U.S. angel investment declined 6.5 percent to $8.5 billion in the first half of the year and if the trend continues, it could impact future job growth, according to the University of New Hampshire's Center for Venture Research.
Angel investors are increasingly shying away from providing seed or start-up capital to entrepreneurs, the center said. Seed or start-up capital represented 26 percent of the total investment in the first half of 2010. That's compared to the category representing about half of investments just two years ago.
"Historically angels have been the major source of seed and start-up capital for entrepreneurs, and this declining interest ... represent(s) a significant change in the angel market," said Jeffrey Sohl, the center's director. "Without a reversal of this trend in the near future, the dearth of seed and start-up capital may approach a critical stage, deepening the capital gap and impeding both new venture formation and job creation."
The top categories for angel investment in the first half of the year were healthcare services/medical devices and equipment (24 percent), biotech (20 percent) and software (12 percent), the center said.