Angel Funders Report 2021 - Flipbook - Page 11
Key findings from ACA’s 2020 data collection and analysis include:
Angel investors increased their investments in both initial rounds and follow-on
rounds, investing more dollars and investing in more companies than prior years.
The total amount invested in 2020 represents the highest total since we began
tracking this data.
ACA member groups invested approximately $650 million in 2020*. On
average, angel groups invested a total of $4.7 million per group, an increase of
15% from 2019.
Portfolio companies raised a total of more than $4 billion, leveraging their
initial angel investments by 6X.
Individual angels spread their investments among more deals in 2020,
investing in an average of 19 deals vs. 14 deals in 2019. The investment
amount per deals decreased about 15% vs. 2019 to $245K.
Diversity in angel investing increased significantly in 2020, with funding
gaps between male and female CEOs and between white and Black CEOs
narrowing. 29% of funded CEOs were female in 2020, and for all deals across
all stages, women raised 93% of the capital raised by men. Black CEOs have
significantly increased their proportion of funded deals and reduced the perdeal funding gap, accounting for 10% of all CEOs receiving initial funding and
nearly 15% of all initial round capital.
Investments in the life sciences (health tech, medical tech, biotech) and in
enterprise technologies dominated other industries, consistent with prior
years with the added interest due to the drive to find societal level solutions to
COVID-19 challenges and pandemic remote working initiatives.
As reported elsewhere, pre-money valuations continued to increase in 2020
across all financing rounds.
Angel exits remained consistent with long-term angel and venture-backed
trends. 90% of exits are mergers and acquisitions, while less than 6% are a result
of IPO. The median exit multiple of invested capital remained strong at 1.8X.
INVESTING BY THE NUMBERS
Despite widespread turmoil and uncertainty, angels continued to invest in 2020,
which is significant given that unlike venture capitalists and other investors, angels
are investing their own personal funds. While VCs shifted their investment dollars
to later stage deals, angels doubled down to invest more dollars per group
in early-stage companies solidifying their role as the primary support for seed
stage investing. Angels invest in this asset class to leverage their experience and
expertise to help startups grow. They work with early-stage entrepreneurs closely,
often investing significant time and energy before investing dollars. Early-stage
investing is inherently risky — more than 50% of all businesses fail in their first five
years — and angels mitigate their risks by investing smaller amounts in multiple
investments across a variety of companies over time. Angel investors also balance
risk by investing with other angels.
Angel Groups Investing Patterns
On average, angel groups invested $4.7 million per group in 2020, 15% higher
than 2019 totals and more than 40% higher than 2018 totals. As shown in
Figures 1 and 2, angel groups engaged in more deals in 2020, but the average
investment per deal was lower than 2019. Angels were mitigating their risks by
spreading their dollars across more companies.
Note: Figure 1 tracks the number of deals. Figures 2A and 2B track investments
by company. There can be multiple deals in one company, so the numbers do
FIGURE 1. Angels Engaged in More Deals in 2020
Average # of Deals
Average Investment per deal
*based on sample set weighting
8 | Introduction
Angel Funders Report 2021 | 9