Angel Group Update: Q3 2012

What is the Halo Report™?

Angel Group Investment Trends: The Angel Resource Institute, Silicon Valley

Bank and CB Insights set out to raise awareness of early stage investment

activities by angel investment groups. The Halo Report is the result. The

research series highlights angel investment activity and trends in North America

and provides much sought after data that has not been previously available to

entrepreneurs or early stage investors.

The Halo Report includes aggregate analysis of investment activity by angels and

angel groups and highlights trends in round sizes, location and industry

preferences. The data is collected via survey and aggregation of public data using

CB Insights innovative data analyses.

Get Involved: Angel groups and individual angel investors interested in including

their data in the Halo Report should contact Sarah Dickey, ARI Research Director:

913-894-4700 and sdickey@angelcapitalassociation.org.

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Angel Group Update: Q3 2012 Highlights

Early Stage Valuations Remain Stable p.5 The median pre-money valuation for early stage angel group deals is $2.6M, slightly down from $2.7M in Q2, for a rolling 12 month period. Most Active Angel Groups p.14 •Launchpad •Central Texas Angel Network •Investor’s Circle •Golden Seeds •Tech Coast Angels •Sand Hill Angels

Median Angel Round Size Hits Five Quarter High p.4

In Q3 2012, the median size of angel & angel group syndicate rounds reaches $640K, the highest in the five quarters the data has been tracked. Mobile Sees Jump p.12-13 Investment in mobile companies increases in both deals and dollars; share of deals reaches five quarter high. Syndications Decline in Q3 p.7

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New 10% of Angel Group Deals are structured as convertible debt,

2012 YTD

Median Angel Round Size* Reaches Five Quarter High at $640K

Q3 2012

$0.54 $0.50 $0.55 $0.53

$0.64

$0.87

$1.21

$0.96 $0.90

$1.22

$0.00

$0.50

$1.00

$1.50

Q3 2011 Q4 2011 Q1 2012 Q22012 Q3 2012

Median Round Size Mean Round Size

4

$M

*Angel rounds include angels & angel groups only

Median Early Stage Pre-Money Valuations Remain Stable

$2.6M for the rolling year ending Q3 2012, slightly down from $2.7M in Q2 2012

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*Including all rounds with angel groups before Series A

Median

$2.6M $1.6M

$4.0M

1st Quartile

3rd Quartile

$.51M

$6.6M

$1.68 $1.51 $1.50 $1.50 $1.59

$3.45 $3.18

$3.16 $3.27

$3.43

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

Q2 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012

Median Round Size Mean Round Size

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$M

Median Round Size is $1.59M when Angel Groups Co-Invest with

Other Types of Investors

Angels with Other Investors

70.4% 64.3% 74.2% 68.9%

49.0%

29.6% 35.7% 25.8% 31.1%

51.0%

0%

20%

40%

60%

80%

100%

Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012

Not Co-Invested Angel Group Co-Investment

7

%

Share of Co-Invested Deals Declined for Angel Groups in Q3 2012

Southeast Rivals California for Share of Angel Group Deals

in Q3 2012

California

21.4%

ALASKA

HAWAII

Southwest

13.0% Southeast

19.5%

Great Plains

5.2% Great Lakes

9.7%

New England

14.3% Northwest

8.3%

Mid-Atlantic

9.1%

8

New York

6.5%

%

Angel Group Quarterly Deal Trends:

Southeast has an active Q3 2012

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26.4% 16.3% 13.5% 17.2% 21.4%

19.8%

11.5% 17.1% 11.0%

14.3%

8.5%

15.4% 13.5% 12.3%

19.5%

15.1%

16.3% 12.6% 17.2%

9.7%

13.2%

10.6% 13.5% 12.9%

13.0%

5.7%

11.5% 8.1% 10.4%

7.8%

4.7% 8.7%

9.0% 9.2% 2.6%

2.9% 4.5%

6.1% 5.2%

4.7% 6.7% 7.2% 3.1% 6.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012

New York

Great Plains

Mid-Atlantic

Northwest

Southwest

Great Lakes

Southeast

New England

California

1.9%

Angel Group Dollars are Invested Nationwide

Half Remains in California and New England Q3 2012

California

28.0%

ALASKA

HAWAII

Southwest

5.6% Southeast

16.2%

Great Plains

2.0% Great Lakes

5.5%

New England

21.3% Northwest

5.0%

Mid-Atlantic

8.3%

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New York

8.1%

$M

California & New England Receive Half of Round Dollars

in Q3 2012

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38.6% 30.7%

18.2%

35.7% 28.0%

11.7%

10.8%

19.9%

6.9% 21.3%

16.7%

13.8%

6.6% 6.2%

16.2%

15.1%

11.7%

12.0%

18.2%

5.5%

6.7%

10.0%

11.4%

13.6% 5.6%

2.7%

3.0%

6.9%

5.2% 5.0%

1.6%

10.1% 13.0%

8.2% 8.3%

1.2% 6.2% 4.5%

2.0%

5.5% 8.6% 5.8% 1.4% 8.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012

New York

Great Plains

Mid-Atlantic

Northwest

Southwest

Great Lakes

Southeast

New England

California

Internet Sector Still Dominates Angel Group Deals;

Mobile Deals Reach Five Quarter High

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31.1% 28.8% 34.2%

28.8% 31.2%

22.6% 22.1% 15.3% 23.9% 20.1%

11.3% 11.5% 12.6%

11.7% 14.9%

0.9% 6.7% 9.0% 5.5% 5.8% 1.9% 1.9% 4.5% 3.7%

4.5% 4.7%

10.6% 8.1%

6.1% 3.9% 4.7%

2.9% 5.4%

0.6% 2.6%

22.6% 15.4%

10.8% 19.6% 16.9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012

Other

Energy & Utilities

Industrial

Electronics

Consumer Pdcts &Svcs

Mobile & Telecom

Healthcare

Internet

%

Healthcare is Back with Largest Share Dollars (Barely); Mobile

Share Jumps Q3 2012

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22.1% 28.4% 24.9%

36.6%

23.4%

26.6%

31.6%

24.7%

26.5%

23.6%

6.6%

6.6% 17.1%

10.5%

16.5% 0.7%

5.4% 3.2%

6.0%

5.4%

5.5%

5.5%

7.3%

2.1%

10.0% 14.1%

4.8%

2.0%

19.4%

9.3% 4.3%

3.7%

22.0%

8.4% 6.3% 10.2% 18.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012

Other

Energy & Utilities

Industrial

Electronics

Consumer Pdcts &Svcs

Mobile & Telecom

Healthcare

Internet

$M

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Southern CA

Austin, TX

Sunnyvale, CA

National Group Boston, MA

Most Active Angel Groups: Total Deals in Q3 2012

CA, MA, NY

Boston, MA Sunnyvale, CA

15

Atlanta, GA

New York, NY Seattle, WA

Most Active Angel Groups: Mobile / Telecom deals for rolling year ending in

Q3 2012

Huntsville, AL

Menlo Park, CA

Understanding the Data:

Special Round Types and Industry Sectors

The Halo Report™ provides analysis and trends on US angel and angel group activity.

Angels and angel groups invest alone, together, and with many other types of investors. Unless otherwise noted the Halo Report data includes all rounds that have at least one angel group participating and may include other types of investors in those rounds.

This report discusses angel group investment trends year-to-date for 2012. This represents 541 deals and $804.4M in total rounds including co-investors.

A few slides report on an “Angel Round,” a special classification of investment for when angel groups invest alone or just with other angels and angel groups.

Unless otherwise noted, values of less than <1% are included, but are not labeled or noted as a change in activity.

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Internet

Mobile & Telecom

Software

Energy & Utilities

Computer Hardware & Services

Healthcare

Industrial

Automotive & Transportation

Business Products & Services

Consumer Products & Services

Electronics

Environmental Services &

Equipment

Financial Services

Food & Beverages

Leisure

Media

Metals & Mining

Retail

Risk & Security

Halo Report Industry Sectors

Angel Resource Institute

Sarah Dickey, sdickey@angelcapitalassociation.org

The Angel Resource Institute (ARI) is a charitable organization devoted to education, mentoring and research in the field of angel

investing, a growing driver of our entrepreneurial economy. ARI was founded by the Ewing Marion Kauffman Foundation. The

programs of ARI include educational workshops and seminars, research projects and reports, and information about angel investing

for the general public. ARI is affiliated with the Angel Capital Association, the professional association of angel groups in North

America. More information is available at www.angelresourceinstitute.org.

Silicon Valley Bank / SVB Accelerator

Carrie Walsh, cwalsh@svb.com

Silicon Valley Bank is the premier bank for technology, life science, cleantech, venture capital, private equity and premium wine

businesses. SVB provides industry knowledge and connections, financing, treasury management, corporate investment and

international banking services to its clients worldwide through 27 U.S. offices and six international operations. (Nasdaq: SIVB)

www.svb.com.

Silicon Valley Bank is the California bank subsidiary and the commercial banking operation of SVB Financial Group. Banking services

are provided by Silicon Valley Bank, a member of the FDIC and the Federal Reserve System. SVB Financial Group is also a member

of the Federal Reserve System.

CB Insights

Anand Sanwal, asanwal@cbinsights.com

CB Insights is a National Science Foundation-backed data-as-a-service firm that collects information on private companies and their

investors and acquirers. CB Insights data and technology is used by firms to make better marketing, procurement, lending, acquisition

and equity investment decisions and to gather data-driven market and competitive intelligence. The firm's data is regularly cited by

leading media publications including the New York Times, Forbes, BusinessWeek and Fast Company among others. For more

information, visit http://www.cbinsights.com.

Halo Report Contacts

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©2012 SVB Financial Group. All rights reserved. SVB>, SVB>Find a way, SVB Financial Group, and Silicon Valley

Bank are registered trademarks.

Angel Resource Institute and CB Insights are independent third parties and are not affiliated with SVB Financial

Group.

This material, including without limitation to the statistical information herein, is provided for informational purposes

only. The material is based in part on information from third-party sources that we believe to be reliable, but which

have not been independently verified by us and for this reason we do not represent that the information is accurate

or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on

in making an investment or other decision. You should obtain relevant and specific professional advice before

making any investment decision. Nothing relating to the material should be construed as a solicitation, offer or

recommendation to acquire or dispose of any investment or to engage in any other transaction.

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