RESEARCH TRIANGLE PARK – Angel investing in the Southeast is growing.
But there’s one serious shortcoming: lack of diversity.
Only 5 percent of founders/CEOs were non-white. Compare that to the national average of 11.5 percent, according to a report released by the Angel Capital Association (ACA) today.
It’s not much better for women.
Only 15 percent of founders/CEOs were female in the Southeast – significantly below the nation’s average of 21 percent.
“I personally take this as a challenge,” ACA board member Elaine Bolle told a 100-strong crowd at RTP Foundation’s headquarters on Tuesday, who had gathered for the group’s Southeast regional meeting.
“When you think of the racial profile of the Southeast, we have more diversity racially here. We should be able to capitalize on it.”
The 2019 report analyses data on over 1,150 deals representing investments valued at $228 million from 68 major angel groups – of which the Southeast accounts for 21 percent, said Bolle.
Despite the Southeast’s bleak stats on diversity, the ACA painted a rosier picture for the nation as a whole.
“Though the majority of angel-backed founders and CEOs are male, the number of female-led companies receiving angel capital has grown steadily over the years, currently at 21 percent — a much higher rate than VC investments, the report noted.
‘Angel investing growing in Southeast’
Regionally, the report focused on 15 angels groups across nine states in the Southeast. In total, angel investors in this group invested $38 million.
In terms of deals, Virginia led the pack with 62 deals, followed by North Carolina with 37. The remainder included South Carolina (22), Florida (14), Louisiana (12), Kentucky (10), Tennessee (10) and Georgia (6).
Meanwhile, investment by these groups tended to be lower– around $700,000 — compared to the ACA median of $1.2 million.
The top areas of investment were healthtech (14 percent), Software as a Service (12 percent) and BioTech (11 percent).
“We are growing, and growth is good for our companies and our groups,” Bolle said. “There’s great diversity in what we invest in, and how we invest – and that again speaks to growth and opportunity. We work well together.”
Ted Zoller, director of the Entrepreneurship Center at UNC Kenan-Flagler Business School, confirmed this sentiment.
“The work [angel investors are doing] is fundamentally important in drawing in the type of social capital you need to make a vibrant economy,” he said.
“I’m seeing an incredible stack of entrepreneurship in Durham. It’s one of the greatest success stories of the country, quite frankly. And Raleigh is right behind it. You’ve got to love competition.”