Tech Angels flee as economy nosedives

The salad days for the stock market are clearly over, but up until now tech startups could count on angel investors dipping into their own funds and providing that vital first step when creating a new company or testing out a new idea. But even that route is closing for nascent entrepreneurs…thanks to the stock market.

According to the New York Times, some investors have taken a look at the tumbling prices of otherwise reliable shares and decided that, given the current climate, it makes more sense to invest in those stocks and wait for the inevitable upturn than to roll the dice on business plans (or in some cases, simply a good demo) that may and most likely won’t pan out into a sustainable, profitable business.

Canada seems to be further behind the curve than the United States regarding angel investing, much like the rest of our economic outlook. In fact, at a recent Angel Forum there were a healthy number of not only companies showing of their wares but also quite a few investors eager to find that Next Big Thing. But given the interconnected nature of the world economy and the dominant position of the United States in tech funding, can the angels be close to fleeing heavenward here as well?