ICT remains most popular sector
The IBAN survey defines the average Business Angel as an individual with an overall capital endowment lower than 2 mil euros, of which 10% is invested in early stage (for 73% of the survey respondents).
The acquired stake in companies rarely surpass the 20% threshold. The survey respondents’ portfolio counts on average 3 concurrent angel investments.
The sector receiving most benefit from the business angel’s activity of 2019 is ICT (app web, mobile and software related to e-commerce), accounting for 35% of the investments (yet a smaller share than the 46% of 2018).
ICT is followed by the advanced tertiary sector (12%) and consumer goods (11,4%). Thereafter come healthcare and the social services sector (8%).
Increase in the gap between north and south.
The survey found an increasing divergence in the amount of capital invested in the northern regions compared to the southern ones. 72% of the overall 2019 investments in Italy were in the northern regions, an increased percentage compared to the 63% of 2018.
Specifically, 36% are in Lombardy, 11% in Piedmont, 11% in Trentino Alto-Adige, followed by Lazio and Puglia. 4% of the invested companies are Italian startups established abroad.
Key investment criteria
Among the key investment criteria for Business Angels we find growth potential, management team and the exit strategy. Anselmo concludes that: “the exit strategy indeed is one of the main concerns for this sector, given the long duration of the investments and the main exit path being the sale to other investors”.
In 2019, only the 11% of the respondents declares to have had an exit during the year. The exits where on average on investments with a duration of over 9 years. The main exit strategy was a sale to other investors.
Finally, the use of crowdfunding remains low in 2019. This option is used mostly to scout for new opportunities and as a way to forge investors alliances. The invested amount is just 2% of the overall invested amounts. Per campaign, an average was invested of only €21.500.