The Houston Chronicle writes that even though overall angel investing has increased 15% to 12.6 billion in the first half of 2006, the percentage of that money that went into early stage companies has dropped from 48% to 40%. The funding gap continues to grow though they are optimistic “the funding environment for new entrepreneurs is unlikely to get any worse”.

They give 2 reasons for this:

1. VC coming into the deals after angels are pushing into even more mature deals, and some of these ange groups are beginning to act more like VC funds.
2. Angel groups springing up all around the country allow angels to get beyond the sub $500,000 investment fairly easily

1. John May, from the Angel Capital association, disagrees stating that many of the smaller deals just don’t get reported.

Evan Bartlett :: Oct.17.2006 :: Uncategorized ::