Presentation on the current State of Angel Investing with hot off the press data from PitchBook.

1. May 8, 2024
Elaine Werffeli
elaine@elaingelinvest.com
Seattle Angel Conference 25
National, Regional & Local
Insights on
Angel Group Investing from 2023 & 2022

2. Sharing Investor Insights for 2023
US
Northwest
SEA

4. Summary of Market Conditions
• First quarter of 2024 did not start on a high note for the US Venture Capital Community
• Market Headwinds continue to enforce their will on financial Markets
• Inflation within the US has been sticky in it last mile descent to the Federal Reserves 2% Target
• Become increasingly unlikely that rates cuts will occur in the first half of the year
• Investment Climate is Investor Friendly:
• Abundance of demand and opportunity
• Focus with existing portfolios
• Investors reduction in activity – VCs have become highly selective with deals
• Investors seem to be circling their wagons and making sure their most promising companies are
positioned for success before they make new bets
• Pre-Seed and Seed rounds are at their lowest relative share than any other time in the
last 10 years
• Too early to tell where 2024 is going
Source: PitchBook Q1 2024 Venture Monitor & Platform

5. The US VC-Backed Company count now sits
above 55,000 companies – Record Number!
• This high number highlights the
competition for capital
• Investors now have more choices
• Benchmarks for deals have increased
• Stronger companies are able to compel
investment while struggling companies
wont
• Headwinds make it necessary for
companies to move significantly toward
profitability while maintaining growth
Source: PitchBook Q1 2024 Venture Monitor & Platform

6. 500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
$-
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
$9.0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022 2023 2023 2023 2023 2024
US Pre-Seed and Seed Deal Activity by Quarter
Deal Value ($B) Deal Count
Capital Invested in Pre-Seed and Seed continued to drop while Deal
Count was up slightly in Q1 2024
Source: PitchBook Q1 2024 Venture Monitor & Platform
• Deal Value slumps to a 14 quarter low
in Q1 2024
• Deal Count picked up slightly from Q4
2023 but is at levels seen in 2019
• Several factors:
• Startups intentionally delaying
raising next round
• Shift in investor priorities
• Rounds taking longer to close
• More thorough DD
• Higher Benchmarks
• Startups have:
• Kept opened latest round
• Taking bridge financing
• Many Investors have advised:
• Reduce burn
• Extend runway
• Investors in market downturn tend to
focus on helping existing companies
and reserving capital for follow-on
investments

7. On a annual basis we can see the significant
drop YOY in US Pre-seed & Seed Deal Activity
• YOY Declines from
$24.2B to $14.6B for
combined value of
Pre-seed and seed
deals, a 40% decline
• Partially attributed to
pullback of large
investors or slowed
activity from Seed
Stage

8. Despite lower investment pace, the median 2023
Pre-seed and Seed Deal Sizes are comparable to 2022

9. And median Seed Pre-Money Valuations are
comparable to 2022 while median Pre-Seed, Pre-
Money Valuations dropped some

10. At the Series A level deal value and count
dropped significantly in 2023 • YOY Declines from $70B to
$41B for combined value of
Series A deals, a 44%
decline
• While Deal Value even
dropped below pre-
pandemic levels, Deal Count
is higher than 2020
• In these leaner times many
founders focused on getting
to the next milestone before
trying to raise so fewer
companies have been in the
market
• Also seeing a decline in the
outsized rounds
• Aligns with increasingly
popular “raise less, build
more” philosophy
3,330
3,472
3,561
3,273
3,616
3,740 3,783
3,552
5,355
5,090
4,284
1,000
2,000
3,000
4,000
5,000
6,000
$-
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
$90.0
$100.0
Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
US Early-Stage VC Deal Activity
Deal Value ($B) Deal Count
$41.1
$70.1
$86.6
$44.6
$42.7
$41.4
$30.0
$26.0
$26.6
$22.2
$17.4
Source: PitchBook Q1 2024 Venture Monitor & Platform

11. Median Series A Deal Sizes & Valuations both
declined YOY

12. Sharing Investor Insights for 2022
US
Northwest
SEA

13. Data Source: 2022 HALO Report

14. Large Decrease in Seed Deals impacts overall
deal number
1,424
Total Deals
29% decrease YOY
1,001
Seed
42% decline YOY
406
Series A
43% increase YOY
+ +
Source: 2022 Halo Report with 1,424 deals

15. Large increase in more proven Series A Deals
impacts overall deal Investments while
significantly lower amount of capital in Seed
$4.3B to $2.3B
Seed
46% decline YOY
+ +
$2B to $4.9B
Series A
145% increase YOY
$6.3B to $7.2B
Total Deals
14% increase YOY
Source: 2022 Halo Report with 1,424 deals

16. How do the Regions stack up?

17. 31%
13%
9% 9%
7% 7%
6% 6%
5%
4%
2%
27%
11%
7%
6%
13%
8% 8%
3%
9%
6%
3%
0%
5%
10%
15%
20%
25%
30%
35%
California New York Texas NorthEast Southeast Northwest Great Lakes Outside US Southwest Mid-Atlantic Great Plains
2022 % of Dollars Invested 2022% of all Seed/Series A Deals
Follow the Money..From Where? California Angel Groups
are responsible for 31% of $ Invested and 27% of Deals
Seed/Series A Deals and $ invested by investor location
Source: 2022 Halo Report with 1,424 deals

18. 81%
77% 74%
69% 68% 68%
63% 61%
52%
45%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
From Where? The vast majority of Northwest Angel Groups deals are
homegrown while Angel Groups in New York aggressively invest outside
55% of the time, all in region funding down significantly from 2021
Source: 2022 Halo Report with1,424 deals
All areas saw an
increase in out
of region
investing

19. To Where: Southeast & California remains a draw for investors
for out of home region dollars being invested in companies
there. 12% of $ from other regions comes to the Northwest
Where Out of Home Region Deals Go -
% Deals
Where Out of Home Region Deals Go -
% $ Invested
Source: 2022 Halo Report with 1,424 deals

20. 21%
17%
10% 9% 9% 9% 8% 7% 7%
2%
0%
5%
10%
15%
20%
25%
To Where? California & Southeast are the regions where
the largest of all Angel Group backed deals were located.
Northwest is now ranked 3rd
Source: 2022 Halo Report with 1,424 deals
-5%
6%
-15%
-4%
19%
1% -14% 35% -45%
2%

21. What? Information Tech was the top industry both
Nationally and the Northwest followed by B2C. Northwest
invests more in these two areas
Source: 2022 Halo Report with 1,424 deals
33%
23%
20%
15%
3% 2% 2% 1% 0%
36%
27%
15%
17%
2% 2% 1% 0% 0%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Information
Technology
Consumer Products
and Services (B2C)
Healthcare Business Products &
Services (B2B)
Financial Services Energy/Enviro Materials &
Resources
Biotechnology Agriculture
US '22 Northwest' 22

22. How Much? Pre-Money Seed Round Valuations grew 20% Nationally
to a Median of $9M and Average of $12M while Northwest Median
valuation is now at $10M slightly above the National average
Source: 2022 Halo Report
20% 6%
43% 105% 0% -2% 62% 94% 10% -24% 80% 1% 35% -7% -6% -9% 8% 11% -47% -37% -43% -56%
YOY Growth%
$11
$10 $10
$9 $9
$9
$8
$7
$5
$3
$9
$17
$12
$19
$13
$9
$9 $9
$9
$9
$5
$12
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
Seed Round Pre-Money Valuation ( in Millions)
Median Pre-Money Average Pre-Money

23. $36 $34
$30 $30 $28 $27
$24
$20 $20 $19
$28
$63
$58
$42 $40
$71
$34 $34 $32
$50
$29
$45
$-
$10
$20
$30
$40
$50
$60
$70
$80
Series A Pre-Money Valuations
Series A Median Pre-Money Series A Average Pre-Money
How Much? Pre-Money Series A Round Valuations grew
significantly nationally to a Median of $28M and Average of $45M
and Northwest Median valuation is also at $28M
Source: 2022 Halo Report
72% 64%
219% 268% 73% 69% 49% -6% 144% 128% 75% 221% 36% 72% 51% 64% 11% 10% 100% 180% 65% 86%
YOY Growth%

24. How Big? Seed Round - Northwest Median Actual Investment
was 50% of Funding Round Size in line with National numbers
for a total actual investment of $500K
Round Asking Size
Northwest:
• Median = $1.0M
• Average = $2.17M
National:
• Median = $930K
• Average = $2.34M
When the Average is larger than the Median value, we have outliers at the high end of the
distribution that are pulling up the averages
Source: 2022 Halo Report
Northwest:
• Median = $500K
• Average = $2.2M
National:
• Median = $500K
• Average = $2.0M
Actual Investment
50%
54%

25. How Big? Series A- At this stage Actual Investment came in
very close to the Funding Round Size
Round Asking Size
Northwest:
• Median = $6.5M
• Average = $14.54M
National:
• Median = $7.0M
• Average = $12.21M
When the Average is larger than the Median value, we have outliers at the high end of the
distribution that are pulling up the averages
Source: 2022 Halo Report
Northwest:
• Median = $6.0M
• Average = $14.1M
National:
• Median = $7.0M
• Average = $12.2M
Actual Investment
92%
100%

26. National Trends show the stark differences
between Seed and Series A
Source: 2022 Halo Report with 1,424 deals

27. How Much? A switch from last year now Follow-on garners
more than half of all investment $ in every region
Source: 2022 Halo Report with 1,424 deals
52% 52% 53% 54% 54% 54% 56% 56% 60% 60%
54%
49% 48% 47% 46% 46% 46% 44% 44% 40% 40%
46%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
California New York Southeast Mid Atlantic Texas SouthWest Great Lakes Northwest Northeast Great Plains National
Follow-on New Co

28. How? Preferred Equity is the #1 vehicle for both Seed & Series
A followed by Convertible Notes. SAFEs have pulled into the
third spot and seen in about 13% of Seed rounds.
Source: 2022 Halo Report with 1,424 deals
56%
47% 46% 45% 41% 40% 38%
31% 30%
25%
54%
42%
85%
24%
32% 38% 40% 44%
40%
51%
42% 47% 55%
32%
40%
13%
16% 16%
13% 9%
13%
9%
7%
23% 16%
0%
10%
13%
1%
4% 4% 3% 6%
2%
11%
5% 5% 8%
20%
4% 5%
0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
New York California Northeast SouthWest Northwest Texas Southeast Mid Atlantic Great Lakes Great Plains National Seed Series A
Preferred Equity Convertible Note SAFE Common
Seed Deal Structure by Region for 2022

29. Companies with Diverse Executive teams are
more likely to outperform their peers
Source: McKinsey & Company Diversity wins 2020 – How Inclusion Matters

30. 26%
19% 19% 19%
17%
16%
14%
13% 13%
9%
17%
0%
5%
10%
15%
20%
25%
30%
More Who? California has almost a quarter of all Female CEOs
and in New York a quarter of CEOs are female. Northwest is
just below the National Average for Female CEOs at 16%
% of Female CEOs across Regions % of Female CEOs within Region
Source: 2022 Halo Report with 1,424 deals
23%
14%
13%
10%
9% 8%
7% 7%
5%
2%
0%
5%
10%
15%
20%
25%

31. 31%
23%
21%
19%
16% 16%
14%
12% 11%
7%
19%
0%
5%
10%
15%
20%
25%
30%
35%
33%
15%
10% 10%
8% 7% 7%
6% 5%
1%
0%
5%
10%
15%
20%
25%
30%
35%
More Who? California has a third of all Minority CEOs
and almost a third of California’s CEOs are a Minority.
Northwest is below the National Average at 12%
% of Minority CEOs across Regions % of Minority CEOs within Region
Source: 2022 Halo Report with 1,424 deals

32. Sharing Angel Investor Group Insights
US
Northwest
SEA

33. There is Strong Female Participation in the
majority of Seattle Angel Groups in 2023
Source: Self Reported Angel Groups
34%
33%
29%
21%
19%
10%
0%
5%
10%
15%
20%
25%
30%
35%
40%
SAC TAAC E8 AOA Keiretsu NW SWAN
% Female Investors in Seattle Angel Groups - 2023

34. 18 Startup Funders in Seattle Area have shared data with us
Funder Type Stage Focus Avg Investment Size Year Formed
APIS Angel Event Fund Preseed & Seed Under $300K 2021
Trans Atlantic Angel Conference (TAAC) Angel Event Fund Preseed & Seed Under $300K 2021
FlyWheel Conference Angel Event Fund Preseed & Seed Under $300K 2017
Seattle Angel Conference Angel Event Fund Preseed & Seed Under $300K 2012
SeaChange Angel Active Fund Preseed, Seed & Series A Under $2M 2015
SWAN Angel Network Preseed & Seed Under $300K 2015
Virtual Angels Network Angel Network Preseed & Seed Under $300K 2021
Puget Sound Venture Club (PSVC) Angel Network Preseed & Seed Under $300K 1985
E8 Angels Angel Network Seed & Series A Under $300K 2006
Alliance of Angels (AOA) Angel Network Preseed, Seed & Series A Under $2M 1997
Keiretsu Forum NW Angel Network Seed & Series A – Post revenue Under $2M 2005
First Row Partners Micro VC Preseed & Seed Under $300K 2019
Startup Haven Micro VC Preseed & Seed Under $300K 2005
Untapped Capital Micro VC Preseed & Seed Under $300K 2020
Graham & Walker (G&W) Venture Builder Preseed & Seed Under $300K 2017
Allen Institute Venture Builder Preseed, Seed & Series A Under $2M 2016
Pioneer Square Labs Venture Builder Preseed, Seed & Series A Under $2M 2015
Madrona – Core Fund VC Preseed, Seed, Series A Under $10M 1995
Madrona – Acceleration Fund VC Series B & Series C Under $10M 1995

38. Thank You and hope you got a
few new insights to take away
with you today!