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Halo Report - Q3 2012 - Angel Investment Data

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					Angel Group Update: Q3 2012
What is the Halo Report™?




 Angel Group Investment Trends: The Angel Resource Institute, Silicon Valley
 Bank and CB Insights set out to raise awareness of early stage investment
 activities by angel investment groups. The Halo Report is the result. The
 research series highlights angel investment activity and trends in North America
 and provides much sought after data that has not been previously available to
 entrepreneurs or early stage investors.

 The Halo Report includes aggregate analysis of investment activity by angels and
 angel groups and highlights trends in round sizes, location and industry
 preferences. The data is collected via survey and aggregation of public data using
 CB Insights innovative data analyses.

 Get Involved: Angel groups and individual angel investors interested in including
 their data in the Halo Report should contact Sarah Dickey, ARI Research Director:
 913-894-4700 and sdickey@angelcapitalassociation.org.




                                                                                      2
   Angel Group Update: Q3 2012 Highlights

Median Angel Round Size Hits            Early Stage Valuations Remain
   Five Quarter High p.4                Stable p.5
In Q3 2012, the median size of angel    The median pre-money valuation
& angel group syndicate rounds          for early stage angel group deals is
reaches $640K, the highest in the       $2.6M, slightly down from $2.7M in
five quarters the data has been         Q2, for a rolling 12 month period.
tracked.

Mobile Sees Jump p.12-13                Most Active Angel Groups p.14
Investment in mobile companies          •Launchpad
increases in both deals and dollars;    •Central Texas Angel Network
share of deals reaches five quarter     •Investor’s Circle
high.                                   •Golden Seeds
                                        •Tech Coast Angels
Syndications Decline in Q3 p.7          •Sand Hill Angels



             10% of Angel Group Deals are structured as convertible debt,
 New
             2012 YTD


                                                                               3
   Median Angel Round Size* Reaches Five Quarter High at $640K
   Q3 2012
               $M



       $1.50


                                          $1.21                                    $1.22
                                                       $0.96        $0.90
       $1.00
                $0.87

                                                                                $0.64
                     $0.54                          $0.55         $0.53
                                     $0.50
       $0.50




       $0.00
                    Q3 2011        Q4 2011         Q1 2012       Q22012        Q3 2012

                               Median Round Size             Mean Round Size


*Angel rounds include angels & angel groups only



                                                                                           4
    Median Early Stage Pre-Money Valuations Remain Stable
    $2.6M for the rolling year ending Q3 2012, slightly down from $2.7M in Q2 2012




                                                                  $4.0M      $6.6M
                                                          $2.6M
                                    $1.6M

          $.51M

                                     1st             Median         3rd
                                   Quartile                       Quartile




*Including all rounds with angel groups before Series A



                                                                                     5
Median Round Size is $1.59M when Angel Groups Co-Invest with
Other Types of Investors
          $M


                           Angels with Other Investors
  $4.00
                                                          $3.27
  $3.50            $3.45                     $3.16                       $3.43
                                 $3.18
  $3.00

  $2.50

  $2.00
                $1.68                                                 $1.59
                             $1.51        $1.50         $1.50
  $1.50

  $1.00

  $0.50

  $0.00
               Q2 2011     Q4 2011       Q1 2012       Q2 2012       Q3 2012

                         Median Round Size         Mean Round Size




                                                                                 6
Share of Co-Invested Deals Declined for Angel Groups in Q3 2012



         %

  100%


             29.6%                       25.8%        31.1%
   80%                       35.7%
                                                                     51.0%

   60%


   40%
             70.4%                       74.2%        68.9%
                             64.3%
                                                                     49.0%
   20%


   0%
             Q3 2011        Q4 2011      Q1 2012     Q2 2012         Q3 2012
                       Not Co-Invested   Angel Group Co-Investment




                                                                               7
    Southeast Rivals California for Share of Angel Group Deals
    in Q3 2012

              %
                                                                  New England
                  Northwest                                           14.3%
   ALASKA
                   8.3%                                    New York
                                                               6.5%
                                  Great Plains
                                                 Great Lakes
                                    5.2%           9.7%               Mid-Atlantic

 California
                                                                        9.1%
 21.4%
                      Southwest
                                                    Southeast
                       13.0%                         19.5%
HAWAII




                                                                                     8
 Angel Group Quarterly Deal Trends:
 Southeast has an active Q3 2012

100%
       4.7%       6.7%      7.2%      3.1%     6.5%
       1.9%                                              New York
        4.7%      2.9%                6.1%     5.2%
90%                         4.5%
        5.7%      8.7%                9.2%     2.6%
                            9.0%                         Great Plains
80%                                            7.8%
        13.2%    11.5%      8.1%     10.4%
                                               13.0%     Mid-Atlantic
70%
                 10.6%               12.9%
       15.1%               13.5%                         Northwest
60%                                             9.7%

50%     8.5%     16.3%     12.6%                         Southwest
                                     17.2%
                                               19.5%
40%                                                      Great Lakes
       19.8%     15.4%     13.5%
                                     12.3%
30%
                                               14.3%     Southeast
20%              11.5%     17.1%     11.0%
                                                         New England
       26.4%
10%
                                     17.2%     21.4%
                 16.3%     13.5%                         California
 0%
       Q3 2011   Q4 2011   Q1 2012   Q2 2012   Q3 2012




                                                                        9
    Angel Group Dollars are Invested Nationwide
    Half Remains in California and New England Q3 2012


            $M
                                                                   New England

                  Northwest
                                                                        21.3%
   ALASKA                                                   New York
                    5.0%                                        8.1%
                                   Great Plains
                                                  Great Lakes
                                     2.0%           5.5%               Mid-Atlantic

 California
                                                                         8.3%
 28.0%
                      Southwest
                                                     Southeast
                        5.6%                          16.2%
HAWAII




                                                                                      10
 California & New England Receive Half of Round Dollars
 in Q3 2012

100%                                  1.4%
        5.5%      8.6%      5.8%       4.5%    8.1%      New York
        1.6%      1.2%      6.2%
90%      2.7%                         8.2%     2.0%
        6.7%     10.1%                         8.3%      Great Plains
                           13.0%      5.2%
80%               3.0%                         5.0%
       15.1%     10.0%               13.6%     5.6%      Mid-Atlantic
70%                         6.9%
                                               5.5%
60%              11.7%     11.4%                         Northwest
       16.7%                         18.2%     16.2%
50%                        12.0%                         Southwest
                 13.8%
       11.7%                          6.2%
40%                         6.6%      6.9%               Great Lakes
                                               21.3%
                 10.8%
30%
                           19.9%                         Southeast
20%    38.6%                         35.7%               New England
                 30.7%                         28.0%
10%                        18.2%
                                                         California
 0%
       Q3 2011   Q4 2011   Q1 2012   Q2 2012   Q3 2012




                                                                        11
 Internet Sector Still Dominates Angel Group Deals;
 Mobile Deals Reach Five Quarter High
   %

100%

                 15.4%     10.8%
90%                                  19.6%     16.9%     Other
       22.6%                5.4%
                  2.9%                          2.6%
80%                         8.1%      0.6%      3.9%     Energy & Utilities
        4.7%     10.6%                6.1%
                            4.5%                4.5%
70%     4.7%      1.9%                3.7%
        1.9%                          5.5%      5.8%     Industrial
       0.9%       6.7%      9.0%
60%    11.3%                                   14.9%
                 11.5%               11.7%
                           12.6%                         Electronics
50%

       22.6%               15.3%                         Consumer Pdcts &
40%              22.1%               23.9%     20.1%
                                                         Svcs
30%                                                      Mobile & Telecom

20%                                                      Healthcare
       31.1%               34.2%               31.2%
                 28.8%               28.8%
10%
                                                         Internet
 0%
       Q3 2011   Q4 2011   Q1 2012   Q2 2012   Q3 2012




                                                                              12
 Healthcare is Back with Largest Share Dollars (Barely); Mobile
 Share Jumps Q3 2012
   $M

100%
                   8.4%      6.3%     10.2%
90%                          4.3%               18.1%     Other
        22.0%      9.3%                4.8%
80%
                            14.1%      5.5%     3.7%
                  10.0%                         2.0%      Energy & Utilities
                                       6.0%
70%
                             5.5%               7.3%
        19.4%      5.4%      3.2%     10.5%               Industrial
                                                5.4%
                   6.6%
60%      2.1%
         0.7%               17.1%
                                                16.5%     Electronics
50%      6.6%                         26.5%
                  31.6%                                   Consumer Pdcts &
40%
                            24.7%                         Svcs
        26.6%                                   23.6%
30%                                                       Mobile & Telecom

20%
                                      36.6%               Healthcare
                  28.4%     24.9%
10%     22.1%                                   23.4%
                                                          Internet
 0%
        Q3 2011   Q4 2011   Q1 2012   Q2 2012   Q3 2012




                                                                               13
Most Active Angel Groups: Total Deals in Q3 2012




    Boston, MA            Austin, TX           National Group




    CA, MA, NY           Southern CA
                                                   Sunnyvale, CA



                                                                   14
Most Active Angel Groups: Mobile / Telecom deals for rolling year ending in
Q3 2012




    Seattle, WA            New York, NY
                                                  Menlo Park, CA




   Sunnyvale, CA           Huntsville, AL           Boston, MA




                          Atlanta, GA


                                                                              15
Understanding the Data:
Special Round Types and Industry Sectors


The Halo Report™ provides analysis and trends on US angel and angel group activity.
Angels and angel groups invest alone, together, and with many other types of investors.
Unless otherwise noted the Halo Report data includes all rounds that have at least one
angel group participating and may include other types of investors in those rounds.
This report discusses angel group investment trends year-to-date for 2012. This
represents 541 deals and $804.4M in total rounds including co-investors.
A few slides report on an “Angel Round,” a special classification of investment for when
angel groups invest alone or just with other angels and angel groups.
Unless otherwise noted, values of less than <1% are included, but are not labeled or
noted as a change in activity.

Halo Report Industry Sectors
Internet                       Industrial                     Financial Services
Mobile & Telecom               Automotive & Transportation    Food & Beverages
Software                       Business Products & Services   Leisure
Energy & Utilities             Consumer Products & Services   Media
Computer Hardware & Services   Electronics                    Metals & Mining
Healthcare                     Environmental Services &       Retail
                               Equipment                      Risk & Security



                                                                                           16
Halo Report Contacts


Angel Resource Institute
Sarah Dickey, sdickey@angelcapitalassociation.org
The Angel Resource Institute (ARI) is a charitable organization devoted to education, mentoring and research in the field of angel
investing, a growing driver of our entrepreneurial economy. ARI was founded by the Ewing Marion Kauffman Foundation. The
programs of ARI include educational workshops and seminars, research projects and reports, and information about angel investing
for the general public. ARI is affiliated with the Angel Capital Association, the professional association of angel groups in North
America. More information is available at www.angelresourceinstitute.org.


Silicon Valley Bank / SVB Accelerator
Carrie Walsh, cwalsh@svb.com
Silicon Valley Bank is the premier bank for technology, life science, cleantech, venture capital, private equity and premium wine
businesses. SVB provides industry knowledge and connections, financing, treasury management, corporate investment and
international banking services to its clients worldwide through 27 U.S. offices and six international operations. (Nasdaq: SIVB)
www.svb.com.
Silicon Valley Bank is the California bank subsidiary and the commercial banking operation of SVB Financial Group. Banking services
are provided by Silicon Valley Bank, a member of the FDIC and the Federal Reserve System. SVB Financial Group is also a member
of the Federal Reserve System.


CB Insights
Anand Sanwal, asanwal@cbinsights.com
CB Insights is a National Science Foundation-backed data-as-a-service firm that collects information on private companies and their
investors and acquirers. CB Insights data and technology is used by firms to make better marketing, procurement, lending, acquisition
and equity investment decisions and to gather data-driven market and competitive intelligence. The firm's data is regularly cited by
leading media publications including the New York Times, Forbes, BusinessWeek and Fast Company among others. For more
information, visit http://www.cbinsights.com.




                                                                                                                                        17
©2012 SVB Financial Group. All rights reserved. SVB>, SVB>Find a way, SVB Financial Group, and Silicon Valley
Bank are registered trademarks.
Angel Resource Institute and CB Insights are independent third parties and are not affiliated with SVB Financial
Group.
This material, including without limitation to the statistical information herein, is provided for informational purposes
only. The material is based in part on information from third-party sources that we believe to be reliable, but which
have not been independently verified by us and for this reason we do not represent that the information is accurate
or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on
in making an investment or other decision. You should obtain relevant and specific professional advice before
making any investment decision. Nothing relating to the material should be construed as a solicitation, offer or
recommendation to acquire or dispose of any investment or to engage in any other transaction.




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DOCUMENT INFO
Description: The Halo Report issued by Silicon Valley Bank, CB Insights and the Angel Resource Institute for Q3 2012 sees angel investment deal sizes, investments in mobile companies climb while valuations dip and syndications decline.