Angel Investors Moving Upmarket

Plus: Personal Internet use on the job; business owners retain the old-media habit; celebrating entrepreneurship again

Angel Investors Look to Established Companies

While these groups of individual investors tend to invest in startups, a fast-growing number are investing in existing companies requiring additional capital, according to the latest survey of angel investors, conducted by the University of New Hampshire's Center for Venture Research. Such investments now account for 40% of the $25.6 billion of angel investments made in 51,000 ventures last year, and the center says this trend "that began in 2003 and represents a 10% increase in historical levels…has in turn resulted in fewer dollars available for seed investments." (Click here to read a summary of the findings.)

Surfing on the Job

All that online shopping, monitoring of sporting events, and other non-work-related Internet usage costs the average 100-employee company about $100,000 annually in lost productivity, says Matthew Sonfield, a professor at Hofstra University, in a research paper. In addition, there are "potential legal liabilities or negative publicity—along with exposure to viruses and a burden on IT costs for bandwidth, leased lines, storage, and printers.

Yet "non-business Internet use can also be viewed as a constructive use of recreation within the workplace, offering relief from constant work responsibilities"—something once referred to as "banana time," Sonfield says.

Sonfield thinks Web-filtering software may "provide the best solution to this dilemma" by enabling "management to decide what types and amounts of Internet usage each employee may engage in." He cites the example of Kozy Shack, a 400-employee food company, which uses such software, customized to allow each employee (except four members of top management) an hour a day of "responsible" personal Internet usage, preferably during breaks, lunch, and before or after work. Online gambling, stock trading, and porn sites are prohibited. The software periodically generates for management a "top 10" list of employees using company computers for personal business. "These employees are then talked to by human resources personnel," he says. (Click here to read the full paper.)

Where Old-Time Media Still Holds Sway

In a survey of 314 owners of small businesses, more than 80% rated newspapers, magazines, and e-mail newsletters as important or very important sources for managing their companies. In contrast, only 40% rated listservs, Webcasts, and podcasts as important or very important, and 34% rated blogs the same way. The survey was conducted earlier this year by Bredin Business Information, a consulting firm specializing in small business.

In Case You Missed the First Entrepreneurship Week…

National Entrepreneurship Week was celebrated by various organizations around the country in late February (see BusinessWeek.com, 2/22/07, "A Weeklong Festival for Entrepreneurship"). But another week devoted to promoting entrepreneurial activity is scheduled to begin Apr. 23 in Philadelphia. It will include a business plan contest at the University of Pennsylvania's Wharton School, a networking event, a course in starting a business, and a panel discussion by successful entrepreneurs. (Click here for more information.)