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Angel Investors Profit From Slumping Markets

Affluent investors increase investments, despite market downturn

By Wesley Oliver,  Newser Staff

Posted Jun 18, 2008 4:26 PM CDT
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(Newser) – The bearish market hasn't stopped angels from acting like bulls, Portfolio reports. Angel investors, those who fund start-ups and small companies, are profiting from Wall Street's woes: Reduced private equity funding has made angels the go-to source for capital, improving their bargaining position and giving them more chances to invest.

“The stock market isn’t that attractive. Bonds aren’t that attractive,” one angel explains. “Angel investing offers people a different option.” Despite the market downturn, angels plan to boost their investments. They are treading carefully, but one confirms that economic turmoil makes for good business: “If the market goes down, it will be a great opportunity.”

The market downturn has prevented angel investors from acting bullish. We see more checks being written, more companies being financed, said one.
The market downturn has prevented angel investors from acting bullish. "We see more checks being written, more companies being financed," said one.   (Index Stock)
About 81 percent of members from the Angel Capital Association said they intended to invest in three to nine companies this year, compared with 77.5 percent the year before.
About 81 percent of members from the Angel Capital Association said they intended to invest in three to nine companies this year, compared with 77.5 percent the year before.   (Index Stock)
Angels face limits on their ability to cash out their investments, including a downturn in initial stock sales, tighter credit at banks, and a decline in mergers and acquisitions.
Angels face limits on their ability to cash out their investments, including a downturn in initial stock sales, tighter credit at banks, and a decline in mergers and acquisitions.   (Index Stock)
In economic lingo, angel investors are private high net-worth individuals who fund start-ups and small companies
In economic lingo, angel investors are private high net-worth individuals who fund start-ups and small companies   (Index Stock)
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You too can be a (small-scale) angel investor
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investing • private equity • business • credit market • startup

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