Don Dodge covers the Angel Capital report from Center for Venture Research for the US Angel space. Some quick stats:
- 258,200 active angels invested $26b in 57,120 companies in 2007. VCs invested $29.4b in 3,813 companies. The ratios are revealing in the kind of pipeline it takes for a vibrant ecosystem, and proportionate amount of dollars invested by each constituent.
- Average angel group invests $2M per year in 8 companies ($250K per investment). One thing I have always maintained is that there are too few angel groups in India – some of them being Indian Angel Network, Mumbai Angels and TiE Chennai Fund. At IAN, our average deal size has been similar, though intuitively it might seem that seed stage in India might take lesser money.
- Annual returns for angel exits are 27.7% – that number is low! For the risk and time investment that angels make, I would reckon the expectations are higher, especially since 2007 was a reasonably good year from exits perspective
I believe that angel investment is not just a function of putting money, but about deep understanding of specific sectors, and hence the ability to value-add in those kinds of investments. The formation of angel groups is another enabler, as it provides diversification, with the same money and time commitment. I would love to get the group’s views on what can be done to encourage and facilitate more angel investments in India.
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