Center for Venture Research
Director, Jeffrey Sohl
www.unh.edu/cvr (603)862-3341
THE ANGEL INVESTOR MARKET IN Q1Q2 2009:
A HALT IN THE MARKET CONTRACTION
Market Size
The angel investor market in Q1,2 2009 experienced a considerable decline in investment dollars
from last year but exhibited a slight increase in the number of investments. Total investments in
Q1,2 2009 were $9.1 billion, a decrease of 27% over Q1,2 2008, according to the Center for
Venture Research at the University of New Hampshire. However, a total of 24,500
entrepreneurial ventures received angel funding in Q1,2 2009, a 6% increase from Q1,2 2008,
and the number of active investors in Q1,2 2009 was 140,200 individuals, virtually unchanged
from Q1,2 2008. The significant decline in total dollars, coupled with the small increase in
investments resulted in a smaller deal size for Q1,2 2009 (a decline in deal size of 31% from
Q1,2 2008). These data indicate that while angels have not significantly decreased their
investment activity, they are committing less dollars resulting from lower valuations and a
cautious approach to investing. While the market exhibited a decline from Q1,2 2008, when
compared to the market correction that occurred in the second half of 2008 these data indicate
that the angel market appears to have reached its nadir in Q1,2 2009.
Sector Analysis
Healthcare Services/Medical Devices and Equipment accounted for the largest share of
investments, with 28% of total angel investments in Q1,2 2009, followed by Software (14%),
Electronics/Hardware (14%), Industrial/Energy (13%), which reflects a continued appetite for
green technologies, and Retail (8%) rounds out the top five investment sectors. Retail has
solidified its presence in the top five sectors, mainly due to a continued interest in social
networking ventures.
Sector Healthcare Software
Electronics/
Hardware
Industrial/
Energy
Retail
Telecom
Deals
28%
14%
14%
13%
8%
5%
Job Growth
Angel investments contin