Start-Ups Will Keep Struggling in 2010 (WSJ)

Prof. Jeff Sohl, Director of the Center for Venture Research at UNH, was interviewed in Tuesday’s Wall Street Journal article, “Start-Ups Will Keep Struggling in 2010.”  The following is an excerpt of that article:

Funding from angel investors, or high-net-worth individuals who provide capital to young companies, fell 30% to $9.1 billion in the first half of 2009 compared with the same period a year earlier. That figure is expected to remain flat for 2010, according to Jeffrey Sohl, director of University of New Hampshire’s Center for Venture Research, which tracks the data.

What is encouraging, Mr. Sohl says, is the number of deals has ticked up slightly. While angels are investing less—$370,000 per deal in 2009, versus $530,000 in 2008—about 24,500 ventures received funding during the first half of 2009, compared with 23,100 the year earlier.

“They are still doing the deals, but the deals are much cheaper now,” he says.

Venture capitalists, too, are continuing to invest, but typically in later-stage companies already in their portfolios rather than new prospects, says Mr. Sohl. The average deal size declined to $5.7 million in the first half of 2009, compared with $7.4 million to $7.8 million between 2005 and 2008.

– Click here for the full WSJ article.