The bad news is that they're driving harder bargains, and taking longer to commit their resources.
If you are looking for funds, be prepared for a buyer's market. That means requests for more control as well as lower valuations. "I'm not saying we are going to be angels from hell, but we are not going to be stupid about how to price," says John May, managing partner of New Vantage Group in Vienna, Virginia. On the other hand, says Bill Warner, chairman of the Triangle Accredited Capital Forum in North Carolina, "no angel wants to put an entrepreneur in the position of not being able to reap benefits from a successful exit."
Wehrum also notes that while the total amount of money invested in 2Q08 -- $12.8B -- is up 4.2% over the same period in 2007, the total number of companies funded -- 23,000 -- is down 3.8%. The trend towards increased deal syndication continues as investors put the risk burden on multiple shoulders.
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