Some angels are putting less of their own money on the line by finding other people to invest with them. Co-investments increased last year, according to the Center for Venture Research, and half of those surveyed by the Angel Capital Association said they would increase co-investing with other angels this year.
Since Drew Smith retired as a venture capitalist three years ago, he has invested around US$25,000 in each of four firms, including a market research software start-up and one that makes technology to play Web videos on phones.
Now, he said: “I’m cutting back. For me to make an individual investment on the order of US$25,000, it would have to be a really great opportunity.”
Instead, he is investing smaller portions alongside other investors.
“I can reduce my bite size a little bit in terms of what goes into each investment, but still stay active,” he said.
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