30/07/2010

By Modwenna Rees-Mogg, founder of AngelNews

According to EBAN, the European business angel market in 2009 comprised

• 334 networks

• 75.000 angels (est.)

• 3 to 5 billion EUR invested (est.)

Evolution of the business angel market in the EU in recent years

The number of networks has grown 5 fold since 1999

The 2009 EBAN Statistics Compendium suggests business angels are going strong, even more in a time of financial and economic downturn, and that angel investors are the hidden players in the financing of high-growth, innovative start-ups.

The survey revealed that across Europe, most of the key indicators of the angel market improved in 2008 vs. 2007 and that, while close to half of respondents reported a slowdown in the latter part of 2008, most saw positive trends again in 2009.

Some of the interesting findings that were uncovered in EBAN's annual data gathering exercise uncovered the following:

• The number of business angel networks in Europe has continued to increase. They continue to operate along traditional lines, particularly operating under associate structures and not for profit entities.

• More angels joined networks than left them between 2008 and 2009

Angel activity is growing across most EU countries; network managers have also reported a growth in the quality and volume of the deal flow they received.

• The average size of the deal has gone up slightly in 2008, probably because the lack of alternative sources of funding has forced angels to provide additional funding to existing portfolio companies.

• Angels are reverting to investing in domestic investments which EBAN believes is probably due to the current economic environment and the importance ofnurturing investee companies.

• BANs increasingly collaborate with other investors, in particular early stage venture capital funds and family offices to fund businesses. EBAN believes this trend is likely to increase in coming years.

• Throughout the EU ICT and Software remain the predominant sectors of investment for business angels, although there is a growing level of activity in health related and environmental companies.

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