Despite the strangely giddy startup and venture capital market, I’m hearing from a number of sources about one place the woes of Wall Street are hitting the startup market now: in the willingness of angel investors to invest in companies.
I’m hearing that some angel investors — who typically have a great deal of their wealth tied up in stocks, bonds, and similar investments – have been somewhat more conservative in their startup investments recently.
It’s not so much any reaction or response to the future prospects of the startups they are talking to, but more a function of how much disposable wealth they happen to have on hand at the moment.
Angel investors tend to make their investment decisions somewhat based on how much spare cash they might have from their other investments. On the other hand, I am hearing from some professional venture capital investors that they are encouraging and looking to inject larger rounds into the companies they do fund, to give them some cushion to glide over whatever kind of economic climate shakes out over the next couple of years.