Angel investors historically have placed bets at the earliest stages of a company’s formation, oftentimes when the business is nothing more than an idea on the back of a napkin.
But as the venture capital marketplace shifts, so is angel investing. According to a new report out today from The Angel Resource Institute, Silicon Valley Bank and CB Insights, the majority of angel investments in 2012 were made in companies that were already producing revenue.
Sixty three percent, according to the 2012 Halo Report.
So, if you’re an entrepreneur thinking about raising cash, you better get that sales force chugging to make sure you’ve got a product that customers actually want.
The report also found that pre-money valuations for angel-backed companies remained steady in 2012 at $2.5 million. The median amount invested in an angel round in 2012 was $600,000, down from $625,000 in 2011.
There was also a dose of good news for entrepreneurs in the Pacific Northwest, which has seen some troubling trends in terms of venture capital firms closing up shop or scaling back funds. According to the report, the Northwest gained share in terms of angel investments when compared to California and New England.
We’ve profiled the emergence of some new Seattle angel investors, including former Facebook general counsel and Amazon.com executive Rudy Gadre and former Smilebox CEO Andrew Wright. Both are making bets around the Seattle area, helping to fill a gap left by the VC firms.
Last week, we reported on a study from CB Insights which showed that venture capital investing in Washington state fell precipitously in the first quarter. (See: VC investing tanks in Washington, overtaken by Oregon for first time since 1993).
Here’s a good summary of the findings from the Halo Report: