Not the news I was hoping to hear…
According to the NYT, angel funding for start ups is drying up. Although this story is anecdotal, its mere appearance in the illustrious NYT can be a self-fulfilling prophesy. They do mention a couple of brighter spots:
Some angels are considering only low-cost companies that could become profitable without venture financing. Others are acting less like angels and more like venture capitalists, spending much more time than is typical advising companies, including taking seats on boards.
This approach–getting to profitability quicker–is definitely on our minds as we get our start up SocialFeet.com off the ground. We’d also love to have a qualified lead angel who wanted to be more involved. We had already thought about getting smaller dollars amounts from a larger group of angels, as suggested elsewhere in the article.
Finally, I found some unintended irony in the article. They mention that angels are backing off from investing because they are wary that venture capitalists have already turned off the spigot. Yet, they end the article with Mark Heesen, president of the National Venture Capital Association, saying “If we don’t have angels, that hurts us. Where are we going to be getting our next Series A deals if those entrepreneurs aren’t out there with the ability to move their idea forward?” So who’s to blame here anyway, the VCs or the angels?