“I think where your citation may be misleading is that while there was a 6% increase in total firms funded, this was due to follow on funding events, not more seed stage funding, the traditional focus of Angel investing.”

Please take a look at “A Change in Focus” section.

I draw three conclusions from Sohl's report for the first half of 2009:

1. Total Angel investing is 27% down year over year (1H09 / 1H08)
2. 19% less Angel money flowed into seed stage deals
3. Fewer seed stage deals were done by Angels (no % supplied, characterized as “a slight decline.”)

Now, as a percentage of total Angel investment, more money flowed into later stage deals than normal, which I would speculate is Angels providing additional capital to firms that could not find VC support. I think where your citation may be misleading is that while there was a 6% increase in total firms funded, this was due to follow on funding events, not more seed stage funding, the traditional focus of Angel investing.

Sohl reaches what I find to be a contradictory conclusion: “The decline in deal size of 31 percent from the first half of 2008 indicates that while angels have not significantly decreased their investment activity, they are committing less dollars resulting from lower valuations and a cautious approach to investing.” If they are shifting to more follow on investments and overall investing less then to my perspective they have decreased their traditional investment activity in seed stage funding.