The angel investor market in the first half of this year showed signs of stabilization since the 30 percent market correction in the second half of 2008 and the first half of 2009, with total investments totaling $8.9 billion, according to the Center for Venture Research at the University of New Hampshire. That represented an increase of 4.7 percent over the same period in 2010, the center said.

A total of 26,300 entrepreneurial ventures received angel funding during the first half of 2011, a 4.4 percent increase from the same period in 2010, and the number of active investors in the first two quarters of the year was 124,900 individuals, virtually unchanged from the year-earlier period. The increase in total dollars and the matching increase in total investments resulted in an average deal size of $338,400 in the first half of 2011, comparable to the deal size in the same period in 2010 of $337,300.

"These data indicate that angels remain committed to this investment class and at slightly higher valuations than in 2010. While the market exhibited a stabilization from Q1 and Q2 2010, when compared to the market correction that occurred in 2008, these data indicate that the angel market appears to have reached its nadir in 2009 and has since demonstrated a slow recovery," says Jeffrey Sohl, director of the UNH Center for Venture Research at the Whittemore School of Business and Economics.

Angels have significantly increased their penchant for seed and start-up stage investing, with 39 percent of first-half angel investments in the seed and start-up stage, marking a 13 percent increase in that stage from the year-earlier period. This increase was reflected in a decrease in post-seed/start-up investing, with 60 percent of investments in early and expansion stage, compared to 70 percent in the first half of 2010. New, first-sequence investments represent 49 percent of the first half's angel activity, an increase of 3 percent from the same period in 2010.

"Historically, angels have been the major source of seed and start-up capital for entrepreneurs, and this return to seed and start-up investing is an encouraging sign. While there remains a need for seed and start-up capital and a capital gap in this stage, if the return to seed and start-up investing continues, this will signify an improvement in both new venture formation and job creation," Sohl says.