Credit Crunch Angels Tight credit has hobbled some entrepreneurs, but angel investors are still willing to step in where bankers fear to tread.

Collapsing banks and constricting credit markets have compelled many newly risk-averse investors to scurry for the sidelines. But not Eric Rosenfeld and his merry band of 50 angel investors in Portland, Oregon.

His Oregon Angel Fund recently raised about $2 million-more than twice as much as it did last year-and is eagerly scouting for promising young tech companies to invest in. "We see more checks being written, more companies being financed," said Rosenfeld, who is also a managing partner of Capybara Ventures, a Portland venture capital fund.

Rosenfeld and his fellow angels-private high net-worth individuals who fund start-ups and small companies-are hardly alone. Despite limits on their ability to cash out their investments-a downturn in initial stock sales, tighter credit at banks, and a decline in mergers and acquisitions-many angels say they are still willing to invest.

The Angel Capital Association recently surveyed 145 angel group leaders to ask whether they believed the number of investments and amount of funding would increase this year; nearly 55 percent of respondents said yes.

Speaking for themselves, association members said the number was even higher. About 81 percent said their group intended to invest in three to nine companies this year, compared with 77.5 percent the year before. A full 12 percent said they planned to make 10 or more investments in 2008, almost double the number in 2007.

What's more, the total being invested by the estimated 258,000 angel investors in the country is growing, albeit at a slower pace. The number grew 1.8 percent, to $26 billion in 2007, according to the Center for Venture Research in Durham, New Hampshire. And the number of entrepreneurial ventures that received funding in 2007 went up 12 percent, to 57,120.

Those figures, of course, were from before the recent credit crunch. There is no data for 2008, but Jeffrey Sohl, director of the Center for Venture Research, said the amount of angel money invested this year should be comparable to 2007.

At the same time, angels are also treading more carefully-asking tougher questions, choosing later-stage companies, or investing smaller amounts. And they're more likely to invest in businesses and industries with track records of success.

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