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Angel Investment Market Grows By 10% In 2006
Written by Jay Turo on Tuesday, March 27, 2007
According to the 2006 Angel Market Analysis released yesterday by the Center for Venture Research at the University of New Hampshire, in 2006, the angel investor market experienced steady growth. Total angel investments reached $25.6 billion, which represents an increase of 10.8 percent over 2005. According to the study, 51,000 entrepreneurial ventures received angel funding in 2006, a 3 percent increase from 2005. According to Jeffrey Sohl, director of the UNH Center for Venture Research at the Whittemore School of Business and Economics, "If the angel market is to achieve sustainable growth, there needs to be a reasonable augmentation in active investors, and thus, level of participation is an important consideration. While the number of angel organizations, and individuals that are members of organized angel groups, is increasing, there is a larger percentage of latent angels (individuals who have the necessary net worth, but have not made an investment)."
The largest share of angel investments in 2006 went to healthcare services, medical devices and equipment (21% of total investments), followed by software (18%) and biotech (18%). The remaining 43% of investments were approximately equally spread across high-tech sectors. "Since the angel market is essentially the spawning ground for the next wave of high growth investments, this sector diversification provides an indication of investment opportunities that will be available for later stage institutional investors," Sohl said. The increase in angel investing is an extremely positive sign for the venture industry. More money means more startups, more jobs, more innovation, and as Sohl mentioned, more companies from which venture capital firms can choose to fund and take to the next level.
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