Several interesting articles this week on the growing role Angel Investors are playing in the funding of tech and Internet related start-ups.
Seed Deals Account for 26% of Early-stage Web Investments from Giga Om covers the frothy state of angle investments in web start-ups and the growing clout of "super angels." These are folks who are experienced tech entrepreneurs or investors who look, act and behave in many ways like traditional VCs.
But unlike traditional VCs, super angels actively invest in seed stage companies. They also invest lower amounts of money than traditional VCs, between $25k-$250k.
They generally invest in groups with other angels. Some of these groups, like the famous Silicon Valley group The Band of Angels, are formal. Others are informal groups that invest together as it makes sense.
The article suggests - and we agree - that angels are disintermediating traditional VCs in many cases.
But even though Giga Om describes the web start-up market "frothy," the Forbes article Calling All Angel Investors points out that relative to demand, very few start-ups are able to attract angel investment.
The article uses as an example Pasadena Angels, an angel investment club that reviews 400-600 business plans a year. Of those, roughly 20% are invited to present to the club, and only about 15% of those get funded. If you do the math, this means roughly 97% of the companies submitting plans get turned down.
So while a lot of companies are getting funded, it is still is not easy to raise money from professional angel investors.