Angel investors are the optimistic financiers who give entrepreneurs their crucial first infusion of cash to bring their ideas to life. Now, in the midst of a punishing economic downturn that is sparing few companies, these patrons are cutting back on their bets and threatening the very foundation of the technology economy.
Unlike venture capitalists, angels invest small amounts of their own money - as little as $10,000 and usually less than $1 million - in very young companies. But like all investors, many angels suffered deep losses when the market plunged last fall.
That has left them skittish, investing in fewer technology start-ups and demanding more of those they do consider, leaving founders struggling to find money at the stage they need it most.
Full story from New York Times.