UNH: Angel investment market contracted in 2008

Angel investments in the United States last year totaled $19.2 billion, a drop of 26.2 percent from 2007, but the number of deals was relatively unchanged, a new study by the University of New Hampshire concluded.

Last year, 55,480 entrepreneurial ventures receiving funding, compared with 57,120 in 2007, according to the 2008 Angel Market Analysis released by UNH's Center for Venture Research.

“The significant decline in total dollars, coupled with the small decrease in investments, resulted in a smaller deal size for 2008, a decline in deal size of 24 percent from 2007," Jeffrey Sohl, director of the UNH Center for Venture Research at the Whittemore School of Business and Economics, said in a statement. "In contrast to venture capital, in which money must be invested during the life of the fund and is in part based on the size of the fund, angel investing is an individual decision and angels invest from their net worth. These data indicate that while angels have not significantly decreased their investment activity, they are committing less dollars resulting from lower valuations and a cautious approach to investing.”

The niche made up of healthcare services,medical devices, and equipment accounted for the largest share of investments, with 16 percent of total angel investments in 2008, followed by software (13 percent), retail (12 percent), and biotech (11 percent)," the center said in a press release.

To learn more about the analysis, please click here.
(By Chris Reidy, Globe staff)