Download the full briefing on Angel activity from the ACA for ...
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ACA Briefing and Angel Group Stats May 20, 2008
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ACA Briefingand Angel Group Stats
May 20, 2008
Summary of ACA Membership – May, 2008
• Full Members 147• Provisional Members 18• Investors in Member Groups 6,800• States & Provinces 50• Affiliate Organizations 19
Affiliates
Full Members
Provisional Members
Members and Affiliates – April, 2008
Source: 2008 ACA Angel Group Confidence Survey
2007 Group Investment Data
• 10% increase in average investment per round from 2006, but same number of investments • 66% had follow-on or co-investments with venture capital firms• 25% had distributions to investors• Pacific Northwest: $2.5 mil in 13.5 companies average ($189K per round) – BUT limited data available
Average MedianNumber of Investments 7.3 5Total dollars invested $1.94 mil $1.1 milDollars invested per round $265,926Number of new companies 4.5
Average Size Investment Per Round - 2007
Percent of GroupsSource: 2008 ACA Angel Group Confidence Survey
0 10 20 30 40
> $750,000
$500,000 - $750,000
$250,000 - $500,000
$150,000 - $250,000
< $150,000
Investment Preference – 2007-2008
Source: 2008 ACA Angel Group Confidence Survey Percent of Groups
0 10 20 30 40 50 60 70 80 90
Telecommunications
Software
Semiconductors
Retail/ Distribution
Other
Networking & Equipment
Medical Devices & Equipment
Media & Entertainment
IT Services
Industrial/ Energy
Healthcare Services
Financial Services
Electronics/ Instrumentation
Consumer Products/ Services
Computers & Peripherals
Business Products/ Services
Biotechnology
Preferred Investment/Company Stage – 2007-2008
0
10
20
30
40
50
60
70
80
90
Seed/Startup Early Stage Expansion Later Stage
Percent of Groups
Source: 2008 ACA Angel Group Confidence Survey
Geography – Where do Groups Invest?
Percent of Groups
Source: 2008 ACA Angel Group Confidence Survey
0 5 10 15 20 25 30
No restrictions
Region
State/ province
4-hour drive
2-hour drive
2008 Prediction: Overall Investment Activity
Source: 2008 ACA Angel Group Confidence Survey
Percent of Groups
0 10 20 30 40 50 60
Other
Deals and dollars decrease
Deals decrease, dollars increase
Deals increase, dollars decrease
Everything is same
Deals and dollars increase
2008 Prediction:
How Many New Companies Will You Invest In?
Source: 2008 ACA Angel Group Confidence Survey
Percent of Groups
Companies0
5
10
15
20
25
30
35
40
45
None 1 to 2 3 to 5 6 to 9 10+
2008 Prediction:
How Will Conditions for Liquidity Change?
Source: 2008 ACA Angel Group Confidence Survey Percent of Groups
0 10 20 30 40 50 60
Strengthen signficantly
Strengthen slightly
No change
Decrease slightly
Decrease significantlly
Co-Investment/ Follow-On Preferences
Percent of GroupsSource: 2008 ACA Angel Group Confidence Survey
0 20 40 60 80 100
No co-investment
Other private equity
Family offices
Later-stage VC
Early-stage VC
Other angel groups
Individual angels
0
5
10
15
20
25
30
35
40
2 to 10 11 to 25 26 to 50 51 to 75 76 to 100 101+
Investors Per Group
Source: 2008 ACA Confidence Survey
Average = 55 Median = 41
Percent of Groups
Organization Types
0
5
10
15
20
25
30
35
40
LLC LP C-Corp 501c3 501c4 501c6 Non-Profit None
For Profit 48% (54 groups)
Non Profit 35%(39 groups)
No Structure
17% (20
groups)
Groups
Source: 2007 ACA Conf survey and membership applications – 113 groups reporting (2006-2007)
May 2007Source: Membership Applications, 2006-2007
Angel Networks
Networks w/Sidecar Funds
Angel Funds
ACA Membership: Networks and Funds
99
12
17
Trends Among ACA Member Groups
• University-connected angel groups• Green/ clean-tech focus• Women angel groups• Co-investment – regions, US, cross-border• Communication with angels world-wide• Growing relationships with VCs
New Activities and Member Benefits• Public policy committee – education/ policy leadership• Regional/ collaboration committee – networking and co-investment
support• Directors and Officers’ insurance program – Chubb Insurance/AH&T• Updated membership directory, searchable on-line• Partnership with National Venture Capital Association• Research – Returns of Angels in Angel Groups• Investment data partnership – Dow Jones VentureOne
• Provide us your ideas to build the value of your membership
Best Practice Guidance Papers
• Board Governance• Negotiating Deal Terms• VC – Angel Group Relationships• State Angel Tax Credit Programs
• Reports will be released after Summit
Angel Group Financial Performance Research• Angel Capital Education Foundation, paid by Kauffman Foundation• Rob Wiltbank (Willamette University) and Warren Boeker
(University of Washington)• First opportunity to understand the ROI of angels connected to
angel groups and drivers behind returns• Released November, 2007• Responses:
– 538 angels (accredited investors)– 3,097 investments– 1,137 exits and closures
Profile of Angels - Median• Years investing 9• Number of investments 10• Total exits/ closures 2• Years as entrepreneur 14.5• Number ventures founded 2.7• Age 57• Percent of wealth in angel investing 10%• Education Masters degree
Heavily Concentrated in EARLY investments– 34% seed stage, 39% startup, 18% early growth– 45% had no revenues when the initial investment was made
Invested Returned
Dollars per deal: $50K $40K median $191K $486K mean
Group-Affiliated Angel Investments
Distribution of Returns by Venture Investment
35% - 0XOverall Multiple: 2.6X
Avg Holding Period: 3.5 years
Average IRR: 27%
3 yr
3.3 yr
4.6 yr
4.9 yr 6 yr0
10
20
30
40
50
60
< 1X 1X to 5X 5X to 10X 10X to 30X > 30X
Exit Multiples
Perc
ent o
f Tot
al E
xits
The Impact of Time in Due Diligence
Overall Multiple for High Diligence 5.9X (4.1years)
Overall Multiple for Low Diligence 1.1X (3.4 years)
Median: 20 hours
26% involved over 40 hours
-
10
20
30
40
50
60
70
< 1X 1X to 5X 5X to 10X 10X to 30X > 30X
Exit Multiples
Perc
ent o
f Exi
ts
Low Diligence High Diligence
Relationship to Industry Expertise50% of deals were not related.
When related, they typically had 14 years of experience
High 3.7X (4.0 years)Low 1.3X (3.6 years)
-
10
20
30
40
50
60
70
< 1X 1X to 5X 5X to 10X 10X to 30X > 30X
Exit Multiples
Per
cent
of E
xits
Low Industry Expertise High Industry Expertise
Impact of ParticipationMentoring, Board, Financial Monitoring
High = 1 or 2 times per monthLow = 1 or 2 times per year
High 3.7X (4.0 years)
Low 1.3X (3.6 years)
-
10
20
30
40
50
60
< 1X 1X to 5X 5X to 10X 10X to 30X > 30X
Exit Multiples
Per
cent
of E
xits
Low Participation High Participation
Relationship with Follow On Investment (Same Angel)
No 3.6X (3.3 years)
Yes 1.4X (3.9 years)
30% of deals had follow on investments
-
10
20
30
40
50
60
70
80
< 1X 1X to 5X 5X to 10X 10X to 30X > 30X
Exit Multiples
Per
cent
of
Exi
ts
Follow-On YesFollow-On No
Venture Capital Involvement35% of deals took on VC investment at some point
-
10
20
30
40
50
60
70
< 1X 1X to 5X 5X to 10X 10X to 30X > 30X
Exit Multiples
Perc
ent o
f Exi
ts
VC No VC
Thoughts and Questions?
• We’ll continue developing new programs for angel groups through:– ACA Annual Members Meeting at Summit– Regional meetings– Surveys– Open to ongoing suggestions
Need More Information?
Marianne HudsonAngel Capital Association8527 Bluejacket StLenexa, KS 66214913-894-4703mhudson@angelcapitalassociation.orgwww.angelcapitaleducation.orgwww.angelcapitalassociation.org
