Since we last met in San Diego last year, John Huston, Angel Capital Association Chairman, says he's lost money, both in the public markets and private. His stunning admission helped to break the ice and recognize the present economic scenario angel investors find themselves in.

Executive Director Marianne Hudson reports the actual statistics; most interestingly, angels plan to invest more in existing portfolio companies this year compared to last and co-investing with other angels and groups is the single most popular outcome from the ACA survey. These stats reflect the current realities. For many, the best investment angels may see this year will be keeping their existing portfolio companies alive. And since so many of us have lost large chunks of our personal net worth, it's gonna take a lot more syndication to generate the capital that startups require. Fortunately, there's been a lot of research going on in how to make co-investing work.

"The checks are smaller, the checks are fewer, sponsorships are cut by half," Blue Tree Allied Angels' Catherine Mott on the panel on the economy reports.

"Recruiting new members, raising smaller rounds and being tough guys on valuations," Alliance of Angels' Dan Rosen says his angel group in Seattle has fared ok in the economy, "we weren't hurt that bad". John May likes the fund model versus the dues model, "I think I'll just hold off" is what he's hearing from some pledge group angels that don't operate a fund. The biggest problem is exits, "the M&A, IPO markets are terrible". "Begin with the end in mind," Mott advises. "The worst case scenario is now the base case," May suggests that finding subsequent rounds will continue to be challenging.

Rosen predicts more pay to play imposed by angels on earlier stage angels, "they're gonna get more aggressive".

What about pay to play deals? Not all of them are worth investing in, but with the collegial nature of many angel groups, how do we be more effective at saying no? Rosen simply says, "no," triage is the order of the day, we've got to evaluate each new raise on its merits. Mott advises, "talk about it before it happens; you know they're coming, so begin the dialog before the emotional issues of the moment".