According to IBAN (Italian Business Angels Network Association), the Italian Business Angels (BAs) invested € 91 million of capital into startups in 2021, +78% compared to 2020 (€ 51,2 million).
BAs invested in 100 companies during 2021 (96 in 2020). The strong growth in the amount invested and the virtually unchanged number of companies is a sign of recovery in the post-pandemic sector. In addition, the support received in 2021 through the incentives of the Relaunch Decree also played an important role.
The median investment ticket per BA per company was € 50k, with a confirmed greater preference for companies in the startup phase (59%) than those in the seed phase (41%).
Alongside deals concluded by BAs alone, investments continue to be made together with venture capital funds or through equity crowdfunding platforms. The total fundraising of startups and scaleups in which the BAs invested amounted to € 935 million, more than double the € 402.5 million in 2020. The average investment ticket of a BA through crowdfunding platforms was around € 9k.
Moreover, Italian BAs invested together with venture capital funds. They participated in 116 VC deals for a total invested capital of € 812 million, including VC funds (it was € 325 million in 2020).
About 95% of the deals were conducted by Italian investors, with an average number of 11 individual BAs per deal, confirming the trend for BAs to syndicate to increase the overall financial contribution, reduce individual transaction costs and the risk in case of deal failure.
72% of the deals monitored by the IBAN were syndicated. BAs group together to increase the overall financial contribution, reduce individual transaction costs and reduce the unit risk in case the deal fails. Foreign investors account for about 6%.
BAs provide capital mainly through equity subscriptions, in a single tranche in 74% of cases, and to a lesser extent through shareholder loans or bank guarantees. Capital protection terms are foreseen in more than 57% of the deals.
The most attractive sectors were ICT (app web, mobile, software) (36% of total investments in 2021), food & beverage (12%), and health care (10%).
85% of target companies were innovative startups or SMEs, and 74% of companies were located in the north of Italy. Investments abroad concern startups founded by Italians in other European countries, the US and the UK.
The typical Italian BA is a man over 50, living in northern Italy, with a high level of education and professional experience (managers and entrepreneurs), and declaring himself a full-time business angel (42% of cases).
On average, BAs have personal assets between € 1 and 2 million, of which between 10% and 15% are dedicated to angel investing, for a portfolio of about 8 companies.
In 2021, the percentage of female BAs was estimated at 14%, up from 11% in 2020. Female investors are, on average, 63 years old, graduated (78%) and have a freelance background (57%). More than 1/3 of female BAs have made at least one investment in women-founded companies.
The main factors that business angels consider when evaluating an entrepreneurial project are:
- market growth potential (38%)
- team (22%)
- industry and exit strategy (9%)
The main reasons for BAs not to invest in a project are:
- limited growth potential (20%)
- inadequate business plan (17%)
- doubts about managers’ skills (14%)
Regarding exits, only 6% of Italian BAs confirmed at least one exit in 2021, with an average holding period of 5 years. The most popular exit strategy in 2021 was the sale to other investors.
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The report (in Italian) is available at the following link: https://www.iban.it/wp-content/uploads/2022/05/2021_Survey_IBAN_ppt.pdf