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Average Number of Institutional Investors in a Venture Capital Round – November 2013

by Jonathan Parker

  • 07 Nov 2013
  • PE

In the year to date, there has been a worldwide average of 2.2 institutional investors per round of venture capital funding. However, a breakdown by region reveals some disparity. North America has seen a slightly higher average of 2.5 institutional investors participating in each round, while the average venture capital financing in India and China has involved 1.6 institutional investors in 2013 so far. North America has seen the highest average number of investors per round in each year since 2008, while India consistently ranks as the region with the lowest average number of investors per round, albeit with the same number as China in 2010 and 2013.

In terms of rounds of investment, it is no surprise to see that later stages tend to have a higher number of investors than early stages. In 2013 to date, Series D and later rounds have seen an average of 4.0 institutional investors, compared to 3.5 at Series C; 2.7 at Series B; 2.3 at Series A; and 1.9 at Angel/Seed stage. Overall, from 2008 to present, Angel/Seed rounds have seen a general increase in the average number of investors, from 1.4 in 2008 to 2.0 in 2011, dropping slightly to 1.8 in 2012 before rebounding to 1.9 in 2013 to date. The average number of investors per Series A investment has also risen steadily, from 1.9 in 2008 to 2.3 in 2013. Series B deals have consistently seen 2.7 institutional investors per funding in all years except for 2012, which saw 2.8 investors per deal. Following a drop from 3.7 investors in 2008 to 3.3 in 2011, Series C deals witnessed a recovery to 3.6 investors per deal in 2012, dropping back slightly to 3.5 in 2013 to date. The number of investors involved in Series D and later rounds has been more fluctuant, peaking at an average of 4.5 institutional investors per deal in 2011 before falling to a low of 4.0 investors in 2013 so far.

Analysis of the average number of investors per round based on deal size reveals that larger deals, that tend to be those at a later stage, have more investors than low value deals. For example, in 2013 so far, there has been an average of 1.5 institutional investors per deal for those in the $0 to $0.99mn size bracket, rising to 2.3 investors for deals in the $1mn to $4.99mn range. On average, 2.4 institutional investors contributed to each deal in the $5mn to $9.99mn range, with 3.2 investors per deal valued at over $10mn.

In the period running from 2008 to present, the healthcare and semiconductors & electronics industries have seen the highest average number of investors per round of venture capital funding, with a mean of 2.7. However, both industries have seen recent declines in the average number of investors per deal, with the semiconductors & electronics industry registering an average of 1.8 institutional investors per deal in 2013 to date, down from 2.5 per deal in 2008. Similarly, the healthcare sector has seen a fall from 2.6 investors per round in 2008 to 2.1 in 2013.

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