According to IBAN (Italian Business Angels Network Association), the Italian Business Angels (BAs) participated, independently and together with venture capital funds, in 192 transactions in Italian startups and foreign startups with Italian founders, totalling more than € 678 million capital (-58% compared to 2022).
Compared to 2022, the capital invested by BAs independently also dropped. BAs invested € 39 million of capital into 75 deals in 2023, compared to € 82 million in 72 deals in 2022. Nearly 1 in 3 investments made independently by business angels was over € 500 thousand, while the capital invested in almost half of all deals was over € 200 thousand.
Almost all deals monitored by the IBAN Survey were syndicated (€ 639 million distributed over 117 deals, with an average of 11 business angels per deal), confirming that the trend observed in previous years is a structural feature of the “business model” typically adopted by Italian BAs.
96% of the surveyed BAs declare they do not intend to decrease their share of assets dedicated to investing in startups.
The criteria that, on average, have been highlighted as critical success factors in evaluating target companies are: market growth potential, management team, and exit strategy. Doubts about managers’ skills, inadequate business plans, limited growth potential, and lack of information remain the main causes of BAs’ non-investment.
Startups remain the preferred targets of investors for their deals compared to seed investments (61% for startups and 39% for companies in the seed stage.)
The sector of most significant interest for BAs is confirmed to be ICT, although other sectors are gaining investor preference, such as healthcare. 28% of BAs’ investments in 2023 were concerned with the ICT sector (52% of digital consumer services, 48% of enterprise technologies). The Healthcare sector follows ICT at 16%, with an almost doubled percentage from 2022 (9%). Thirdly is the Consumer Goods sector (8%).
The IBAN Survey explored the importance of ESG and/or impact investing factors in investment decisions. 60% of surveyed BAs apply ESG and/or impact investing criteria when evaluating investment opportunities. In addition, 23% of the sample says that they constantly deepen the level of attention and interest of the founder team to ESG factors, and 47% of respondents say they have carried out in-depth ESG due diligence.
Divestment continues to be a rare phenomenon among BAs. In 2023, only 6% of the sample declared having made at least one divestment (10% in 2022, 6% in 2021), occurring on average 5 years after the initial investment.
The typical profile of BAs is that of a man who lives in Northern Italy (75%), generally has a background as an executive (36%), and currently works as a Business Angel (64%). Only 22% are female BAs, Almost all have a master’s degree, and 28% have post-graduate degrees. The average BA has assets between € 500 thousand and € 2 million, of which less than 10% are dedicated to angel investing, for a portfolio of approximately 6 companies (9 in 2022).
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The report (in Italian) is available at the following link: https://www.iban.it/wp-content/uploads/2024/05/Survey-IBAN-2023_v05.pdf