The Declining Numbers of Angel & Seed Financings in the US – April 2015

by Emily Forbes

  • 10 Apr 2015
  • PE

According to Preqin’s Venture Deals Analyst online service, there have been 6,821 angel/seed deals in the US since 2007, worth an aggregate value of $5.5bn. These account for 17% of all venture capital deals in the US over the same time period, though only 1.5% of the aggregate value*. As can be seen in the chart below, the overall number of angel/seed deals has been in decline since 2013. In Q1 2014, the number of angel/seed deals was 14% less than in Q1 2013, while Q1 2015 witnessed an even larger decrease, down 33% from Q1 2014. However, the aggregate value of angel/seed financings does not follow this trend. The aggregate value of angel/seed deals in Q1 2015 was $394mn, the joint highest recorded deal value in the period since 2007; Q3 2013 had the same aggregate value.

California has been the most prominent state for angel/seed deal activity and aggregate value since 2007, home to 2,762 deals (40% of the total number of deals in all states), worth $2.6bn in aggregate value (nearly half of the US total). New York is the second most active state, accounting for 14% of the number of angel/seed deals and 15% of the aggregate value.

Through Q1 2015, the internet industry has had the highest number and aggregate value of angel/seed deals compared to other industries in the US, with 70 deals worth $202mn. Compared to the first quarters of the previous two years, the number of internet angel/seed deals has decreased; the figure is far less than the 108 deals recorded in Q1 2014 and even further from the 120 recorded in Q1 2013. However, the aggregate deal value for angel/seed internet deals in Q1 2015 is the highest it has been at any point in the period since 2007. In Q1 2015, the software & related industry was the second highest for angel/seed financing in terms of number and aggregate value, at 63 deals worth $73mn, followed by telecoms, which recorded 41 deals worth $55mn in the quarter.

*This figure includes add-ons, mergers, grants, venture debt and secondary stock purchases.

Continue browsing industry reports, publications, conferences, blogs and more on Preqin Insights