The value of United States angel investments in 2008 dropped by 26.2 percent from the year before, but the number of deals was relatively unchanged, according to the 2008 Angel Market Analysis released by the Centre for Venture Research at th eUniversity of New Hampshire.

Total investments in 2008 were $19.2 billion, a decrease of 26.2 percent from 2007's investments of $26 billion.  the number of entrepreneurial ventures which received angel funding fell a modest 2.9 percent decrease - from 57,120 in 2007 to 55,480 in 2008.  The number of active investors in 2008 was 260,500 individuals, virtually unchanged from 2007's 258,200 individuals.

Healthcare services/medical devices and equipment accounted for the largest share of investments, with 16 percent of total 2008 angel investments, followed by software (13 percent), retail (12 percent) and biotech (11 percent).  Industrial/energy accounted for 8 percent of investments, reflecting a continued appetite for green technologies, and media (7 percent).

Mergers and acquisitions represented 70 percent of the 2008 angel exits, and IPOs 4 percent, and bankruptcies accounted for 26 percent.  Annual returns for angel's exits (mergers and acquisitions and IPOs) were 22 percent, however, these returns were quite variable.

Angels maintained their positions as the largest source of US seed and start-up capital, with 45 percent of 2008 angel investments in the seed and start-up stage, a slight increase of 6 percent over 2007.  Angels also exhibited an interest in post-seed/start-up investing with 40 percent of investments in this stage, also an increase from 2007.  Expansion stage investing (14 percent) showed the largest decline.  New, first sequence, investments represent 63 percent of 2008 angel activity, unchanged from the last two years, indicating a continued preference for new, as opposed to follow-on investments.

(Source: NZ Young Company Finance)