Health care venture capital has become scarcer in Indiana the past two years, but there are indications that angel investors are picking up some of the slack.

National data issued last week showed that angel investors boosted their median contribution 40 percent last year, to $700,000, from the previous year. And health care investments averaged $1.5 million per deal.

Overall, angel investors poured $873 million into 573 companies last year, with the biggest chunk of those dollars—37 percent—going to health care, according to the HALO Report 2011, released March 8 by Silicon Valley Bank, the Angel Resource Institute and CB Insights.

It was the first report of its kind of the difficult-to-track market. Angel investors are typically wealthy individuals who not only invest their money in startup companies, but often also their time and expertise.

In central Indiana, HALO Capital Group—not associated with the HALO report—has doled out $18 million to 13 startups since it formed in late 2007. Significant chunks of that money have gone to health care companies, such as NICO Corp, PolicyStat LLC, EndGenitor Technologies Inc. and Symbios Medical Products LLC, all based in Indianapolis.

Around the Midwest, health care is the most popular investment, according to the HALO Report 2011. Thirty-one percent of all angel investment deals in the Great Lakes region involved health care companies, with Internet companies a close second at 28 percent.

Nationally, the most popular health care companies by far for angel investors are those making medical devices. Such companies drew 60 percent of all health care investment dollars last year, according to the HALO Report 2011, with all pharma, biotech and drug development firms combined drawing just 22 percent.

Venture capital has increasingly moved away from early-stage companies. According to the 2011 MoneyTree Report, put out by PricewaterhouseCoopers and the National Venture Capital Association, the amount of money invested in seed stage companies by venture capitalists last year dropped 48 percent compared with 2010.

Seed investments by venture capitalists last year totaled $919 million, or $2.3 million per company. The number of deals was nearly identical in each year.

In Indiana, venture capital invested in life sciences and health care companies soared to more than $50 million per year before the recession, and then bottomed in 2010 at just $7.4 million. Investments recovered last year to $27.2 million.

But new deals inked in 2011 drew the smallest amount of money since at least 2005, according to a count by Cleveland-based BioEnterprise, a life sciences development group. Nine Hoosier companies received commitments for just $14.1 million last year.

The MoneyTree report captures payments when they are made, not necessarily when the investment deal was originally struck.

“There’s plenty of capital out there, but it’s looking to invest later if it can, and to drive lower valuations in the company,” David Johnson, CEO of BioCrossroads, an Indianapolis-based life sciences development group, said in a February interview. He added, “The risk curve for much of the market continues to migrate up instead of down.”