The angel investor market in the first two quarters of this year showed signs of steady recovery since a downturn in the second half of 2008 and the first half of 2009, with total investments at $9.2 billion, an increase of 3.1 percent over the same period in 2011, according to the Center for Venture Research at the University of New Hampshire.

A total of 27,280 entrepreneurial ventures received angel funding during the first half of 2012, a 3.7 percent increase from the same period in 2011, and the number of active investors in the first half was 131,145 individuals, a 5 percent increase from the year-earlier period, the data show. The increase in total dollars and the matching increase in total investments resulted in an average deal size of $336,390 in the first half of 2012, down slightly from $338,400 in the year-earlier period.

"These data indicate that angels remain major players in this investment class and at valuations similar to the first and second quarters of 2011," says Jeffrey Sohl, director of the UNH Center for Venture Research at the Whittemore School of Business and Economics.

"While the market exhibited a stabilization from the first and second quarters of 2011, when compared to the market correction that occurred in 2008, these data indicate that the angel market has demonstrated a steady recovery since 2008," Sohl says.

Angels continued their appetite for seed and startup stage investing, with 40 percent of first-half angel investments in the seed and startup stage, which is virtually unchanged from the 39 percent in the like period last year.

There was, however, a shift to expansion-stage financing, which comprised 22 percent of investments in the first half of 2012, up from 13 percent in the year-earlier period, indicating that angels are positioning their investments for exits in the coming year.

New "first-sequence" investments represent the balance of first half 2012 angel activity.

"Historically, angels have been the major source of seed and startup capital for entrepreneurs, and while this stabilization in seed and startup investing is an encouraging sign, it remains below the pre-2008 peak of 55 percent, signifying that there remains a need for seed and startup capital for both new venture formation and job creation," Sohl says.

Health care services/medical devices and equipment accounted for the largest share of investments, with 24 percent of total angel investments in the first half, followed by software (14 percent), biotech (12 percent), retail (10 percent), information-technology services (7 percent), and media (6 percent).

"Retail and media have solidified their presence in the top six sectors, mainly due to investing in social networking ventures," Sohl says.

Angel investments continue to be a significant contributor to job growth, with the creation of 106,400 new jobs in the United States in the first half of 2012, or 3.9 jobs per angel investment.