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The state of the US venture industry

PitchBook and the National Association of Venture Capital published last week the 2017 edition about of the status of the Angel and VC industry in the United States.

From Graffiti side (early state investments) there are few statistics that are giving food us for thoughts:

  • 3,793 early stages deals (Angels and seed) executed in 2017, with a decline of 13% vs. 2016 and 33.0% vs. 2015;

  • average Angel investment of $600,000 per deal in 2017, compared to £500,000 in both 2015 and 2016;

  • average pre-money valuation of $5.0m (for Angel deals), with no relevant changes compared to 2015 and 2016.

  • Software is the sector that attract the majority of Angels capital, with over 60% of the total capital committed;

  • Hardware is the sector that attracted the lowest % of Angel investments (just 3.0% of the total);

  • Later VC deals (over £50m) increased by 2.0% in 2017 to 1,639.

There is a clear reduction in the number of angel deals, mainly related to the low number of exit in the last 12/24 months.

Tech companies stay private for long time and for an Angel Investor that means lack of founding for new investment but also more money required for follow ups investments (a sort of perfect storm for investment in new companies).

Until there will be a pick-up in the IPOs market and a change of the current mentality of the CEOs and Board of tech companies that be private is cool, I am afraid the number of Angels investments will remain flat.

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