Investment in Progress
It provides know-how, an international network and investment opportunities for about 200 members.
Since the investment in startups is on the rise in Austria, we want to highlight how this form of investment looks like and how the industry grows. Last year we asked our members to fill out a survey to gain even more information about their diverse investments, their investment habits and socio-demographic factors like age and gender. Thereby we got an overview of the current state and important developments in the Austrian angel investors scene. The data is vital for us to offer the best services and represent the industry appropriately.
But now, enough of the talking, let’s dig right into the results…
Tataaa (#trumpetsplaying) presenting the Austrian business angel investor
The average Austrian angel investor is 47 years old, has been or is in a CEO level position and is male. He started to invest after 2010 and prefers acting as co-investor. The average business angel holds 7 investments with a sum of 120.000 EUR per startup. The total sum of his investments is 970.000 EUR.
The most important source of investment is the private and professional network – around 80% of the deals are started here. The professional experience is also important when deciding in which startups to invest. Nearly half of the investors solely engage in industries they know well. These industries are widely spread, but the most important ones are IT/Software (40% of the angel investors have expertise in that field), Fintech (35%), Media (27%), E-commerce (32%) and Energy (29%). Here an overview, with what kinds of support, angel investors contribute to the development of their startups:
When looking at the geographical preferences for investing, most angel investors (60%) prefer Austria, or the DACH region. Nevertheless, about 40% also feel comfortable investing internationally. To facilitate the screening of other markets and the networking with foreign investors, the aaia has organized the first international Investors Day this year for the first time. Additionally, we increase our network especially in the CEE region, provide many touch points and connect our members all across Europe. We are very proud to be part of the European Business Angel Network (EBAN) and intensify this connection continuously.
The average business angel holds 7 active investments with an average investment of 120.000 Euro per startup. Having a closer look at the exact figures this sums up to an average 970.00 Euro total investment sum.
An important factor for our business angels when considering an investment is the business phase of the respective startup. 70% like to engage after the startup has acquired its first customers and has a first turnover. The prototype phase is the second most attractive phase for our investors. The least attractive is the scaling phase with only 15% of angel investors eager to jump in during that period.
Other facts about time: Nearly half of the angels spend 1-10 hours a week with the startups they invested in. 7% are heavily engaged and spend more than 60 hours working with them. This could also lead to further growth in the industry, as private persons are able to invest as a part time job.
Most angel investors have a minority of their portfolio disposed to lead investments. About half of the community has only up to 25% of lead investments in its portfolio. Another quarter has a lead investment share of 25-50%. This high percentage of co-investments could also be connected to the relatively young angel investors scene in Austria.
On the other hand, angel investors are not as contained when it comes to the perceived prospect of success: more than half of community believes that their portfolio consists of an equal distribution of low, average and high success prospects. 11% even say that more than half of their portfolio are high flyers.
The role of the aaia
Providing the professional network with education and events for our members pays off. One third of our members indicate that a good percentage of their investments was acquired via the aaia. Data shows, that our investors evaluate many deals that we publicize via our network, and especially benefit from startups presented at the co-investor pitches. The main motivation to join the aaia are knowledge transfer, the high-quality network with potential co-investors and the access to experts.
Since most of our members only started investing recently, we want to further develop our know-how transfer. We also emphasise (increasingly international) networking, to further grow a network of trust between like-minded people. To gain further insights in the decision-making mechanisms behind angel investment, we currently commissioned and coach a master thesis with the University of Graz and Dealmatrix.
We hope to have given you some valuable insights into the Austrian angel investor scene. Give feedback and get involved!