The median increase in angel investments in start-ups went up by 40 percent last year over 2010, with an average investment round of $700,000, according to a study released by CB Insights. Of those investments, 58 percent went to Internet and healthcare companies.
Within the healthcare industry medical devices were the preferred investment choice, favored over biotech and pharmaceutical companies because of regulatory concerns. Other prominent sectors included mobile and telecom, industry and software development.
Silicon Valley Bank, CB Insights and the Angel Resource Institute conducted the study, the findings of which were released in a report in March; it incorporated data from all angel investments throughout the country.
In a Bloomberg Television interview, report co-author CB Insights Chief Executive Officer Anand Senwal noted the amounts mirrored what CB was seeing in seed venture capital investments.
One important trend he highlighted was that while venture capital investments tend to be concentrated in California, New York and Massachusetts, angel investments are spread out around the country, with investors in the southeast, Texas and areas around Detroit. “They fill a gap that the traditional investor doesn’t fill right now,” Senwal said.
Angel investors typically invest their own funds into start-ups and play more of a role in the companies than venture capitalists, who invest other people’s money.
CB Insights is a National Science Foundation-backed venture capital and angel investment database that provides real-time data on private companies, their investors and acquirers. The Angel Resource Institute is a charitable organization devoted to education, research and mentoring in the field of angel investing.
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