Angel Groups Are Evolving into Bigger Players

6 May

By Michael Quigley, Research Manager, LSN

mike-2As we enter the so-called “golden age” of life sciences, there is no shortage of funding opportunities for savvy investors. This has not been lost on angel groups.

There has been a significant rise in the number of angel groups targeting early stage life science companies. In the past year, approximately 25% of all angel dollars invested has been in the healthcare sector. Angel groups are making not only more investments but also larger ones, and their focus is longer term.

Syndication has allowed angels to take more substantial positions and to take advantage of the many opportunities available since the contraction in the VC sector. Also, the rise of capital-efficient life science startups, which outsource development, has allowed angels to place more bets and be longer-term players. Granted, angels like all investors prefer a low-risk investment with a fast turnaround, but the changing landscape in the life science arena is enticing them to increase their holding periods in order to achieve that profitable exit.

At LSN we actively track over 150 angel groups, one-third of which are looking to make investments of $1 million or more prior to any syndication. That’s a much higher investment than the $100,000 to $200,000 angels are often identified with. Moreover, many of these groups are becoming increasingly sophisticated in terms of their investment mandates and industry focus. As syndication continues to become more prevalent, angel investors could become important players in the course of a company’s fundraising cycle.


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