A dose of reality may be hitting angel investing.
After valuations for young companies seeking funding soared to five-year highs last year, some angel investors—or wealthy individuals who buy stakes in startups—are starting to pull back.
On AngelList, a crowdfunding site aimed at such investors, the average valuation for a company receiving funding reached $4.9 million for two quarters last year, its highest level in five years. But valuations dropped to $4.2 million in the fourth quarter, the lowest level since early 2012. Dow Jones VentureSource data shows that deals involving angel investors fell by 16% last year.
