Startups and intrepid entrepreneurs have long known that venture capital firms are not the best place for their first round of funding. Angel investors – those individuals and groups who provide an idea’s first cash infusion – had a busy year in 2011.

The HALO Report released last week by the Angel Resource Institute, Silicon Valley Bank and CB Insights is the first comprehensive report on the hard-to-measure world of early startup investment. The report provides great insights for investors and company founders alike, and also highlights the diverse locations and industries receiving funds.

In total, $873 million dollars were distributed last year by angel investment groups. While that isn’t much compared to the billions invested by venture capital funds, angel investment increased a whopping 40% over the amount invested in 2010. The median investment increased from $500,000 to $700,000, while the average amount contributed rose from $840,000 to $1.11 million.

Predictably, California tops the list as the region receiving the most investment dollars, although 70% of the money and 79% of the deals were completed outside the Golden State. Other leading regions were New England, with 14.6% of all deals and the Great Lakes area with 15.9%. Healthcare and internet businesses led the pack in receiving cash, with 58% of all funding going to ventures in those sectors.

While more money may be available for new startups and their associated entrepreneurs, dangers still lurk. Having an intelligent business strategy and well-defined launch plan are key to lasting success and profitability.