Individual Investors Lead The Way

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Posted Jan 25, 2012

The numbers may be surprising to some. Surely Angels investors won't take the information as a surprise, to the rest, well it may seem out of left field. According to the Wall Street Journal, Angel Investors in the United States, in 2009, invested $17.7 Billion. The number itself is significant, but even more so when you compared to the $18.7 Billion that was invested by Venture Capital. 

That the individuals and groups that create Angel Investors were able to nearly match the investments of the dominant Venture Capitalists seems out of left field, but I'm sure Angels will tell you it is something that has been brewing for a long time. After all, they crept in and effectively took over Seed financing. Angels have becoming stalwarts of the A round, and now are bringing their game to the later stages of financings. In the first half of 2011, $8.9 Billion was invested by Angels, a whopping 39% of that was invested into Seed and Startup companies, up from 26% the year prior.

Angels and individual investors are the heavy hitters. If you're not in a tech hub, like New York, Boston, or San Francisco, then chances are Angels and Individuals are who startups turn to for their financing and funding. Which speaks even better to the strength of these groups. In Europe, where there are tech hubs, but none as prolific as in the US, Angel Investors invested $5.5 Billion in 2009, $250 Million than European Venture Capital invested. 

The numbers are staggering, but the individual investor and the business angel have power in the private investment game. It isn't just between Venture Capital and Private Equity. 

So what does it take you to get involved in private investments, how would you get into investing in startups?