What do the results of the survey say about Business Angels in the Czech Republic?

Czech Angel Investors See High Success Rate in Startups

Contrary to the widely accepted rule that a large percentage of startups fail, the survey suggests that investments have mostly been successful so far. About two-fifths of investors (41%) consider the performance of their investments in startups to be higher or equivalent to other asset classes. Exit has already been achieved in some of their investments by about 40% of investors, with the number of investors who sold their investments increasing by more than 10 percentage points compared to last year. Almost 86% of them sold their share at a profit. Investments were most commonly evaluated once to five times (51.4%).

 

Overpriced Valuations Troubled Investors but Expected to Disappear

Overpriced valuations have been troubling investors, but they will disappear this year. On average, each investor has about eight investments in startups, with each of them adding an average of 2.6 investments last year. This is despite the fact that almost half of the investors said they were troubled by high startup valuations last year. However, they generally rated 2022 as better than average in terms of the quality and quantity of startups, investment environment quality, and portfolio performance. Venture capital investments are expected to continue this year, although investment appetite is 12% lower than in 2022. About two-thirds of the surveyed investors said they plan to invest at the same level this year (38%), with 16% planning to invest significantly more and 13% planning to invest less than last year.

Investment Environment Improving in 2023, Opportunities Await

According to investment professionals, there may be good investment opportunities this year. "It doesn't make sense to limit our investment activity now. This year, we want to continue at the same pace and invest in around 15 early-stage startups. The advantage is that some overpriced valuations of some startups, particularly in high-cost countries, have disappeared, which has distorted the entire market," says Petr Šíma, partner at DEPO Ventures.

Angel investing is not for everyone. According to the survey, entrepreneurs typically invest money in early-stage startups (8.9%), while a significant portion of investors is retirees or high-net-worth individuals.