Oct. 6, 2005--A study released Wednesday showed that the angel investment market for the first half of 2005 was steady and robust, but signs of instability loom.

According to a report from the Center for Venture Research, total angel investments for the first two quarters of the year came to $11 billion, slightly less than the $12.4 billion invested during the same time last year, but on target to match last year's $22.4 billion total.

"The market is strong and steady," said Jeffery Sohl, the director of the CVR at the University of New Hampshire.

Some 26,000 entrepreneurial endeavors received angel funds in the first two quarters of 2005. Angel financing is still the largest source of seed and start-up funds, with 48% of the first-half angel investments going to the start-up and seed companies. However, it is shrinking, dropping 11% from the first two quarters of 2004.

"Seed funding is where angel investors are at their best. Both for themselves and the economy," Sohl said. "The more they get into later phases, the more they get away from where they're needed."

Sohl also pointed to the 23.3% yield rate for the first half of the year as a reason for slight concern.

"This is by no means definitive, but it raises concerns that angels may be getting a little too trigger-happy or there may be a lot of inexperienced angels making investments," he said. "It can also mean that those applying are getting better at writing proposals. We'll just have to keep an eye on the next couple of quarters -- I prefer to see the approval rate around 10% to 15%."

Life sciences led the way as the most popular sector for funding, (20%) followed by biotech, (17.5%) software, (17%) and IT services (13%).

Sohl also highlighted that the overall numbers were strong and expected them to remain sturdy throughout the year. However, he also solidified his concern with the fact that 66% of membership in angel groups remained latent during the first half of the year - up significantly from 48% last year.