The angel investor survey says…
At FundingUniverse, we are in the process of doing an intense research study on the current Utah angel investment market. We are partnering with the heads of each of the angel groups to gather the information. Here is a quick teaser on more information to come:
- 93 Utah investors surveyed
- 49 investors said that they are still actively investing (52.69%)
- 2 investors said that they were syndicating deals, but not leading any new ones (2.15%)
- 21 investors said they are no longer investing (22.58%)
- 21 investors said that they are not making any investments outside their current portfolio (22.58%)
I have spoken to several people about this survey and have received drastically different responses. One of the questions that I have is: given the current state of the economy, are those statistics more optimistic or less optimistic that you had expected?
Comments(6)
That’s probably a little better than I would have expected, given what’s going on in Silicon Valley. But, N. Utah markets have always lagged behind national trends, and given that experts are speculating things will get worse yet, it looks like you’re in for a bumpy ride…
Those results are better than I expected. I have noticed as a company trying to get initial funding, that many investors seem to want to milk the current investments they have. I believe that right now it is tougher to get first round investment.
Better than expected on the surface, however, we are seeing some funky terms (i.e., warrant for 10% of the Company accompanying a $250k debt instrument)so if that is someone’s definition of investing, then it is about what I expected. When it comes to a traditional equity investment, pre-revenue is almost completely dead in the water and valuations are 30% to 50% lower than just a year ago. As a result, many entrepreneurs are foregoing or seriously reducing the amount of capital that they are seeking. Many are finding creative ways to trade equity for development resources or to negotiate up-front fees that will be repaid with product at a 50%+ discount later.
I’d have to guess that of the 49% that say that they are “actively investing”, that means that they are open to investment ideas if the exact right one comes and they have the liquidity to do it, but I’d bet that not that many have opened their checkbooks in the last 6 months.
Interesting, I am a little surprised. From the investors and groups I have spoken to, I have experienced about the same response. I agree with Derek, obviously those that are saying they are still interested they have the liquidity to do so, however are they putting their money where their mouths are? I know several groups that have the liquidity and are still investing, but it is cherry picking season for them obviously. I also have a few investors who are very liquid, but they are extremely nervous on what is going to happen to their current investments in the next 12-18 months, and so therefore have stalled any new ventures.
[...] mentioned a few weeks back that we were conducting some in-depth research on Angel Investing. Well, on Tuesday, we shared some more information with the world as the Utah Valley [...]