A Date With An Angel

Since Nasdaq's April plunge, angel investors have become a lot more careful about where they put their cash. Frontier asked David Gerhardt, head of angel group The Capital Network, for some funding advice in these more demanding times.

What's important to investors now that didn't matter eight months ago?

Customer verification. Entrepreneurs need to really talk to customers or potential customers. They need to get a sense that customers will buy their product and pay enough for it.

Have expectations changed about time frame and return?

Angels start to get excited nowadays when they see a 5-to-10-times return over three to five years. Before, the window was just 18 months to two years.

Which industries do investors like?

There's more interest in health sciences. It was hot 10 years ago, then the bubble popped. Now, it's back. That's the cycle. Maybe next week it will be wireless.

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