in terms of deal flow, but the money they pumped into these deals was down from the previous year according to the annual summary conducted by The Center for Venture Research at the University of New Hampshire.
Some additional findings from this report:

§ 55,480 firms received angel investments in 2008, a 2.9% increase over 2007 -- as I have been telling folks, there is still money out there
§ Dollar flow into these deals was down 24% from the previous year -- an indication of a more cautious stance by investors
§ Healthcare and software led the way in deals -- no surprise here
§ Exits in 2008 were mostly through mergers and acquisitions (70%). 26% of exits were through bankruptcy. Only 4% of exits happened via an IPO -- thank you Sarbanes-Oxley for killing this as an option.
§ Most of the angel deals were still seed stage or early start-up
§ Yield rates for these angels were down to 10%. Just as comparison the yield rate in 2005 was 23%.

Thanks to Jeffrey Sohl at UNH for putting this report together each year.

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