As Angel Investors Pull Back, Valuations Take a Hit

Agreeing the valuations is often a spicy discussion. In this Wall Street Journal article some of our US-based colleagues – Bill Payne, Rob Wiltbank and Allan May – set out their views on data showing valuations are taking a bit of a hit.

A dose of reality may be hitting angel investing.

After valuations for young companies seeking funding soared to five-year highs last year, some angel investors—or wealthy individuals who buy stakes in startups—are starting to pull back.

On AngelList, a crowdfunding site aimed at such investors, the average valuation for a company receiving funding reached $4.9 million for two quarters last year, its highest level in five years. But valuations dropped to $4.2 million in the fourth quarter, the lowest level since early 2012. Dow Jones VentureSource data shows that deals involving angel investors fell by 16% last year.

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