Angel Investors Pull Back From Betting On Start-Up Businesses

According to a recent study by the University of New Hampshire’s Center for Venture Research, “angels” are getting cold feet! (An angel is a wealthy individual willing to invest in a new business before anyone else does.)

Less than half (48%) of these investors are betting on new start-up businesses, a drop from 59% a year ago. And for years prior the figure was around 75%. Where are the “angels” investing? In later-stage companies, as their business plans appear better prepared and fleshed out. 

Venture-Capitalists Also Prefer Later-Stage Companies

“Big” is in, in the venture capital world these days. Industry data shows they’re putting bigger chunks of cash into larger, more-established companies and easing up on earlier-stage investments.

The VCs are opting for bigger investments in more mature companies because these firms might go public or be purchased more quickly than newer firms. The goal of any venture-capital investment is an “exit,” usually in the form of an IPO or an acquisition.