Why 2021 Will Be the Best Year Yet for Angel InvestorsBy all measures, 2020 was an incredible year for the private equity world. Not only did we see massive amounts of money pour into startup companies… we also saw a slew of these companies make long-awaited debuts on the public market.
In fact, CB Insights recorded 223 private financing rounds worth over $100 million each this year alone. During just the third quarter, startups raised a total of $36.5 billion (up 30% from Q3 2019), and 81 different IPOs raised a total of $28.5 billion.
Some of the year’s biggest public debuts included Palantir, which went public via a direct listing, and Snowflake, which was the largest software company to ever IPO in the United States.
And of course, we can’t forget about the rise of SPACs (special purpose acquisition companies), a newly popularized way for startups to go public without the hassle of a traditional IPO.
This momentum will likely continue well into 2021 and beyond, which is why today is the best time to back the early-stage companies that could very well be tomorrow’s smash-hit IPOs.
And there will certainly be plenty of opportunities to do so, especially over the coming months. Here’s why…
Tech Adoption Has Accelerated like Never BeforeCOVID-19 quickly brought the entire world and its economies to a standstill. But that chaos, while destructive, created a ripe atmosphere for innovation.
In fact, new business applications reached record levels this year. A total of 1.5 million applications were submitted in Q3 2020 alone, marking around a 78% increase compared to Q2.
As the coronavirus forced the entire world to go digital, practically overnight, many companies took the initiative to generate disruptive tech that we may not have seen for the next five to 10 years otherwise.
This massive paradigm shift is here to stay.
Even when the pandemic is no longer a factor, Visual Capitalist reports that 98% of employees would prefer to continue working remotely (at least part-time) for the rest of their careers. Around 82% of company leaders say they’ll allow it.
In other words, companies that rushed to adopt teleworking tech aren’t just going to go back to the stone age once this is over.
We expect these trends to continue well into the new year and beyond.
Meanwhile, recent regulatory changes in the U.S. government will make it even easier to play all of the opportunities coming your way.
Let’s talk about them…
Breaking Down the SEC’s Regulatory ChangesEarlier this year, the SEC announced regulatory changes that could drastically increase the number of world-class investment opportunities available to you.
Starting on January 1, 2021, startups raising capital via Reg. CF will see their maximum raise amount jump from $1.07 million to $5 million. This higher limit could attract bigger, better, and more established companies to this type of raise – opening the doors for nonaccredited investors to participate.
On top of that, the SEC also amended their definition of an accredited investor. They’ve expanded it to include those with certain professional knowledge, experience, certifications, or credentials from an accredited institution. In other words, if you can prove you know your stuff… you could very well qualify as an accredited investor.
We’ve broken all of these regulation changes down in a previous report.
We’re Making History TogetherThis is a historic moment for startups and their investors… and we’re so glad that you’re part of this story with us.
Over the coming months, keep an eye out for the companies thriving in and adapting to the “new normal” that is the digital era. There are plenty of them out there, and we’ll always be the first to tell you all about the best opportunities in this space. +
The Private Equity Landscape10X Capital Venture Acquisition Corp. (Nasdaq: VCVCU), the SPAC run by our own David Weisburd and his team, made its public debut on November 24 at a valuation of $175 million. It’s a “blank check” company that funds high-growth tech businesses disrupting the market.
Salesforce (NYSE: CRM), the world’s leading customer relationship management platform, announced its plans to acquire Slack on December 1 for $27.7 billion. The channel-based messaging platform will provide Salesforce with the tools to rival their competitors, Microsoft 365 and Google Workspace.
Twilio (NYSE: TWLO), the communications development platform, acquired customer data platform Segment for $3.2 billion on November 2. This new partnership will allow Twilio’s developers to unify customer data at every touchpoint, giving them a better understanding of overall customer behavior.
Roblox (NYSE: RBLX), the popular video game taking kids’ entertainment by storm during the pandemic, filed to go public on November 19. Recently, it saw a 91% increase in revenue to $242.2 million for Q3 from the year prior and is currently worth $37 billion.
Olema Pharmaceuticals Inc. (Nasdaq: OLMA), a biopharmaceutical company, officially entered the stock market on November 18. Specializing in therapies for women’s cancers, this company hopes to develop an oral treatment to block the largest determiner of breast cancer, the estrogen receptor. The company sold 11 million shares for $19 each, for a total of $209 million.
Facebook (Nasdaq: FB) announced its acquisition of customer experience platform Kustomer for $1 million. Since November 30, Facebook has been using Kustomer’s approach to unify customer activity across social media channels and create more detailed customer profiles.
Airbnb (Nasdaq: ABNB), the well-known vacation rental marketplace, made its long-awaited public debut on December 10, trading shares at $68 each. Despite the travel setbacks of COVID, which decreased its revenue by 19%, Airbnb still managed to bag $219 million in profits year to date. The company is currently valuated at $47 billion.
Utz (NYSE: UTZ), the popular chip brand, has officially announced its plans to acquire On The Border brand Truco Enterprises for $480 million this December. This acquisition will allow Utz to distribute its brand into new markets so consumers can access its products more easily. Following the announcement, shares of UTZ jumped more than 3%.
DoorDash (NYSE: DASH), the world’s largest food delivery service, joined the New York Stock Exchange on December 9, raising $3.4 billion. On the day of its debut, DoorDash’s stock price rose by 85% and the now-public company is worth nearly $40 billion, exceeding analyst expectations by more than 25%.
Meet Abe Wagner
Your Newest Angel Investing AdvisorDear Reader,
I’m Abe Wagner – so great to finally meet you.
I’ll keep my introduction short… I’m a serial founder and former MMA fighter who’s now a financial mindset and entrepreneur coach (I’ll be sharing more about me in the coming weeks).
I’m also a proud member of the Angels & Entrepreneurs Advisory Board.
My mission in life is to help teach people to fundamentally shift their mindset when it comes to money. Because here’s the thing… 1,600 Americans become millionaires every single day. And I’m not saying they aren’t smart or hardworking (well, some of them), but the fact of the matter is, they’re not special. They don’t have some kind of magical quality that makes them “deserve” it more than you or I do. (Newsflash: Nobody “deserves” anything. It’s all about the results you get, not the effort you put in.)
At this point, I’ve spent roughly equal parts of my life being poor and having money. And on my way up, I realized that wealthy people aren’t any better or more clever than everyone else – they just have a different way of thinking about money, a way that the system fails to teach you until you have it.
Changing your relationship with money can put you on the fast track to financial success and generational wealth. It can mean the difference between living paycheck to paycheck and having the power to future-proof your life.
The right mindset won’t just help you get rich… it’ll give you confidence, teach you to make more money while working fewer hours, and help take so much stress out of your life.
In the coming months, you’ll be hearing from me a lot more often as I share my hard-won secrets with you. My only hope is that I can help you change your own relationship with money… and welcome you to the ranks of the 1,600 a day that call themselves millionaires.
I’m really looking forward to it.
Ask NeilQ: What should I do if a founder I backed is being uncommunicative?
First off, keep in mind that startup founders are the most outrageously busy people on earth. Many of them work 80 to 100 hours a week and are juggling every aspect of running a business, from budgeting to manufacturing to marketing and more. It’s a tough pill to swallow, but the fact is, answering an email from someone who invested a few hundred bucks isn’t likely to top their priority list.
That being said, there are a few ways to get in touch with founders you haven’t heard from in a while. Many startups that raise via crowdfunding have an investor relations email address – see if you can find that and get in touch. You may also be able to get an email address by asking the crowdfunding platforms themselves. Lastly, try messaging the startup’s social media accounts – they’re often checked several times a day and might be the quickest way to a response.
Just remember, these founders want to grow their businesses and make money as much as you do, if not more. If you’ve exhausted all reasonable ways of trying to get in touch, just let it be for a while. They’ll put out a statement or reach out eventually.
Double Down on Your Best InvestmentsOnce you’ve completed your first full year as an angel investor, you’ll probably want to start thinking about a goal amount you’d like to invest next year.
Personally, I’m a proponent of pushing money into at least 10 deals per calendar year. But before you start committing all your capital right out of the gate, make sure you set some aside for some of the startups you’ve already invested in.
Generally speaking, a startup that’s doing well will move on to raise another round of financing. And if you still believe in that company a year later, you should take that opportunity to double down by investing again, also known as “going pro rata.” Not only does this help keep your stake from being diluted… it’s also a great way to keep up with a company you have a relationship with already.
It’s Been a Banner Year for Healthtech Startups2020 has been a year like no other for the healthtech industry.
During the first nine months of the year, funding for digital health companies hit $10.3 billion, breaking all previous year-over-year records.
That number is up by 43% from the first nine months of 2019, when digital health funding surpassed $7 billion, according to Mercom Capital.
Mercom also reports that in Q3 2020 alone, digital health companies raised $4 billion in VC funding over 195 deals, up more than 40% from the previous quarter. It’s also a full 100% increase from the $2 billion raised in Q3 of 2019.
Seed-stage and Series A rounds alone raised over $1.2 billion in VC funding, dominated by sectors like telemedicine, mobile health apps, data analytics, and wearable technology.
Much of 2020’s healthtech boom was prompted by the COVID-19 pandemic, which forced health-care companies around the world to go digital practically overnight.
Let’s talk about some of the biggest news from the healthtech space and some of our biggest predictions for the industry’s future.
The Year of the Healthtech ExitThis year, mergers and acquisitions (M&As) are the most popular exit strategy for health investors and companies, according to Mercom.
In the first nine months of the year, there were 132 M&A transactions in the digital health space, compared to 125 during the same time period last year.
Here’s a sampling of some of the biggest ones:
In October, telehealth powerhouse Teladoc acquired diabetes monitoring company Livongo for $18.5 billion. Both Teladoc and Livongo are two of the largest public virtual health-care companies, and their consolidation is expected to help them dominate the healthtech industry.
It’s also been a big year for privately held healthtech startups.
In fact, Teladoc completed a $600 million acquisition of privately held InTouch Health over the summer. The deal was first announced in January and was completed in July for $150 million in cash and 4.6 million Teladoc shares.
But it’s not just M&As that have taken the healthtech world by storm. Some of the year’s largest public offerings also came from healthtech companies.
For example, health benefits platform Accolade raised $220 million in its July IPO. Additionally, telehealth company Amwell raised $742 million in their September IPO, and telemedicine giant GoodRx raised over $1.14 billion in an
IPO the same month.
Telemedicine Has Taken Center StageCOVID-19 has forced health-care organizations to adopt innovative tech that may have taken another decade to take root otherwise.
This year, there was no health-care trend more obvious than the sudden shift from in-person medical visits to telehealth. While telehealth has been around in some capacity for quite some time, it was COVID-19 that forced its wider adoption.
In fact, the Center for Connected Medicine reported that in the beginning of 2020, 26% of health-care executives listed shifting to telehealth and virtual care as an innovation priority. By October, that number had jumped to 49% of health-care executives.
McKinsey & Company reports that health-care professionals are now seeing between 50 and 175 times the number of virtual patients they did pre-COVID.
Around 46% of patients are using telehealth in place of in-person visits, up from 11% in 2019.
McKinsey anticipates that telehealth visits could soon account for $250 billion of what medical insurance holders spend on medical appointments each year… up from $3 billion per year before COVID-19.
The Healthtech Boom Isn’t Ending Anytime Soon
Ultimately, times of disruption are where angel investors can make some of their biggest fortunes, and it’s no different in the healthtech industry.
We anticipate that some of the best and most lucrative opportunities will come out of this space in 2021 and beyond. In fact, it’s likely that healthtech will boom for at least the next five years.
Continue to search for the most promising tech-enabled health startups out there… and we’ll keep doing the same.
Deal SnapshotsCortex uses machine learning to provide data-driven, predictive insights on the effectiveness of their clients’ visual marketing strategies. This startup has already learned how to capitalize from a massive beachhead market of $500 billion+ in visual advertising, working with top brands such as Toyota, L’Oreal, Deloitte, Marriott, Oreo, Kao, and more.
Cortex currently has a $600,000 run rate.
Minimum investment: $250
Care Angel is a digital health platform using AI and voice-enabled technology to provide patients with remote, long-term monitoring, which is then sent to clinicians that are trained in chronic care. Care Angel believes in “aging in place,” acting as the only phone-first platform that supports multi-modal communications options, allowing patients to receive treatments in the comfort of their own home for an extended period of time.
Care Angel works with over 600,000 members a month and has improved overall operational and clinical efficiency by 700% – at 1/100th the typical price.
Minimum investment: $494.05
VAN ROBOTICS is the creator of ABii, an artificial intelligence-powered tutor that helps students learn standards-aligned lessons while also adapting to each student’s unique learning habits. Initial testing showed 67% of students improving their results by 34% on standard curriculum exams after only three sessions with ABii, which explains how this startup surpassed $180,000 in sales in its first four months alone.
VAN ROBOTICS launched in January of this year and was selected to join Techstars’ Austin accelerator program.
Minimum investment: $250
Vampr is a one-of-a-kind company using a Tinder-style format to connect musicians with other serious professionals. Think LinkedIn, but made especially for the music industry. Vampr’s co-founders are accomplished musicians whose combined expertise has allowed Vampr to acquire over 600K users in 198 countries.
Vampr has an incredibly low customer acquisition cost of $0.09.
Minimum investment: $250
Neighborhood Sun is fighting climate change by empowering the multibillion-dollar community solar market and providing clean energy to the 77% of the population who cannot access it. In 2019, Neighborhood Sun saw a 75% increase in growth revenue, up to $727,696 from $416,906 from the year prior.
Neighborhood Sun is a Certified B Corporation, a classification of businesses that balances purpose and impact.
Minimum investment: $100
Stojo is a silicone-based collapsible container company committed to ending disposable culture. This startup has used its sustainability- focused approach to sell over $15 million worth of eco-friendly, cost-efficient drinkware. Its products can be found in Starbucks, Anthropologie, Kohl’s, Whole Foods Market, Bed Bath & Beyond, Urban Outfitters, and more.
Stojo has been featured by Goop, Bazaar, Condé Nast Traveler, and more.
Minimum investment: $150