The third-quarter Business Angels Panel clearly shows that the initial shock of the coronavirus crisis had been absorbed. Venture capitalists rated their business situation better than in the first half of the year, scoring 4.43 out of a maximum of 7 points. And with regard to the business outlook, an upward trend is evident, currently at 4.84 points. At the same time, there is still plenty of room for improvement.
Capital injections in times of crisis
Business angels also showed willingness to support "their" startups during the crisis with a capital injection. On average, each angel donated just under €44,000, but the individual amounts varied from €7,500 to €700,000. During the peak of the crisis, the average amount was higher—after all, many startups experienced acute liquidity bottlenecks (see graphic 'Average investment per business angel').
The result is also surprising in terms of the number of exits. Investors sold their shares nine times, and only three times due to company closures. The remaining six cases are divided into three buybacks by the founding teams, two sales to other financial investors (so-called 'secondary purchases'), and one sale to a strategic investor.
Business Angels Panel prefers to give capital for software
Software companies tend to have better prospects for angel financing. Environmental technology, medtech, web service solutions, and innovative automation processes for industry follow closely. According to the panel participants, there is still sufficient capital available for new deals. On average, around 60% of the funds earmarked for venture capital have been invested so far. This is good news for potential founders. According to the panel participants, they were very active in the last quarter. The 48 business angels in the panel received an average of 30 investment inquiries. This is significantly higher than the average of the past 18 years (19.4 inquiries).
The Business Angels Panel is an initiative of VDI Nachrichten, the Business Angels Network Germany, the University of Duisburg-Essen, and RWTH Aachen. Venture capitalists from German-speaking countries report quarterly on their involvement.
