Angel Investment is on the Rise in Michigan

Angel investment is a key driver of entrepreneurial and economic growth

The Michigan Angel Community recently released its 2018 angel activity report and the numbers are encouraging. Here were some of the key finding for 2018:

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This was the second annual report produced by the Michigan Angel Community, a statewide initiative designed to increase angel investment in Michigan and make more capital available for technology startups in the state. The Michigan Angel Community is also supporting more systematic sharing of deal-flow among all of the state’s angel groups to both provide better deal access for angels, and to help entrepreneurs raise more money, faster.

The initiative is facilitated by Ann Arbor SPARK and supported by the Ralph C. Wilson, Jr. Foundation, and other corporate sponsors throughout the state. All of the state’s angel groups and investors are part of the community.

While the results of 2018 report are trending in the right direction, Michigan still has a lot of room to grow. Angel investors are high-net-worth individuals or families with annual income of at least $200,000 (individual) or $300,000 (family) or an investable asset base of at least $1 million. Recent census data show that Michigan has approximately 98,000 households with net worth over $3 million. That means there are a lot of potential angel investors in our state.

We need more people to become angels in Michigan. Angel investment is critical to the growth of new industries, to diversifying the economy, and to producing high-wage jobs. They are typically the first source of capital that high-growth-potential startups pursue (after tapping out their own resources) to commercialize new products/technologies and go to market. Without the availability of angel capital in a region, startups either fail to grow, go out of business, or leave the region to find capital elsewhere. We have seen this play out in Michigan frequently in the past, but it’s gradually changing.

There are many benefits to becoming an angel and investing some of your capital into this asset class:

  • Potential for high financial returns

  • Portfolio diversification

  • Give back — help entrepreneurs succeed (including opportunities to share your wisdom through mentoring, advising, or serving on a board)

  • See the ‘next cool thing’

  • Make a difference — help grow the local/regional economy and create high-paying jobs

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The annual report was presented at Michigan Celebrates Angels in May at the Breslin Center in East Lansing, which brought together angels from around the state. On November 12, we will hold the second annual Michigan Angel Summit at The Henry Ford in Dearborn. More details coming soon.

Please visit our website for more information and feel free to contact us directly if you have questions or would like to meet. We look forward to helping you become an angel investor or form an angel group.

If you’re interested in learning more about angel investing, the Michigan Angel Community can help you. The Michigan Angels Community hosts a variety of events throughout the state year-round, where you can learn the basics of angel investing and connect with other investors. View Upcoming Events

Michigan Angel Community Releases Annual Report: Angels Invested $52 Million in Michigan Companies in 2018

FOR IMMEDIATE RELEASE – MAY 9, 2019 – Ann Arbor, Mich. — At its recent Michigan Celebrates Angels event, the Michigan Angel Community released its 2018 annual research report. The study aimed to capture data on meaningful metrics by surveying angel groups, individual angels, as well as angel-funded companies.

Click to download the full report.

Key findings include:

  • There were 859 angels that invested in Michigan companies in 2018.

  • Angels invested $52 million in Michigan companies.

  • Eighty-four companies received angel funding.

  • Of the companies that received angel funding, 15 were women-owned and 13 were minority-owned.

  • The companies that received angel funding employed more than 640 people.

“While the majority of companies that received angel funding were located in Ann Arbor, companies were located across the state, proving that angels are excited about the startups forming in Michigan, generally. This tells people looking to establish a new business that there’s support and resources to do it successfully here,” said Skip Simms, managing director of the Michigan Angel Community. “Angels provide the early stage capital entrepreneurs need to turn their fledgling businesses in to the companies that create the jobs and attract the investment that keep our economy growing.”

Information technology (IT) companies received the majority of angel funding in 2018, with software outperforming hardware. Life sciences companies received the second most funding, with diagnostics outperforming medical devices and other ventures. In total, 43 IT companies received funding, and 93 percent of those were in software.

Of note, life science surpasses IT in angel dollars invested, attracting $23.1 million compared to IT’s $20.6 million. Life science also surpasses IT in total investment raised in 2018, attracting $180 million compares to $38.7 million.

To view the full report, visit the Michigan Angel Community website: http://bit.ly/MichiganAngels2018

The Michigan Angel Community is an initiative to accelerate the growth of angel activity in Michigan as well as investment into Michigan companies. The Michigan Angel Community educates and expands the base of angel investors in Michigan, holds statewide events and programs, and fosters greater collaboration, affiliation, and social engagement among angels. Its research report is designed to help guide and promote the growth of the market with policymakers, potential angels, and out-of-state investors.

The Michigan Angel Community is supported by the Ralph C. Wilson Foundation.

About Ann Arbor SPARK

Ann Arbor SPARK, a non-profit organization, is advancing the region by encouraging and supporting business acceleration, attraction and retention. The organization identifies and meets the needs of business at every stage, from start-ups to large organizations. Ann Arbor SPARK collaborates with business, academic, government, and community investor partners. For more information, please call (734) 761-9317 or visit www.AnnArborUSA.org.

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