RESEARCH TRIANGLE PARK – Research Triangle-based RTP Capital topped the list of the most active Angel Investor groups in the Southeast, according to the 2017 HALO Report.

Halo report logo

This is the seventh annual HALO Report released by the Angel Resource Institute (ARI) and Florida Atlantic University’s Tech Runway. Its benchmarks are closely followed by the angel investor and venture capital communities alike.

“Working with researchers and staff from Florida Atlantic University provided an analytical depth and rigor to the HALO Report that was impressive,” said Gwen Edwards, chair of ARI.

Key findings from the 2017 report include:

  • The trend of angel groups investing outside their headquarter states continues. In the Southeast, 56 percent of deals were in the Angel Groups’ own region, compared to 83 percent in 2016.
  • Software and healthcare IT dominate as the preferred investment sector for angel groups. In the Southeast, software deals accounted for just over a quarter of angel group investments.
  • The ratio of new investments vs. follow-on rounds increased. In the Southeast, 93 percent were new investments.
  • The number of deals with women as founders increased to 13 percent nationally. In the Southeast, however, the percentage of deals in startups led or founded by women decreased 1.84 percent to only 4 percent of all investments.
  • There was a noticeable increase in the use of convertible notes for first-time investments. In the Southeast, they accounted for 34 percent of investments, while 63 percent were in preferred stock and 3 percent were debt or other instruments.
  • Average deal size was $637,000, but the median was only $270,000, due to more early stage and first time investments. Syndication, in which multiple angel groups invest in a startup, continues to increase and accounted for 280 deals nationally.
  • Pre-money valuations fell slightly from $3.65 milion to $3.5 million nationally, but were at $4 million in the Southeast.
  • Angels are doing a lot of smaller first round investments.
  • The influence of incubators and accelerators was noted, and future reports may delve more deeply into their role.

Following RTP Capital, the other most active angel groups in the Southeast were: Charlottesville Angels, The Launch Place, Blu Venture Investors, and Chattanoonga Renaissance Fund.

Round sizes in the Southeast averaged $350,000, with average investment per group at $283,000.

Deals by industry in the Southeast

  • Software deals accounted for 25.3 percent of the deals in the region;
  • Consumer products and services, 19.6 percent;
  • Healthcare, 18.3 percent;
  • Business products and services, 14.9 percent;
  • Internet and mobile, 4.5 percent;
  •  Other sectors, 17.4 percent.

Texas and California are both treated as separate, single regions. The Houston Angel Network landed at number two on the report’s list of the top angel networks nationally ranked by number of deals. Keiretsu Forum , with 52 chapters on three continents, led the list as the most active nationally.

Other top angel groups nationally included: Y Combinator; Central Texas Angel Network; New York Angels; St. Louis  Arch Angels; Desert Angels, Golden Seeds; Ben Franklin Technology Partner; Lauchpad Venture Group; Maine Angels, 500 Startups and Pasadena Angels.