Here’s How Angel Investors Are Handling 2017

April 28, 2017

11:20 am

Pitchbook and the Angel Resource Institute have just released the 2016 edition of their Annual ARI HALO Report, a research paper designed to explain the most recent trends and activity from top-ranked angel groups across the nation.

The report isn’t just a look at 2016: It’s a snapshot of the mentalities that the best angel groups share as they head into 2017. Here is a selection of quick takeaways from the PDF, which can be found here.

Angel Groups Are Teaming Up

The median angel group investment in 2016 was $127,000, while the median round size was $950,000. In other words, more than one angel group is needed to fund a round. Angel groups are syndicating in order to spread out the risk of a round into a number of smaller investments.

Pre-Money Valuations Are Down From Last Year

Pre-money valuations are on the downswing. The biggest Angel groups are making smaller first-round investments to shift their capital towards (safer) follow-on rounds. From the report:

“2016 was the first year where angel groups did more follow-on deals than first-time investments in new portfolio companies.”

Houston and Texas Angels Tie for the Most Deals

The Central Texas Angel Network and the Houston Angel Network both take first place for the top angel groups with the most deals. The Hyde Park Angel Network comes in third.

Female and Female Minority Entrepreneurs Are Still Undervalued

The well-established trend of the startup community name-checking a commitment to look beyond it’s male bubble while failing to do so is continuing: Just 17 percent of all deals in 2016 were led or founded by a female entrepreneur, while men landed 83 percent of the deals.

Numbers get worse when those women are minorities: 3 percent of all deals were led or founded by female minorities, compared to 25 percent of all deals being led or founded by male minorities.

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Adam is a writer with an interest in a variety of mediums, from podcasts to comic books to video essays to novels to blogging — too many, basically. He's based out of Seattle, and remains a staunch defender of his state's slogan: "sayWA." In his spare time, he recommends articles about science fiction on Twitter, @AdamRRowe

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