Angel Group Update: Q1 2013

Table of Contents

Q1 2013 Highlights p. 4

National Trends p. 6

Most Active Angels p.11

Regional Trends p. 14

Sector Trends p. 19

About the Halo Report p. 22 About the Halo Report p. 22

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Q1 2013 Highlights

3

Angel Group Update: Halo Report Q1 2013

Most Active Angel Groups – Total Deals Q1 •Alliance of Angels•Desert Angels•Golden Seeds•New York Angels•Sand Hill Angels•St. Louis Arch Angels

Highlights

• Median Angel Round Size trends up to $680K in Q1 2013

• Early Stage Pre-Money Valuations Remain Stable at $2.5M

Biggest Spenders – Most Dollars Per • 81% of deals occur in angel

groups’ home states

4

Biggest Spenders – Most Dollars Per Deal, past 12 months•Golden Angels Investors•Golden Seeds•Houston Angel Network•JumpStart New Jersey Angel Network•Nashville Capital Network•Oregon Angel Fund•Tech Coast Angels

National Trends

5

Median Angel Round Size Q1 2013 Trends up to $680K

$1.00$860K $830K

$760K

$900K$800K

$550K $550K $570K$650K $680K

$M

$0.00

$0.50

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013

Median Round Size Mean Round Size

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*Angel rounds include angels & angel groups only

$550K $550K $570K

Median Early Stage Pre-Money Valuation Rolling Year Steady at $2.5M (Q1 2013)

$2.5MMedian

$1.5M1st Quartile

$3.6M3rd Quartile $5.5M

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*Including all rounds with angel groups before Series A

1st Quartile

$0.11M

Angels with Other Investors

Q1 2013 Median Round Size $1.5M when Angel Groups Co-Invest with Other Types of Investors

$1.50 $1.47 $1.63

$1.44 $1.50

$1.94

$2.28

$2.57$2.38

$2.05

$1.50

$2.00

$2.50

$3.00

$M

$0.00

$0.50

$1.00

$1.50

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013

Median Round Size Mean Round Size

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Angel Groups Invest Close to Home81% of deals completed in the home state of investor group & company

71%

76%79%

72%

81%84%

87% 87%

80%

88%

70%

80%

90%

100%

#

40%

50%

60%

70%

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013

Investor & Company in Same StateInvestor & Company in Same Region

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Active Angel Groups

10

Most Active Angel Groups Q1 2013 – Total Deals

5th

Seattle, WA NY, MA, CATucson, AZ

11

Sunnyvale, CANew York, NYSt. Louis, MO

Most Active Angel Groups –Greatest Dollars Invested Per Deal over past 12 Months

NY, MA, CA Houston, TXMilwaukee, WI

12

Each of the noted groups has invested in at least 5 deals in past 12 months.

Southern CA

Nashville, TNPortland, ORMount Laurel, NJ

Regional Trends

13

Angel Group Deals Distributed NationallyShare of Angel Group Deals by Region Q1 2013

California

15.5%

Northwest

8.8%

Southwest

Great Plains

9.3%Great Lakes

12.9%Mid-Atlantic

10.8%

New England

11.3%

New York

11.3%

14

Southwest

12.9% Southeast

6.2%

10.8%13.3%

14.9%14.4%

12.9%

8.8%9.4%

8.8%

9.5%7.8%

10.8%

3.9%

9.3%

7.4% 7.2%11.3%

50%

60%

70%

80%

90%

100%

AK / HI / PR

New York

Great Plains

Mid-Atlantic

Northwest

3.9%

Q1 2013 Share of Angel Group Deals by Region

Q4 2012Q1 2012 Q1 2013

14.9% 17.8% 15.5%

16.9% 12.8%11.3%

10.8% 13.3%

6.2%

10.8%13.3%

12.9%

0%

10%

20%

30%

40%

50%

Southwest

Great Lakes

Southeast

New England

California

15

Southwest Edges out California in Share of Dollars in Q1 2013Share of Angel Group Dollars by Region Q1 2013

California

17.4%

Northwest

6.4%

Southwest

Great Plains

10.3%Great Lakes

11.6%Mid-Atlantic

6.7%

New England

13.0%

New York

7.7%

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Southwest

18.1% Southeast

8.6%

15.3%

15.2%

15.8%

18.1%

8.4%

5.8%

6.4%

13.1%11.8%

6.7%

2.3%

10.3%

7.6% 5.0% 7.7%

50%

60%

70%

80%

90%

100%

New York

Great Plains

Mid-Atlantic

Northwest

Southwest

3.7%

Q1 2013 Share of Angel Group Dollars

Q4 2012Q1 2012 Q1 2013

10.1% 14.1% 17.4%

19.2%16.0% 13.0%

7.7%13.9%

8.6%

14.8%

15.3%

11.6%

0%

10%

20%

30%

40%

50% Southwest

Great Lakes

Southeast

New England

California

17

Sector Trends

18

22.4%

13.0%

13.2% 16.6%3.4%

2.9% 6.2%

8.2%

5.2%4.1%

7.5%3.4%

4.1%6.2%1.7%

3.1%14.4% 14.9%

10.4%

50%

60%

70%

80%

90%

100%

Other

Energy & Utilities

Consumer Pdcts & Svcs

Industrial

Software (non-

Internet, Healthcare & Mobile Deals Combine for 72% of Q1 2013 Deals Q1 2013 Share of Angel Group Deals by Sector

Q4 2012Q1 2012 Q1 2013

32.2% 36.2% 36.8%

15.1%

22.4% 18.7%

0%

10%

20%

30%

40%

50%Software (non-internet/mobile)

Mobile & Telecom

Healthcare

Internet

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14.7%

14.1%12.8%

2.0%

1.4% 8.5%8.3%

6.8%7.0%4.1%

3.0%7.5%4.1%

14.2% 15.5%10.3%

50%

60%

70%

80%

90%

100%

Other

Energy & Utilities

Consumer Pdcts & Svcs

Industrial

2.1%

Q1 2013 Share of Angel Group Dollars by Sector

Q1 2012 Q4 2012 Q1 2013

32.8%25.8%

31.8%

16.5% 32.1% 22.6%

0%

10%

20%

30%

40%

50%

Software (non-internet/mobile)

Mobile & Telecom

Healthcare

Internet

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About the Halo Report™

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What is the Halo Report™?

Angel Group Investment Trends: The Angel Resource Institute, Silicon Valley Bank and

CB Insights set out to raise awareness of early stage investment activities by angel

investment groups. The Halo Report is the result. The research series highlights angel

investment activity and trends in North America and provides much sought after data that

has not been previously available to entrepreneurs or early stage investors.

The Halo Report includes aggregate analysis of investment activity by angels and angel

groups and highlights trends in round sizes, location and industry preferences. The data is

collected via survey and aggregation of public data using CB Insights innovative data

analyses.

Get Involved: Angel groups and individual angel investors interested in including their data

in the Halo Report should contact Sarah Dickey, ARI Vice-President of Research: 913-894-

4700 and sdickey@angelcapitalassociation.org.

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Understanding the Data: Special Round Types and Industry Sectors

The Halo Report™ provides analysis and trends on US angel and angel group activity.

Angels and angel groups invest alone, together, and with many other types of investors. Unless otherwise noted the Halo Report data includes all rounds that have at least one angel group participating and may include other types of investors in those rounds.

This report discusses angel group investment trends for Q1 2013, which represents a total of 207 deals and $222M in total rounds including co-investors.

A few charts report on an “Angel Round,” a special classification of investment when angel groups invest alone or just with other angels and angel groups.

Unless otherwise noted, values of less than <1% are included, but are not labeled or noted as a change in activity.

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Internet Mobile & Telecom Software Energy & Utilities Computer Hardware & Services Healthcare

Industrial Automotive & Transportation Business Products & Services Consumer Products & ServicesElectronics Environmental Services & Equipment

Financial Services Food & Beverages Leisure Media Metals & Mining Retail Risk & Security

Halo Report Industry Sectors

Angel Resource InstituteSarah Dickey, sdickey@angelcapitalassociation.orgThe Angel Resource Institute (ARI) is a charitable organization devoted to education, mentoring and research in the field of angel investing, a growing driver of our entrepreneurial economy. ARI was founded by the Ewing Marion Kauffman Foundation. The programs of ARI include educational workshops and seminars, research projects and reports, and information about angel investing for the general public. ARI is affiliated with the Angel Capital Association, the professional association of angel groups in North America. More information is available at www.angelresourceinstitute.org.

Silicon Valley Bank Carrie Walsh, cwalsh@svb.comSilicon Valley Bank is the premier bank for technology, life science, cleantech, venture capital, private equity and premium wine businesses. SVB provides industry knowledge and connections, financing, treasury management, corporate investment and international banking services to its clients worldwide through 28 U.S. offices and six

Halo Report Contacts

corporate investment and international banking services to its clients worldwide through 28 U.S. offices and six international operations. (Nasdaq: SIVB) www.svb.com.Silicon Valley Bank is the California bank subsidiary and the commercial banking operation of SVB Financial Group. Banking services are provided by Silicon Valley Bank, a member of the FDIC and the Federal Reserve System. SVB Financial Group is also a member of the Federal Reserve System.

CB InsightsAnand Sanwal, asanwal@cbinsights.comCB Insights is a National Science Foundation-backed data-as-a-service firm that collects information on private companies and their investors and acquirers. CB Insights data and technology is used by firms to make better marketing, procurement, lending, acquisition and equity investment decisions and to gather data-driven market and competitive intelligence. The firm's data is regularly cited by leading media publications including the New York Times, Forbes, BusinessWeek and Fast Company among others. For more information, visit http://www.cbinsights.com.

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Angel Resource Institute and Silicon Valley Bank co-produce the Halo Report™ with data powered by CB Insights. Angel Resource Institute and CB Insights are independent third parties and are not affiliates of Silicon Valley Bank.

This material, including without limitation to the statistical information herein, is provided for informational purposes only. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decision. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation, offer or recommendation to acquire or dispose of any investment or to engage in any other transaction.

©2012 SVB Financial Group. All rights reserved. SVB>, SVB Financial Group, and Silicon Valley Bank are registered trademarks.

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