Angel Investing: 30 Years at-a-Glance


For those of us living and breathing angel investing day in and day out, it can be hard to remember just how much angel investing has evolved in the past few decades. At the recent ACA Summit, I recounted some of the key shifts in the environment and described the impact this has had on all of us:

30 Years Ago…was when we really started seeing innovation migrate from large corporate R&D labs (largely due to cost cutting) towards early stage ventures that were more nimble at innovating on their own.

25 Years Ago…startup companies became the primary contributor to net new job creation in the U.S. According to a 2010 Kauffman Foundation study, which notes that startups aged 3-5 years comprise less than 1% of all companies, yet generate 10% of all new jobs in a given year.

10 Years Ago…the angel community really started taking off, and since then we’ve had nearly a 400% increase in the number of angel groups operating in the U.S. and Canada.

9 Years Ago…was when we started seeing more of the VC’s moving away from seed-stage investing—though today many next-gen VCs are coming back with smaller funds that are investing earlier in the process, and some larger VCs are allocating slivers of their fund to seed.

7 Years Ago…we started seeing an uptick in the development of more sophisticated syndication networks across angel groups. This came as a direct result of angels needing to raise larger rounds to help fill the capital gap, widened by VCs moving downstream.

5 Years Ago…cloud computing and SaaS-based technologies matured to the point they could better enable capital-efficient business models, which has had a particularly significant impact on tech sector startups.

4 Years Ago…accelerators quickly grew in popularity, providing space and mentorship to entrepreneurs in exchange for a small equity investment, and alongside that, a greater volume of incubators and business competitions.

3 Years Ago…we started seeing new forms of crowdfunding models, including donation and rewards-based crowdfunding and tremendous growth in accredited portals like AngelList.

1 Year Ago…president Obama passed the JOBS Act to encourage increased funding in small businesses, and the rules the SEC is developing today is transforming the securities world as we know it.

In all, the ecosystem we’re all familiar with is undergoing radical change, and the landscape will never look the same. It’s an interesting and exciting time to be an angel investor, and for me, a fascinating time to be part of the leadership team at ACA.

With the changes to the ecosystem come new opportunities (and responsibilities) for ACA. We’re already the largest association of accredited angel investors in the world, but even still, we know we’re only serving a small sliver of the total angel population in the U.S. Many individual angel investors have historically flown under the radar, operating as solo investors. Today, many of them are realizing the importance of education, syndication, sharing best practices and the impact these capabilities has on their success as an investor.

Earlier this year, ACA announced the expansion of ACA membership to include not only angel groups, but also individual accredited individual investors, accredited portals, and family offices to provide the same benefits our angel group members have enjoyed since ACA’s inception.

As we look to the future, ACA will stay true to our mission of being the standard, trusted authority on accredited angel investing, and as new opportunities and new classes of investment emerge, we will continue serving and advocating for this community – albeit, serving a bigger slice of the pie.

Comments

Great summary David.
- Catherine Mott (BlueTree Allied Angels)  5 years ago 

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