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Angel investors invested $46.3M into 79 Michigan-based startups in 2022, down 29% from 2021, per a new report by Michigan Angel Community. The total amount invested by angel investors throughout the year was the lowest annual figure across the past five years. The decline in funding was in line with the global VC funding slump due to rising inflation and market uncertainty. Now that inflation has shown signs of easing, interest rates have peaked, and the threat of bank failures has passed, angel investments in the state will likely start rising as the year progresses. Michigan Angel Community's managing member Mike Flanagan shares the same view as he remains "optimistic" about angel investments in the state. Flanagan, also the managing director of Michigan Angel Fund, has already seen an increased deal flow in the first quarter of 2023, further substantiating his predictions. He adds, "What we're finding is there's a good number of angels investing, and I think as the macro environment improves, we'll see improvement and angel investing bouncing back. We had some macro headwinds last year, and it seems like some of that is starting to taper and not be as pronounced as we were worried about maybe a couple of months ago." While angel funding declined overall in the state in 2022, investments remained strong across several counties in the southwestern Lower Peninsula, including Grand Rapids and Kalamazoo. Sixteen technology startups in the region nabbed $18.2M in funding, up from 2021's $16.4M invested across 17 deals. In 2022, information technology startups raked in $17M from angel investors through 31 deals. While the honors for the highest deal count went to information technology startups, life sciences startups were able to secure the highest funding at $23M from just 24 deals. Nine mobility startups nabbed $3M, whereas advanced materials and manufacturing and consumer products startups nabbed $2M each. Investments in startups led by founders from diverse backgrounds continued to increase over the last five years. In 2022, 35 women-owned startups secured angel investments, up from 20 in 2021 and 14 in 2017. Thirty-three minority-owned businesses secured funding from angel investors last year. While the count was down slightly from 37 such deals in 2021, the figure was still five times more than six deals in minority-owned businesses in 2017. Flanagan added, "At the end of the day, investors are just wanting to invest in the best companies that are there, and so it seems the cream rising to the top happen to be women- and minority-owned businesses over the last few years." Michigan Capital Network had 16 angel groups last year, with a combined 686 active angel investors in their network. Overall 933 angel investors invested in Michigan-based startups last year. |
