Report: Valuations on the rise in angel deals as cash flows to Internet companies

Angel in Guisley. Photo via Baldur McAqueen

Angel investors are spreading their wings, pumping money into Internet companies at a rapid pace, increasingly at higher valuations than earlier this year. That’s one of the findings released today in the Halo Report, a report on angel investment activity in the U.S. conducted by Silicon Valley Bank, CB Insights and the Angel Resource Center.

Pre-money valuations for early-stage startups increased to $2.7 million during the second quarter, up from $2.5 million in the first quarter. Meanwhile, investors are spending more time pumping dollars into Internet upstarts. According to the report, Internet companies accounted for 32 percent of all deals during the first half of 2012, outpacing healthcare (26 percent); and mobile/telecom (11.4 percent). Internet companies also attracted more dollars, marking the first time that the category has outperformed healthcare in share of dollars invested.

“Angel investors seem to be following a trend similar to the one we’ve witnessed recently in the venture capital market: Internet and Mobile are increasingly becoming attractive areas for investment while healthcare is seeing its share decrease in terms of both deals and dollar,” said Jonathan Sherry, Co-Founder of CB Insights.

Here’s a visual look at a breakdown of the results: