Will Angel Investing Bounce Back This Year?

Quick Reminder— Applications for this month’s VITALIZE Angels cohort are closing TODAY, May 25th! We’d love for you to join our 500 members.

Will angel investing bounce back this year?

We saw peak levels of angel investing in 2022, and things have really cooled off since. I posted the following tweet last week on this topic:

A variety of responses came in:

My view is that the two are inextricably linked. The rise in volatility broadly is a mental tax. Pulling back on angel investing is a way to not add to the chaos.
-@AdamLipman1

Uncertain real estate values. Inflation. -@Keanekatkeane

I also think a lot of investors believe the bottom is still to come and they are waiting to be opportunistic and time the bottom which is ultimately fruitless.
-@hazesyah

Lack of exits is a big driver too, IMO. -@PaulJohnsonMN

Hard to see it coming back without some liquidity options (exits)
-@KartheeMadasamy

I think a lot of angel capital was the result of the massive surge in public equity value, which gave angels bigger wings... then that capital was deployed at the same time many public equities collapsed so the checks writing comfort receded. As public equities rebound, angels will return.
-@GoodsCapital

The most successful angels I know have not stopped investing. As for tourist capital, I think we’ll see a recovery starting in Q3. There are simply too many exciting opportunities right now. -@MattWilsonYYC

For some founder groups it'll come back...for others it'll still be a desert with even fewer oasises. -@TheFinTechRonin

As you can tell from the responses above, there are a number of perspectives on whether or not it’s a good time for angels to invest. And no one really knows when angel investing levels will bounce back.

My guidance to angels right now is to invest what they can personally afford. My own angel investing amount is down a bit this year, but I am continuing to write a small check every 1-2 months. I am a firm believer that anyone who is angel investing should continue to invest in all cycles. Pacing is very important, and I think we all learned a key lesson from 2022:

However, instead of sitting on the sidelines and jumping back in at really high levels next time things heat up, why not ease in with a moderate pace of investing that is sustainable in both bear and bull markets?

It’s also a great time to start writing small angel checks if you haven’t jumped in historically.

Just make sure you start slow and don’t make the same mistake that many angels (including myself) made in 2022 😀 

Thanks for reading!

Going forward, we want to address YOUR questions in these brief angel investing newsletters. Reply to this email or ping me on Twitter to let me know your burning questions on anything related to angel deals!!

Peace, love, and angel checks,
Gale