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Angels Spend Less, But Seed More Companies

Angel investors spent fewer dollars in the first half of the year, but stretched to fund a larger number of companies, according to a report released today by the Center for Venture Research at the University of New Hampshire.

The report estimates that angel investments in the first half of 2009 totaled $9.1 billion —  a decrease of 27 percent over the first half of 2008. However, a total of 24,500 entrepreneurial ventures received angel funding in the period, a 6 percent increase from the same period a year ago.

Jeffrey Sohl, director of the Center for Venture Research, says the data “indicates that while angels have not significantly decreased their investment activity, they are committing less dollars resulting from lower valuations and a cautious approach to investing.”

Healthcare services and medical devices accounted for the largest share of investments, with 28 percent of total angel investments in the first half of 2009, followed by software (14 percent), electronics and hardware (14 percent), industrial and energy (13 percent), which includes many green technologies, and retail (8 percent).

Angels also showed a decreased appetite for seed and start-up stage investing. In the first half of the year, 27 percent of angel investments were in the seed and start-up stage, a decrease of 19 percent over the same period in 2008.

The full report is available at: http://www.unh.edu/news/docs/CVRQ1Q209.pdf.