1 in 2 Angel Investors Will Increase Their Investments in 2014

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New "Angel Investment in America" Report from Worthworm Finds that Investors Plan to Invest More in Healthcare, Mobile, Internet and Energy/Utilities Start-ups


Worthworm, the most rigorous, web-based valuation tool for young companies, today announces the results of its inaugural "Angel Investment in America" research report.

With the National Federation of Independent Business recently reporting a rise in small business optimism, Worthworm found that this sentiment is no different among angel investors, with 1 in 2 angel investors noting that they plan to increase the number of investments they make in 2014. An additional 24 percent of investors polled plan to not only increase the number of investments they make, but raise the total dollar value as well – signaling good news for entrepreneurs as angel investors continue to stimulate the start-up economy.

A driving factor in their ongoing commitment to investing? The rebounding economy. Fifty-five percent of angels polled said that the economy returning to its previous levels was a significant reason why they planned to continue investing in 2014.

Further, the study found that angel investors believe that the top industries for investment for the remainder of 2013 include healthcare (41 percent), mobile/telecom (34 percent), internet (31 percent) and energy and utilities (29 percent.) Unsurprisingly, angels plan to turn their backs on several industries perceived to be challenged, with the retail industry (5 percent) and industrial industry (7 percent) gaining little support.

"The resounding finding of our report is that angel investment is alive and well in America," said Alan Lobock, co-founder of Worthworm. "What we’re seeing is a trend toward making not only more, but larger investments as we move into 2014. This means entrepreneurs have a better shot at funding their ventures and in growing their start-ups. As studies have shown that the most job creation comes from young companies – rather than small or large companies – this domino effect should bring both the next wave of innovation as well as additional job creation."

Additional key findings of the report include:

  •     Angels Pick Mobile Payments over Bring Your Own Device (BYOD) Technologies: As the mobile development boom continues, angels are predicting which specific mobile segments will boom in 2014. In the report, 24 percent of angels put their money on mobile payments, followed by mobile social networking technologies (20 percent) and mobile healthcare (16 percent). Though the BYOD movement has gained much attention as employees demand to bring their devices to work, just 5 percent of angels polled felt the sector was currently worth investment.
  •     Healthcare was the Biggest Missed Opportunity for Investment in 2012: With the implementation of the Affordable Care Act (ACA), it’s no surprise that angels felt that Healthcare was a missed opportunity for investment in 2012, followed by the burgeoning energy and utilities industry.
  •     Look to the Northeast for Angel Investment: While Silicon Valley has been long-known for its commitment to investment, entrepreneurism and innovation, the study found that angels in the Northeast plan to make the most investments (48 percent) versus the West Coast (39 percent).
  •     40 Percent of Angels Make Just One Investment per Year: Though 40 percent of angels polled averaged about one investment per quarter, another 42 percent of angels said they make just one investment per year.

"There is more national attention on start-ups than ever before, with TV shows like ‘Shark Tank’ drawing attention to the role angel investors play in funding successful ventures," said Lobock. "With that attention, comes more competition for investment. With many of the investors polled in our report stating they make just one large investment per quarter, it’s critical that entrepreneurs take the time to create a realistic pitch with a credible and defensible pre-money valuation. The old adage certainly rings true – there’s just one chance for a first impression, and entrepreneurs need to take every opportunity to make sure they’re armed and ready with the data investors will be looking for."

About the "Angel Investment in America" Report (Methodology)

Worthworm commissioned research firm OnePoll to poll the views of a representative sample of 100 U.S. Angel Investors. Fieldwork was undertaken July 11-27, 2013. The research was carried out online. OnePoll is a member of ESOMAR, the world association for market, social and opinion research.

About Worthworm

Worthworm is the most rigorous, web-based valuation tool for young companies seeking investment. The web-based tool incorporates widely accepted valuation methods, valuation comparable and proprietary technologies to provide entrepreneurs with a credible, defensible pre-money valuation with which to enter into negotiations with prospective investors. For angel investors, Worthworm’s questionnaire standardizes a portion of the due diligence process, whether used as a screening tool or for future analysis. After investment, Worthworm becomes a strategic management tool helping entrepreneurs and angels evaluate opportunities, risks, and strategies amid the changing circumstances of the venture. For more information, please visit http://www.worthworm.com.

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Kate Ryan
Diffusion PR
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