Warning Signs of an Angel Bubble
John Backus, founder and managing partner of New Atlantic Ventures, makes his case for why the rise of angel investing has created seed funds with a math problem. Backus points to data from the University of New Hampshire that in 2010 angels invested $20 billion in 61,900 companies (an average of $323,000 per company). He concludes angel-funded companies are being funded at a rate that can’t be absorbed by institutional VCs. Backus warns the angel bubble will keep inflating after the SEC allows start-ups to sell equity stakes to pools of small investors. [Source: The Washington Post]
























