Michigan Angel Activity 2020 Annual Research Report (Michigan Angel Fund)

Summary

• In 2020, total angel investment in Michigan reached $49.5 million across 102 companies, with $250 million total dollars raised.p.4
• A total of 1,053 individual angels invested in Michigan companies in 2020, with a median investment of $30 thousand per angel.p.4
• Ann Arbor Area led regional activity with 42 deals and $14.5 million in angel investment, followed by Detroit Area with 31 deals.p.5
• Information Technology led all sectors by deal volume with 45 companies and $26.4 million in angel dollars invested.p.6
• Life Sciences led all sectors in total dollars invested (angel + VC) with $167.2 million.p.7
• Debt structures total accounted for 61% of deals, including 51% in convertible notes and 10% in SAFE notes.p.7
• Overall Michigan angel investment declined 33% from $73.7 million in 2019 to $49.5 million in 2020 following a three-year rise.p.14

Key insights

1. Angel activity dipped in 2020 following the onset of COVID-19, but investment resumed by May and Q4 M&A activity increased significantly.p.5
2. Investee companies supported a total of 978 high-paying jobs in 2020, averaging 10 jobs per early-stage company.p.7
3. Average seed round pre-money valuation was $6.6 million, while median seed round pre-money valuation was $8 million.p.7
4. Two new Michigan angel groups formed in 2020: Ark Angels and Commune Angels.p.13
5. The median check size per angel declined from $50 thousand in 2019 to $30 thousand in 2020.p.15
6. Diversity in angel-backed startups continued to rise, with women-owned companies making up 22% and minority-owned companies making up 25% of funded businesses in 2020.p.15