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Angel in Waiting

Angel investing in early stage companies lags, but are investors latent or just late?

This story appears in the March 2006 issue of Entrepreneur. Subscribe »

If you're up on your VC and angel investor news, you've heard the reports that funds are flush with cash and ready to invest. Whether that will pay off for your company may depend on the stage of your business. As both professional VCs and individual angel investors try to minimize their risks, they appear to have a growing preference for later-stage growth investments over seed stage opportunities.

A new study from the Center for Venture Research at the University of New Hampshire's Whittemore School of Business and Economics offers some proof. Although the dollar amount invested by angels appears to be holding steady, the report showed an 11 percent shift in angel investments away from seed and startup stage ventures during the first half of 2005 compared to the same period of 2004.

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