The Impacts of the COVID-19 Pandemic on Angel Groups

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The Angel Capital Association, the leading professional association for angel investors in North America, shared findings from the recent survey, Impacts of the COVID-19 Pandemic on Angel Groups and Portfolio Companies, at ACA 2020 – The Summit of Angel Investing last week.  The survey revealed a strong continued commitment to rebuild the economy and fuel job growth via investment of start-up companies.

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Q1 2020 hedge fund letters, conferences and more

Survey Reveals That Angel Groups Are Ready To Rebuild The Economy

Kansas City, MO (May 18, 2020) – A peak pandemic April survey of leading angel investors revealed strong continued commitment to creating jobs via investment in start-ups.  The result of “Impacts of the COVID-19 Pandemic on Angel Groups and Portfolio Companies” were announced at the Angel Capital Association’s (ACA) annual Summit, ACA 2020 - The Summit of Angel Investing.  More than 50 major angel investing groups, representing thousands of active investors and hundreds of their portfolio companies around the US, responded.  Findings included:

  • Overall angel groups (71%) plan on continuing to invest although level of investment may decline
  • Over 60% were still interested in funding a new startup company; only 32% said their interest has diminished
  • Support for additional investment in their portfolio companies was very strong at 81%
  • 86% of the portfolio companies applied for CARES Act Funding and more reaching out to their investors for guidance and support
  • 88% of portfolio companies see potential growth opportunities during the crisis

Early-Stage Financing

Early-stage financing from angel investors is critical to the success of high-growth startups. Recent estimates suggest that annual U.S. angel investment activity may total as much as $24 billion each year, contributing to the growth and success of more than 64,000 startups in every region of the country. Startups, in turn, create jobs in local economies. In fact, the US Bureau of Labor Statistics estimates that startups created in just one year led to a gain of 1.7 million jobs.

“The entire world has been turned upside down with the COVID-19 pandemic, and communities around the globe are exploring strategies for creating new jobs and boosting economic growth despite a downturn in most forecasts,” said ACA CEO Patrick Gouhin. “Angels aren’t afraid to take educated risks, and they are passionate about developing fresh entrepreneurial talent through their startup investments. Communities with strong ties between their startup ecosystems and groups of angel investors will rebound faster and more meaningfully from this crisis.”

Learn more on the ACA website: events.angelcapitalassociation.org/2020summit/ACAAngelUniversity

 

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About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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