AUSTRALIA’S growing biotechnology, clean technology and web-based software industries are in line for a cash injection this year, with the nation’s average Angel investor identifying these sectors as preferences for investments in 2012.
The full results of the 2011 National Angel Survey, conducted by Bentleys for The Australian Association of Angel Investors (AAAI), will be revealed at next week’s National Angel Conference, being held 29 February to 2 March at the Melbourne Convention & Exhibition Centre.
The conference will bring together Angel investors and entrepreneurs from across Australia and the world for three days of discussion around topics like economic stimulation, co-investment and entrepreneur identification.
Bentleys associate director Tim Bridges said the results of this year’s survey showed that Angel investors have contributed millions of dollars to the creation of Australian businesses in recent times and are seeing decent returns on their investments.
“Survey participants invested $5.4 million in Angel capital in more than 90 entrepreneurial businesses in the 2011 calendar year,” said Mr Bridges.
“These same businesses attracted $57 million in total funding which equates to an Angel investment leverage ratio of approximately ten to one”.
“The Angel capital invested by survey participants last year included $1.23 million in clean technology, $470,000 in web-based software and $340,000 in biotechnology, which are also the three most popular industries for new investments in 2012.” In 2012, participants plan to allocate on average $278,571 of capital to use in Angel investment, up $40,714 on planned individual investment in 2011.
“This year, for the first time in the survey’s four year history, we were able to collate data on investment exits for the calendar year,” said Mr Bridges. “Data to hand shows 85.7 per cent of investments had positive returns, with 25 per cent returning between six and ten times the initial investment.”
AAAI CEO Ruth Drinkwater said the National Angel Survey was an important tool to track the Angel investment community. “There are around 1,000 registered AAAI members, many of whom are members of the 13 Angel investment groups in Australia, as well as many more individuals active as Angel investors” said Ms Drinkwater.
“The annual survey provides a snapshot of the Angel community’s backgrounds and behaviours, including what drives investment choices and the level of financial support and counsel to businesses.”
2011 results indicate, for example, that Angels are targeting their investments towards the early growth phases of the business cycle, with 25.5 per cent of last year’s investments made at the seed stage, 35.3 per cent at the start-up stage and 27.5 per cent at the development stage.
“In addition to financial investment, Angels contribute their time and expertise to their investments, with the average Angel spending 50 hours per month on activities like mentoring, attending pitching sessions and post investment management,” said Ms Drinkwater.
“The contribution of intellectual capital is an essential element of the Angel investment strategy and philosophy.”