– Mark Boslet is a contributor for PE Hub, a Thomson Reuters publication. The views expressed are his own. –
Super angels have been super active over the past year. Now their business models will be put to the test, and a bloodletting of startups may be on the way.
Both they and the new crop of micro-cap funds actively pursued seed and early stage opportunities in 2010. They funded scores of companies, including many in the Internet space, where shoestring startup costs make business plan experimentation relatively painless.
Over the next year or so, many of the young businesses will need new money. The question awaiting them is will they get it? And if not, what are the alternatives?
“It will be a very interesting test case” of how these investors manage their portfolios, said Michael Kim, managing partner at Cendana Capital, a fund that places money with seed and micro-cap funds.