Nearly 800 angel investors invested more than $41 million in 70 Michigan companies in 2017, according to a comprehensive new report prepared by Ann Arbor SPARK.
The "Michigan Angel Community," a statewide initiative managed by SPARK and supported by the Ralph C. Wilson, Jr. Foundation, recently completed its first annual research report about trends in Michigan's angel investment community. Some of the report's findings were presented at a "Michigan Celebrates Angels" event May 3 at the Lansing Center.
"The fact that we could identify nearly 800 (investors) was very encouraging, and I was happy to see that many," says SPARK senior vice president Skip Simms. "I believe there are many more that we probably didn't identify and think that number underrepresents (the number of angel investors in the state), but it kind of indicates there are plenty of opportunities."
Simms says angel investors are often private individuals who are reluctant to provide the information the report was seeking. To counter that, staff not only polled angel investors in the state but also requested investment data from companies that received angel funding in 2017.
The report found that the average investment was $55,000. Information technology companies received the most angel investments of any sector, with 30 companies receiving a total of $15.5 million. In contrast, only 19 life sciences companies received angel funding but they attracted larger investments, totaling $16.6 million.
"The life science industry in the state of Michigan requires more capital, generally speaking, than other types of startup tech companies," Simms says.
Simms says that figure of $55,000 was "well above the national average," according to the Angel Resource Institute Halo Report.
"They looked at 3,500 startup tech companies in the U.S. funded last year by angel groups, and the average nationally was much lower than that," Simms says, noting that it's not just the Ann Arbor area that has a "robust" life science startup community but that life sciences are very strong in Detroit and southwest Michigan as well.
Simms says the general consensus from the angel investors who attended the Lansing Center event was that it should be repeated.
"Nothing like this has been done before, and there was overwhelming appreciation for the event," Skimms says. "The consensus is that this is something we ought to do every year, to recognize and celebrate one of the key components to the success of any startup and to growing a business."
The full Michigan Angel Community report is available on Ann Arbor SPARK's website.
Sarah Rigg is a freelance writer and editor in Ypsilanti Township. You may reach her at firstname.lastname@example.org.
Photos courtesy of Ann Arbor SPARK.