Five Angel Investing Trends for 2007

However, online lenders and nontraditional person-to-person lenders have developed some genuinely unique options for entrepreneurs with poor credit as I described in a recent column. And while the cost of capital continues to be higher for borrowers with no credit or low credit even with these new options, the accessibility of credit options has never been easier.

But perhaps a more critical problem is the lack of patient capital (funding from people who don't expect short-term liquidity from their investment) and long-term financing options for entrepreneurs with subprime credit. Paying interest rates exceeding 20% on loans becomes unsustainable if your business can't generate 20% earnings growth.

For most start-ups, this is a pipe dream in the short-term (two to three years) but seems more plausible over the long-term (four to six years) after the business is established. In my view, patient capital is one of the most important financing needs for start-ups and among the hardest to find. Unfortunately, I don't see this trend changing anytime soon.