Recently, John Harbison joined Andrew Kazlow, the Host of The Diligent Observer Podcast, to discuss the publication of the AFR. Some hot topics they discussed:
Three Trends That Matter
- Angel board representation is declining — even as outcomes improve with it.
The 2025 report shows that angel board representation dropped from 34% to 22%. This trend is concerning, given the data: companies with angel participation on the board deliver ~8x better returns. Harbison emphasizes the importance of angels pursuing board observer seats when full board positions aren’t available, ensuring investors maintain influence and visibility in portfolio companies. - Early-stage valuations are compressing.
The gap between median pre-seed ($10M) and Series B ($19M) valuations has shrunk by nearly 3x in recent years. This signals a tighter market where discipline around valuation and capital efficiency is more important than ever for both angels and founders. - Hybrid group models are writing bigger checks.
Groups that combine the strengths of both networks and funds are investing larger amounts than pure models. This reflects a broader evolution in angel group structures and has implications for deal flow, syndication, and portfolio strategy.
Why This Matters to Angel Investors
Harbison also shares a data-driven framework for follow-on rounds, highlighting how second and third investments often outperform first checks by balancing risk reduction and valuation timing. He also offers practical strategies for navigating cyclical downturns, reminding investors that “we’re in one of those troughs” — and efficiency matters more than ever.
The Angel Funders Report is a flagship ACA initiative, powered by angel groups across North America who contribute deal-level data. The insights inform not only investors and founders, but also policymakers, researchers, and ecosystem leaders who rely on accurate benchmarks for the early-stage economy.
We thank John Harbison — ACA Board Member, Chairman Emeritus of TCA Venture Group, and longtime contributor to the Angel Funders Report — for his leadership and expertise in translating this data into actionable insights for the angel community.
Listen to the Conversation
Listen to the full episode HERE
Explore the data: https://angelcapitalassociation.org/angel-funders-report.
