A Wall Street Journal blog piece reports that angel investors while still interested in funding startups are scaling back on their average investment size and demanding lower valuations. In other words, if you should be so lucky as to find a serious angel investor, he will offer you less money for a bigger stake in your company.
With bank financing so tight, many entrepreneurs hope to find angel investors to provide them some seed money. But there’s new evidence that even angel investors are scaling way back – and will continue to.
Venture_Capital_Entrepreneurs_2009The Center for Venture Research at the University of New Hampshire yesterday released its year-end report of angel investing in 2008, showing that angel investing dollars fell 26.2% over 2007, to $19.2 billion. The total number of angel deals fell only 2.9%, to 55,480.
What this means: Interest among affluent individual investors to invest in small growing companies hasn’t abated much – but those investors are willing to devote fewer dollars to each deal. “They are committing less dollars resulting from lower valuations and a cautious approach to investing,” said Jeffrey Sohl, the Center’s director, in a news release. (source)
Venture_Capital_Entrepreneurs_2009The Center for Venture Research at the University of New Hampshire yesterday released its year-end report of angel investing in 2008, showing that angel investing dollars fell 26.2% over 2007, to $19.2 billion. The total number of angel deals fell only 2.9%, to 55,480.
What this means: Interest among affluent individual investors to invest in small growing companies hasn’t abated much – but those investors are willing to devote fewer dollars to each deal. “They are committing less dollars resulting from lower valuations and a cautious approach to investing,” said Jeffrey Sohl, the Center’s director, in a news release. (source)
What all this means is that entrepreneurs will have to become more sophisticated about how they cobble together their financing. The days of merely writing a business plan and hoping that some kind stranger writes a check are over. For those willing to learn there are sources for more sophisticated financing lessons.
When it rains it pours. Anyone not depressed by all this bad news?
Posted by: Caprinardo Delirio | April 01, 2009 at 09:00 AM
It's really depressing out there. No one is investing. No one. We have been at it for five months and made 33 presentations to far. Not a nickle.
Posted by: Angry | April 01, 2009 at 01:55 PM
I am an investor. We fund early stage-start-up ventures, existing Ventures and
do total completion and investment expansion projects. Leverage walk-in equity
on discounted commercial or residential purchases by employing our funds for
down payment & closing costs. Qualify for better Rate & Term based on a
lower LTV but still achieve high CLTV or $0 down financing. Funds available
for acquisition, rehab or carrying costs including CASH-OUT! Advance equity
fund disbursement based on verifiable walk-in equity. No income, asset or
credit requirements. Seasoned Funds for reserves and earnest money also
available. Brokers welcome!
Contact us for start-up funding, commercial RE Finance, seed capital, early
stage start-up ventures, Joint Venture/Partnership investment with liquidity
from our part, Loan, Mortgages. We can fund excess of $10M.
Send us an e mail on jscapitalinvestmentinc@gmail.com
Jerry Smith
Posted by: jerry | June 06, 2009 at 02:32 PM
I am an investor/Lender.We focus on Seed Capital, Early-Stage, Start-up Ventures,existing LLC and total completion and expansion of investment projects with immediate funding.Have extensive corporate and private background.With mammoth sized connection portal.Can Fund excess of $5M multiple projects,Equity ,mortgages and open to long term biz r/ship with partner
with funding sustaining our company 3 win policy. Contact financialcapital.investmentplc@gmail.com
Posted by: moore | October 27, 2009 at 07:02 AM