Leading angel investing research group to launch Australian report

A North American investment research group has announced plans to partner with an Australian angel investor network to create targeted reports on Australian private investment activity.

Representatives from the Angel Resource Institute (ARI), which publishes the quarterly Halo reports, and the Australian Association of Angel Investors (AAAI) will sign a contract and commit to expanding ARI’s research this Wednesday.

“ARI has worked with AAAI for years, and we are excited to formally partner with them on the Halo Report: Australia,” said ARI chairman Michael Cain in a statement. “Angel investing is a global market, and now our research will reflect that same internationalisation.”

The most recent Halo Report reviewed the 278 angel investment deals, totalling $445 million USD in quarter three of 2013 in North America. About 80% of these companies were at seed stage.

The report found the median angel round size was just over $500,000 USD and a median pre-investment valuation of companies achieving investment was $2.5 million USD.

Mobile startups saw the largest increase in deals and dollars, with internet, healthcare and mobile companies receiving 81% of funds committed and 76% of the deals.

The report also found the majority of deals (74%) were made in the same state as the angel group.

This localised of angel investment makes an Australian specific report and associated increased information and scrutiny good news for startups, according to AAI chairman Jordan Green.

“Better information will empower better investment decisions and thus, greater success for the companies in which we invest.”

Green told StartupSmart the local startup community is often not sure how to access Australian angel investors, who are typically worth between tens and hundreds of millions.

“When entrepreneurs decide to get started, they usually won’t know that angel investors exist, who they are or how to find them,” he says.

According to Green, angel investors differ from private investors in that they are usually more proactive then private investors and bring experience and expertise into the funding relationship.

“Angel investors are still private people and reaching into their own pocket. And really anything is more likely to produce a positive outcome than investing in a risky startup,” Green says. “But they’ve decided the want to invest in startup companies usually because they have a background themselves either an entrepreneur or in a start-up team.”

While there is significant information available about venture capital and private equity funds, angel investment is notoriously challenging to keep track of given its independent and individual nature.

At an event to educate new angel investors late last year, serial investor Bill Bartee said the Australian angel investment ecosystem was still emerging and connecting.

He also detailed 12 to 14 angel groups and incubators, including Innovation Bay, Pollenizer and Startmate, as well as several micro venture capital firms such as Tank Stream Ventures, Carnegie and Blackbird.