home | contact us

Thursday, April 2, 2009

Angel Investing Declines

Discouraging news for entrepreneurs and small business owners looking to raising capital was published earlier this week. BusinessWeek has a quick post "Looking for an Angel" that details the results from the University of New Hampshire's Center for Venture Research - Survey of Angel Investing that was released earlier this week.

According to the report, angel investing was down $19.2 billion (26%) in 2008! What is particularly interesting about this number is that the total volume of deals was only down 2.9%. This means that while companies are raising money, they may not be raising enough. The biggest losers in this appears to be companies that are raising money for growth as the survey found those companies took the biggest hit.

The study indicates that a best case for 2009 will be flat line. This points further to the need to conserve cash and maximize your capital outflows. Also, it shows you will need to be creative in your capital raising as the angel avenue might not be a viable option for many companies. The three F's - friends, families and fools will be more important than ever. In addition to these, you may also want to take a look at Spark Capital's Start at Spark and Charles River Ventures Quick Start - both are seed funds that will provide seed capital to companies. I've been debating whether or not to apply with one of our new ventures. If I do, I'll let you know how it goes.

In the meantime, have any of you had any luck with raising money from angels or with either of these new programs? Stories are encourages and welcomed.

No comments: