Exit Opportunities For Angel Investors Record A Decline In 2016: LetsVenture Early Stage Investing Report 2017

Exit Opportunities For Angel Investors Record A Decline In 2016: LetsVenture Early Stage Investing Report 2017

While angel networks and corporates too have increased deal participation in early stages, angel investors need to wait longer for exit rounds, as per the latest ‘LetsVenture Early Stage Investing Report 2017’.

The report, which was presented at LetsVenture’s flagship event LetsIgnite 2017 conference in Bengaluru last week, analysed close to 1,800 deals covering 1,450 startups that have raised $710 Mn cumulatively since 2010. Out of this chunk, NCR accounted for $200 Mn, Bengaluru for $150 Mn and Mumbai for $120 Mn.

The first highlight of the report is early stage investor base – which grew 1x in 2016 but with substantial churn.

Meanwhile, the dollar value of early investing stage deals also declined in 2016.

More so, the average early stage deal size declined by almost 10% in 2016 to $0.55 Mn. The report also noted that established angel networks have a median deal size of $440K while for emerging angel networks, the median deal size is $300K.

Another significant highlight of the report was: while the number of seed rounds are growing, the number of follow-on rounds have not been keeping pace. As per the data, of the startups formed in 2015, 377 raised seed rounds but only eight have managed to close Series A rounds.

In 2016, out of the startups formed, 36 raised seed rounds but only one managed to close a Series A round.

A similar trend was noted in Series A rounds which saw fewer new investors coming in this year (37%) as compared to the last year(50%).

Similarly, another cause of concern for angel investors was the number of exit events which too fell in 2016.

However, the data revealed that if there is a marque investor in a seed round, the chances of an exit for an angel investor increases. As per the report, 7.34% of startups that had an exit event had at least one marquee angel, while only 3.9% of startups with no marquee angel had an exit event. Also, 24% of marquee angels saw an exit event, while 16% of other angels saw an exit event. The top 100 angel investors in India count as marquee investors in the report.

The report also noted that first generation entrepreneurs now form almost 50% of the country’s prolific angel investors, followed by corporate executives at 38%, experienced angel investors at 7%, and family wealth at 5%.

What was also noted was that increasingly, angel investors are forming formal/ informal groups based on location, sector or experience.  In fact, investing is becoming more social with more unique groups co-investing together in a number of deals.

Consequently, over the last six years, 17 new angel networks with 300+ investors were formed such as IAN, Chennai Angels, Mumbai Angels, and others.

In the future, more domain/ expertise-based groups are expected to form.

Chaitanya Ramalingegowda, VP investor relations, LetsVenture surmised, “ Angel investing sentiment remained steady in 2016 with a similar number of new angel investors entering the space as in 2015. Lead angels with domain expertise and patience will end up making handsome returns.”

LV Awards

The event also saw the introduction of LetsVenture awards – a set of annual awards to recognise industry leaders, influencers and ecosystem stalwarts in the early-stage investing space based on public data, voting, and external jury.

Angel Investor of the YearRajan Anandan and Sanjay Mehta

Most Successful Angel Group – Indian Angel Network

Most Successful Angel Group (Emerging)50K Ventures

Best in Class Accelerator (Corporate)Microsoft Accelerator

Best in Class Accelerator (Independent) GSF Accelerator

Meanwhile out of the 12 startups which pitched at LetsIgnite 2017, the best pitches award went to online product rental marketplace RentSher and risk and compliance startup Xplanr Analytics.

 

You have reached your limit of free stories
Become An Inc42 Plus Member

Become a Startup Insider in 2024 with Inc42 Plus. Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in India’s startup & business economy.

2 YEAR PLAN
₹19999
₹7999
₹333/Month
Unlock 60% OFF
Cancel Anytime
1 YEAR PLAN
₹9999
₹4999
₹416/Month
Unlock 50% OFF
Cancel Anytime
Already A Member?
Discover Startups & Business Models

Unleash your potential by exploring unlimited articles, trackers, and playbooks. Identify the hottest startup deals, supercharge your innovation projects, and stay updated with expert curation.

Exit Opportunities For Angel Investors Record A Decline In 2016: LetsVenture Early Stage Investing Report 2017-Inc42 Media
How-To’s on Starting & Scaling Up

Empower yourself with comprehensive playbooks, expert analysis, and invaluable insights. Learn to validate ideas, acquire customers, secure funding, and navigate the journey to startup success.

Exit Opportunities For Angel Investors Record A Decline In 2016: LetsVenture Early Stage Investing Report 2017-Inc42 Media
Identify Trends & New Markets

Access 75+ in-depth reports on frontier industries. Gain exclusive market intelligence, understand market landscapes, and decode emerging trends to make informed decisions.

Exit Opportunities For Angel Investors Record A Decline In 2016: LetsVenture Early Stage Investing Report 2017-Inc42 Media
Track & Decode the Investment Landscape

Stay ahead with startup and funding trackers. Analyse investment strategies, profile successful investors, and keep track of upcoming funds, accelerators, and more.

Exit Opportunities For Angel Investors Record A Decline In 2016: LetsVenture Early Stage Investing Report 2017-Inc42 Media
Exit Opportunities For Angel Investors Record A Decline In 2016: LetsVenture Early Stage Investing Report 2017-Inc42 Media
You’re in Good company