Angel investors—accredited individuals who collectively support the American startup industry with some $24 billion of capital per year – maintain diversified portfolios that represent roughly 5 percent of total held assets, with median investments of $25,000 per deal. The Angel Capital Association (ACA) and Wharton Entrepreneurship released these and other early insights from the ongoing “The American Angel” survey, which is designed to provide the deepest research to date into the characteristics of angel investors. The survey is open for more angels to participate.
Additional preliminary research findings to date:
- Angels invest in nearly 16 companies over their portfolio lifetime.
- Angels typically make additional (follow-on) investments in companies, with a median of three follow-on deals over time.
- Angels financed a median of two companies each in 2015.
- The longer angels invest, the more checks they write and the larger their portfolios. Angels who started investing in the 1970s and 1980s have written on average 45.6 checks, compared to 4.4 checks written by individuals who started angel investing in 2014 or later.
- Angel investors remain positive on the early-stage market: 27 percent indicate they will increase angel investments this year, 53 percent expect to maintain their level of investment, and only 20 percent expect to decrease.
- While the majority of angel investors are men more than 20 percent of respondents to date are women.
The confidential survey is open and seeking participants. It is funded by Rev1 Ventures’ John Huston Fund for Angel Professionalism and is administered by Wharton Entrepreneurship. The survey closes in fall 2016.
The American Angel Campaign is the first comprehensive study of U.S. angel investor demographics, including their path to investment, mindset and approach—and seeks to demystify this generally private type of investing. Most angels funding startups are exempt from securities registration, and detailed information on investors is often not publicly available. To date, the campaign has garnered about 1,000 participants.
“The information that is emerging gives an exciting preliminary picture of how angel investors operate and support a diversified portfolio of companies,” said Marianne Hudson, executive director of ACA. “We hope to attract many more participants, so that we can further solidify facts about angels and how critical they are to the job-creating universe of early-stage companies.”
ACA believes these insights will be essential to strengthening and growing the startup ecosystem, and will assist the association in its efforts to address issues impacting startups and investors with regulators, legislators and economic development entities. All active, accredited angels are encouraged to take this short, confidential survey which will also help dispel or confirm many long-held assumptions about angel investing.
Laura Huang, Assistant Professor of Management at the Wharton School, is leading the research effort and administration of the survey. “What we are seeing is real data never before available at such depth that identifies angels as skilled, tenacious and diversified investors who bring significant professional experience and business expertise to their investment approach,” said Huang. “We hope to obtain thousands of additional respondents over the next few months to ensure this data continues to provide illumination into the mindset of this investor.”