Angel Investors Taking Flight Again
An increasing number of entrepreneurs are finding angel investors to back their ventures, new research shows.
A study by the Center for Venture Research at the University of New Hampshire found that the angel investment market showed positive signs in the first half of the year with $9.2 billion in total investments, a 3.1 percent increase from 2011. The average investment was $336,390.
Overall, more than 27,000 entrepreneurial ventures received angel funding from more than 131,000 investors during the first two quarters of 2012, a nearly 4 percent jump from the same period a year ago.
Jeffrey Sohl, director of the Center for Venture Research, said the research shows that angels remain major players in the investment process.
"(The) data indicate that the angel market has demonstrated a steady recovery since 2008," Sohl said.
The study revealed 40 percent of angels invested in businesses during the seed and startup stages, while 22 percent put their money up during the expansion stage.
"Historically, angels have been the major source of seed and startup capital for entrepreneurs and while this stabilization in seed and startup investing is an encouraging sign it remains below the pre-2008 peak of 55 percent, signifying that there remains a need for seed and startup capital for both new venture formation and job creation," Sohl said.
The research found that angel investments have helped create 106,400 new jobs this year, which is nearly 4 jobs per investment.
Health care services/medical devices and equipment accounted for the largest share of investments during the first half of the year. The study shows that software, biotech, retail, IT services and media are among the other popular industries for angel investing.
"Retail and media have solidified their presence in the top six sectors, mainly due to investing in social networking ventures," Sohl said.
The Center for Venture Research has been conducting research on the angel market since 1980.