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In tough economy angel investors still itching to help startups

By Andrew Moran     Jan 23, 2013 in Business
Chicago - In this tough economy, there are still venture capitalists and investors looking to spend a portion of their money on the next big startup. Trying to connect an entrepreneur and an investor can be quite a difficult step.
Since Facebook’s sluggish initial public offering (IPO) last spring, angel investors – wealthy individuals that use their own money to invest in these startups – have been rather fastidious about investing in the next big Internet startup company. Prior to the social network juggernaut’s IPO, investors were avid in pouring their money, sometimes millions of dollars, into any firm that had the potential for rapid growth.
Eagerness to spend money on e-commerce startups, organizations that depend solely on Facebook, Twitter and LinkedIn for their clientele and now companies that are shifting toward smartphones has eroded – smartphones because it is difficult to monetize.
According to a report from CB Insights, younger startups are starting to feel the effects. The report found that more than 1,000 startups that attracted seed money from these angel investors will be “orphaned” this year when investors reject their pleas for additional funds. This means approximately $1 billion will be eviscerated from the market.
However, the same study found that the number of startups receiving seed funding, which is usually less than $1.5 million, actually increased 65 percent in 2012. Analysts suggest that this a sign that the recession’s decline on funding new startups is ending.
In order to connect business owners, investors, dealmakers and service providers across the globe, a new website was launched earlier this month that establishes a network that aims to be the “best friend in deal making.”
Fundology, a new “investment professional deal network,” helps investment professionals search for capital raising and M&A actions. It unites investors and business owners by applying highly appropriate search results and an enhanced invitation structure to hasten deal detection by making things easier when it comes to conventional workflows and accelerating communication.
The Chicago-based company was founded in 2012 by Kison Patel. It was previously known as FIEXE, but it will remain as an umbrella for personalized technology products developed by the company.
“The private investment market is fragmented with limited networking opportunities, and current deal platforms use difficult, archaic technologies,” stated Patel, Fundology president, in a blog post. “Our goal is to accelerate the pace of the deal discovery and execution process in an effort to provide tools that make the private investment process more efficient.”
It is compromised of two investment markets: equity and debt. The equity is for business owners who can distribute shares to generate capital or for liquidity in private companies, including mergers and acquisitions, angel and venture capital and funds. The debt platform supports the sale of a variety of debt-related assets and notes, such as mortgage-backed securities, finance requests, notes and mortgages and others.
“Fundology brings the focus back to our ‘basic chemistry’ by promoting greater user interaction while better representing this evolving platform,” explained Patel in a press release. “Fundology provides a single brand name that unites our feature newsletter with our platform and other services. It will make it easier for users to fully access everything we have to offer. We’re pleased with this exciting rebranding initiative and look forward to bringing our clients new tools to increase their productivity and ultimately close more deals! Plus it’s a lot easier to pronounce.”
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