All About Angel Investing - Part 2

"Groups may be willing to commit additional funds in subsequent financings. According to market research:

• 20 percent of angels invested $25,000 or less per deal (in one to four deals per year).
• 40 percent of angels invested between $25,000 and $100,000 per deal.
• 25 percent of angels invested $100,000 to $250,000 per deal.
• 15 percent of angels invested more than $250,000 per deal."

"In “The Angel Investor’s Handbook” by Gerald Benjamin and Joel Margulis, the authors point out that private investors are investing $40 billion a year into as many as 140,000 early stage companies, which is approximately 4 percent of the 3.5 million start-ups in the U.S."

"This further suggests that there are about 400,000 angels investing each year who are filling this capital gap. This pool of investment is growing 14 percent to 20 percent per year versus pension fund growth of only 8 percent per year. The key issue with angel investors is that they must be in a position to lose the entire investment or lose access to it for an extended period of time."

"New companies created 20 million new jobs between 1979 and 1993 (or 67 percent of total job creation) with an additional 12 million jobs created between 1993 and 1997. Start-ups create 27 percent of these new jobs. Small companies represent 47 percent of all sales, 52 percent of business net worth and 99 percent of all companies in the U.S., according to the angel handbook."

"Additionally, 55 percent of all innovation comes through these small companies."

"According to research on angel investors, 65 percent of them like to invest in deals reasonably close to where they live (within 300 to 500 miles). The remaining 35 percent are comfortable with an investment in a company further away so long as the lead investor lives geographically close to the new company."

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For more information, visit www.EvanCarmichael.com.