Until the mid 1990s, entrepreneurs seeking angel investors had to find investors one at a time or in small groups. Although some informal groups of investors had formed around the country, there were no groups that founders could approach for investments until the launch of Band of Angels in Silicon Valley later in the decade.
During this period, moreover, venture capital firms were making fewer seed stage investments, and focusing instead on larger investments in businesses that had already gone through the start-up phase. Entrepreneurs found it harder to attract venture capital, leaving them almost totally dependent upon friends, family, and angel investors. In addition, companies had to raise more money because the minimum threshold for venture capital investing had increased to $3 million to $5 million.