{"id":143,"date":"2009-02-03T22:23:01","date_gmt":"2009-02-04T02:23:01","guid":{"rendered":"http:\/\/blog.payne.org\/?p=143"},"modified":"2009-02-03T22:23:01","modified_gmt":"2009-02-04T02:23:01","slug":"angel-funding-contraction","status":"publish","type":"post","link":"https:\/\/payne.org\/blog\/angel-funding-contraction\/","title":{"rendered":"Angel Funding Contraction"},"content":{"rendered":"<p>Any entrepreneur considering angel funding should read today&#8217;s NY Times article &#8220;<a href=\"http:\/\/www.nytimes.com\/2009\/02\/03\/technology\/start-ups\/03angel.html?pagewanted=2&amp;_r=1&amp;ref=technology\">Angel&#8217;s Flee From Tech Startups<\/a>&#8220;, and some of the<a href=\"http:\/\/bijansabet.com\/post\/75374465\/are-angel-investors-fleeing-tech-startups\"> followup commentary<\/a>.<\/p>\n<p>Angel investors, unlike most professional investors, control most of their investment portfolio.\u00a0 If their equity investments drop (say) 35%, then they can <strong>immediately<\/strong> say &#8220;<em>whoa!<\/em>&#8221; and dial down their startup investments.<\/p>\n<p>Professionals (e.g. VCs), on the other hand, are investing committed funds from limited partners.\u00a0 The stock market can drop, but they&#8217;ll still have the $300m fund to &#8220;put to work&#8221; (otherwise, the LPs will ask why they&#8217;re paying management fees).\u00a0 It will take a VC fundraising cycle for the rebalancing to work through the system.<\/p>\n<p>Because of this, I think angel funding for new projects contracts much more quickly in market downturns.\u00a0 It will be interesting to see if the professionals take up the slack.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Any entrepreneur considering angel funding should read today&#8217;s NY Times article &#8220;Angel&#8217;s Flee From Tech Startups&#8220;, and some of the followup commentary. Angel investors, unlike most professional investors, control most of their investment portfolio.\u00a0 If their equity investments drop (say) &hellip; <a href=\"https:\/\/payne.org\/blog\/angel-funding-contraction\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-143","post","type-post","status-publish","format-standard","hentry","category-entrepreneurship"],"_links":{"self":[{"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/posts\/143","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/comments?post=143"}],"version-history":[{"count":0,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/posts\/143\/revisions"}],"wp:attachment":[{"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/media?parent=143"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/categories?post=143"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/tags?post=143"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}