The Center for Venture Research at UNH today released their annual Angel Capital report for 2007. Angels invested $26 Billion in 57,120 companies, up slightly from last year. The report says there are 258,200 active angel investors in the USA. By comparison, Venture Capitalists invested to $29.4B in 3,813 companies in 2007.
Software accounted for the largest share of Angel investments, with 27%, followed by Healthcare Services/Medical Devices and Equipment (19%) and Biotech (12%).
Angel Investors continue to be the largest source of seed stage and early stage start-up capital, with 39% of 2007 angel investments going there.
Mergers and acquisitions represented 65% of the angel exits, and IPO's 4%, in 2007. Unfortunately, bankruptcies accounted for 27% of the exits. Overall annual returns for angel’s exits were 27.7%.
Angels tend to invest just like VCs except they do smaller investments $200K to $2M and they do about 15 times as many deals. However, Angels have the same investment criteria and expectations of significant returns. The "average" angel group makes 8 investments per year for a total of about $2M. The average deal size (seed stage) is about $250K.
The larger angel groups in Silicon Valley and Boston do significantly more deals and invest between $350K and $600K per round, and maybe $1.5M to $2M per company.
Keiretsu Forum is the largest angel investor group in Silicon Valley. I don't have the numbers for 2007, but I know they invested $51M in 2006 in 30 companies. Several of these were real estate deals so it skews the average deal size substantially. Keiretsu Forum has invested $115M in 125 deals since its founding.
Band of Angels is another large Angel group in Silicon Valley having invested $130M in 220 companies since its founding.
Boston has around 20 Angel Capital groups. Some of the larger groups are; Beacon Angels, Boston Harbor Angels, Common Angels, eCoast Angels, Hub Angels, and Launchpad. See the Angel Capital Association site for leads to angel groups in other parts of the country.