Angel investors backed fewer startups this year, though they provided more cash per deal, the Angel Capital Association reported Friday.

Excluding deals struck in December, angel groups  made an average of 6.1 investments in 2008, down 16 percent from last year, the Kansas City, Mo.-based trade group said.

At the same time, the average size of investments rose by six percent to $208,936. Despite the gain, total funding per angel group dropped to $1.72 million, from $1.94 million in 2007.

Investors blamed the downturn  on market uncertainties, along with the need to reserve extra capital for portfolio companies. Among other issues, many are concerned with managing current cash and expenditures, or obtaining the next round of financing as venture capital dries up, the report said.

"Clearly, the economy is having an impact on what angel groups will do to fund startups," John O. Huston, the trade group's chairman, said in a statement.

Huston said many angel groups are optimistic about an upturn in activity next year as a result of lower company valuations, and more investment opportunities in green technologies, healthcare, mobile media and renewable energy.

The report was based on a survey of the trade group's 165 members. About two thirds of its member groups responded to the survey.