A Business Week post by Scott Shane with Case Western Reserve University describes his research that shows how angel groups’ deal funnel got tougher from 2007 to 2009. When entrepreneurs apply to a venture group, there’s an initial screening that weeks out many, followed by a pitch, then more due diligence, and then, for a few, an investment. At each stage, companies are weeded out.
In 2009 compared to 2007 and 2008, half as many companies survived the initial screening, and less than half as many survived the due diligence process. Check out the post to see a graph of how the funnel has shifted.
Yet more evidence that yes, indeed, the start-up investment climate is getting tougher.
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