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Number of Angel Investors, Early Stage Investments Drop

Mark Marich

While the overall number of angel investors dropped substantially last year, don’t blame women angels—the percentage of women involved in angel investing nearly doubled within the past year.

According to a new report from the University of New Hampshire’s Center for Venture Research, the total number of active angel investors in 2012 dropped by 15.8% to 268,160. However, female angel investors in 2012 represented 21.8% of the angel market, up from 12.2% in 2011. The percentage has more than quadrupled within the past 10 years.

So what impact does the smaller number of total investors mean to the bottom line? Not much, it seems.

Total investments actually increased slightly (1.8%) over 2011 figures to reach $22.9 billion. Similarly, the total number of entrepreneurial ventures receiving angel funding increased by 1.2% to 67,030.

Scale-up, Not Startup

However, there is a legitimate reason for concern about the latest figures. While the total investments remained stable, those dollars are more geared toward scale-up than startup. The percentage of angel investments directed toward expansion financing nearly doubled (from 15% in 2011 to 29% in 2012). Seed and startup stage capital dropping from 42% to 35% and early stage capital dropping from 40% to 33%.

With fewer dollars available to unleash their ideas, where will entrepreneurs turn?

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