Angel Group Update: Q2 2013

Table of Contents
Q2 2013 Highlights p. 4 National Trends p. 6

Most Active Angels p.13

Regional Trends p. 16 Sector Trends p. 21 About the Halo Report p. 24

Q2 2013 Highlights

Angel Group Update: Halo Report Q2 2013

Highlights
Median Angel Round Size Dips to $590K in Q2 p.6 Early Stage Pre-Money Valuations Remain Stable at $2.5M p.7 74% of Angel Group Deals are Syndicated p. 10

Most Active Angel Groups Total Deals Q2

Central Texas Angel Network Golden Seeds Desert Angels Dingman Center Angels Tech Coast Angels Alliance of Angels Houston Angel Network Launchpad Venture Group New York Angels Sand Hill Angels

Angel Groups Active in Education Technology

AIM Group Golden Seeds Investors Circle Maine Angels Sand Hill Angels Sound Board Angel Fund

National Trends

Median Angel Round Size Q2 2013 Stable Year Over Year, Smaller than Q1

$M

$1.00

$900K $770K

$900K $710K

$870K $700K

$970K

$590K
$0.50

$600K

$590K

$0.00

Q2 2012

Q3 2012

Q4 2012

Q1 2013 Mean Round Size

Q2 2013

Median Round Size

*Angel rounds include angels & angel groups only

Median Early Stage Pre-Money Valuation Rolling Year Steady at $2.5M (Q2 2013)

$2.5M
$1.2M
1st Quartile

$3.0M
3rd Quartile

Median

$5.5M

$0.11M

*Including all rounds with angel groups before Series A

Q2 2013 Median Round Size Trending up $1.95M when Angel Groups Co-Invest with Other Types of Investors
$M

Angels with Other Investors

$3.00

$2.52
$2.50
$2.00 $1.50 $1.00 $0.50 $0.00

$2.29

$2.48 $2.04

$2.83 $1.95

$1.47

$1.59

$1.55

$1.40

Q2 2012

Q3 2012

Q4 2012

Q1 2013 Mean Round Size

Q2 2013

Median Round Size

1H 2013 Median Round Sizes for Angel Groups in Top Sectors: Internet, Healthcare, & Mobile/Telecom

$M

$1.52
$1.50

$1.18
$1.00

$1.01

$970K $920K

$1.00

$1.10 $750K

$1.00

$0.50

$0.00

Healthcare 1H 2012

Internet 2H 2012

Mobile / Telecom 1H 2013

*For all deals involving angel groups, includes co-investors

Angel Groups Co-Invest 74% of Deals in Q2 2013

100%

27.5%
80%

27.1% 46.0%

25.9%

25.8%

60%

40%

72.5% 54.0%

72.9%

74.1%

74.2%

20%

0%

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Not Co-Invested

Angel Group Co-Investment

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Angel Groups Invest Close to Home 72% of Q2 2013 deals completed in home state of investor group & company
#
100% 90% 80%

85% 73%

85%

87%

86%

79%
76% 70%

78% 72%

70% 60% 50% 40%

Q2 2012

Q3 2012 Q4 2012 Q1 2013 Investor & Company in Same State Investor & Company in Same Region

Q2 2013

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Active Angel Groups

12

Most Active Angel Groups Q2 2013 Total Deals (Alpha Order)

Seattle, WA Austin, TX

Tucson, AZ

College Park, MD

5th

NY, MA, CA

Houston, TX

New York, NY

Boston, MA

Sunnyvale, CA

Southern CA

13

Angel Groups Active in Education Technology (Over the past 12 months)

CA, MA, NY

Alabama

National Group

Portland, ME

Sunnyvale, CA

Morristown, NJ

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Regional Trends

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Texas Jumps Out of Southwest in Q2 2013 Deals

Share of Angel Group Deals by Region Q2 2013

Northwest

New York

6.3%
Great Plains Great Lakes

8.9% 6.8% 10.5%

New England

13.6%

California

Mid-Atlantic Southwest

17.3%

7.9%
Southeast

5.8%
Texas Texas

12.0% 11.0% 11.0%

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Q2 2013 Share of Angel Group Deals by Region

Q2 2012
100% 90% 80% 70% 60% 50%

Q1 2013
10.4% 10.4% 10.4% 4.9% 10.4% 8.7%

Q2 2013
8.9% 6.8% 7.9%
New York
Great Plains Mid-Atlantic Texas Northwest

4.9% 6.3% 10.4% 6.3% 10.2%

6.8% 14.6%

11.0%
6.3% 5.8% 10.5% 12.0% 13.6% 17.3%

Southwest
Great Lakes Southeast New England

40% 30% 20% 10% 0%

13.7%
12.2% 7.7% 10.7% 16.1% 8.7% 14.2%

California

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New England Takes Lead for Share of Dollars in Q2 2013 Share of Angel Group Dollars by Region Q2 2013

Northwest

New York

4.6%
Great Plains Great Lakes

5.9% 9.7% 14.5%

New England

18.7%

California

Mid-Atlantic Southwest

17.1%

8.9%
Southeast

4.5%
Texas

10.1% 6.1%

Texas

6.1%

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Q2 2013 Share of Angel Group Dollars

Q2 2012
100% 90% 80% 70% 60% 50%

Q1 2013
7.2%

Q2 2013
5.9% 9.7% 8.9% 6.1% 4.6% 4.4% 14.5% 10.1% 18.7%
Mid-Atlantic Texas Northwest

5.3% 8.5%

New York
Great Plains

10.8%
6.8%

3.7%
9.2% 6.7% 7.7%
16.5%

8.9%
6.7% 11.7% 11.5% 10.1% 9.6% 16.6%

Southwest
Great Lakes Southeast New England

40% 30% 20% 10% 0%

8.3% 8.2% 19.3%

17.1%

California

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Sector Trends

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Internet, Healthcare & Mobile Deals Combine for 70% of Q2 2013 Deals Q2 2013 Share of Angel Group Deals by Sector
100% 90% 80% 70% 60% 50% 40% 30%

Q2 2012
9.3% 1.0% 8.8%
7.8% 6.4%

Q1 2013
14.8% 2.2% 2.2% 7.7% 3.3%

Q2 2013
11.5% 1.6% 4.2% 5.8% 6.3% 13.6%
Computer Hdwr & Svcs Other Energy & Utilities Software

12.7%

14.8%

23.0%

19.8%

19.9%

Industrial Mobile & Telecom Healthcare

20%

30.9%
10% 0%

35.2%

37.2%
Internet

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Q2 2013 Share of Angel Group Dollars by Sector

Q2 2012
100% 90% 80% 70%

Q1 2013
8.8% 3.4% 2.1% 4.2% 6.5% 14.2%

Q2 2013
4.4% 2.7% 5.8% 3.2% 5.1% 12.7%
Software Computer Hdwr & Svcs Industrial Mobile & Telecom Other Energy & Utilities

4.2% 0.9% 9.1% 7.3% 5.8%

13.4%
60% 50%

27.2%
40% 30% 20%

23.1%

35.9%

32.2%
10% 0%

35.8%

Healthcare

30.3%
Internet

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About the Halo Report

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What is the Halo Report?

Angel Group Investment Trends: The Angel Resource Institute, Silicon Valley Bank and CB Insights set out to raise awareness of early stage investment activities by angel investment groups. The Halo Report is the result. The research series highlights angel investment activity and trends in North America and provides much sought after data that has not been previously available to entrepreneurs or early stage investors. The Halo Report includes aggregate analysis of investment activity by angels and angel groups and highlights trends in round sizes, location and industry preferences. The data is collected via survey and aggregation of public data using CB Insights innovative data analyses. Get Involved: Angel groups and individual angel investors interested in including their data in the Halo Report should contact Sarah Dickey, ARI Vice-President of Research: 913-8944700 and sdickey@angelcapitalassociation.org.

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Understanding the Data: Special Round Types and Industry Sectors

The Halo Report provides analysis and trends on US angel and angel group activity. Angels and angel groups invest alone, together, and with many other types of investors. Unless otherwise noted the Halo Report data includes all rounds that have at least one angel group participating and may include other types of investors in those rounds. This report discusses angel group investment trends for 1H 2013, which represents a total of 379 deals and $461M in total rounds including co-investors.

A few charts report on an Angel Round, a special classification of investment when angel groups invest alone or just with other angels and angel groups.
Unless otherwise noted, values of less than <1% are included, but are not labeled or noted as a change in activity.

Halo Report Industry Sectors

Internet Mobile & Telecom Software Energy & Utilities Computer Hardware & Services Healthcare Industrial Automotive & Transportation Business Products & Services Consumer Products & Services Electronics Environmental Services & Equipment Financial Services Food & Beverages Leisure Media Metals & Mining Retail Risk & Security

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Halo Report Contacts

Angel Resource Institute
Sarah Dickey, sdickey@angelcapitalassociation.org The Angel Resource Institute (ARI) is a charitable organization devoted to education, mentoring and research in the field of angel investing, a growing driver of our entrepreneurial economy. ARI was founded by the Ewing Marion Kauffman Foundation. The programs of ARI include educational workshops and seminars, research projects and reports, and information about angel investing for the general public. ARI is affiliated with the Angel Capital Association, the professional association of angel groups in North America. More information is available at www.angelresourceinstitute.org.

Silicon Valley Bank

Carrie Walsh, cwalsh@svb.com Silicon Valley Bank is the premier bank for technology, life science, cleantech, venture capital, private equity and premium wine businesses. SVB provides industry knowledge and connections, financing, treasury management, corporate investment and international banking services to its clients worldwide through 28 U.S. offices and six international operations. (Nasdaq: SIVB) www.svb.com. Silicon Valley Bank is the California bank subsidiary and the commercial banking operation of SVB Financial Group. Banking services are provided by Silicon Valley Bank, a member of the FDIC and the Federal Reserve System. SVB Financial Group is also a member of the Federal Reserve System.

CB Insights
Anand Sanwal, asanwal@cbinsights.com CB Insights is a National Science Foundation-backed data-as-a-service firm that collects information on private companies and their investors and acquirers. CB Insights data and technology is used by firms to make better marketing, procurement, lending, acquisition and equity investment decisions and to gather data-driven market and competitive intelligence. The firm's data is regularly cited by leading media publications including the New York Times, Forbes, BusinessWeek and Fast Company among others. For more information, visit http://www.cbinsights.com.

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Angel Resource Institute and Silicon Valley Bank co-produce the Halo Report with data powered by CB Insights. Angel Resource Institute and CB Insights are independent third parties and are not affiliates of Silicon Valley Bank. This material, including without limitation to the statistical information herein, is provided for informational purposes only. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decision. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation, offer or recommendation to acquire or dispose of any investment or to engage in any other transaction.

2012 SVB Financial Group. All rights reserved. SVB>, SVB Financial Group, and Silicon Valley Bank are registered trademarks.

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