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Trends in the Angel Investor Market for 2009

Mark Marich

The angel investor market of 2009 has reflected a tendency for cautious spending and an appetite for new technology, according to the newly released analysis from the Center for Venture Research at the University of New Hampshire.  Investments totaled $17.6 billion in 2009, a decrease of 8.3 percent from the previous year, while the number of investments in 2009 was 57,225, reflecting a 3.1 percent increase.  The number of investors remained virtually unchanged.

The largest investment sectors in 2009 were software (19 percent), healthcare services/medical devices and equipment (17 percent), industrial/energy (17 percent), retail (9 percent) and biotech (8 percent).   
"Industrial and energy investing is a significant increase from 2008, reflecting a growing appetite for green technologies," said Jeffrey Sohl, director of the UNH Center for Venture Research at the Whittemore School of Business and Economics.  

Angels decreased their investments in seed and start-up stage companies, with 35 percent of angel investments in these stages.  This represents a 10 percent decrease from 2008.

“This decrease in seed/start-up stage and first sequence investing is the unfortunate reality of a difficult economy and little or no support from the various legislative initiatives enacted to stimulate the economy,” Sohl said.

Annual returns for angel’s exits (mergers and acquisitions and IPOs) were between 23 percent and 38 percent, but these returns were variable.  This figure does not include bankruptcies, which accounted for 40 percent of the exits in 2009.

Angel investments created 250,000 new jobs in the United States in 2009, or 4.4 jobs per investment.  This represents about 5 percent of the nation’s new jobs for the year.

For the full analysis, click here.

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