What Credit Crunch? Internet Angels Fill Gap

"The Sequoia Capitals of the world aren't looking at John Doe, who wants to build a small golf resort on the outskirts of Kentucky," he says.

The challenge for entrepreneurs, however, is to not get lost in the shuffle. RaiseCapital.com recently listed nearly 3,700 investment opportunities, while FundingUniverse boasts more than 6,000 business plans for potential investors to review. The key, says Singer, is to take the process seriously. Typo-riddled company descriptions, for example, will quickly get passed over by investors in search of the next big hit. But even with a solid plan and a slick presentation, there's no guarantee that investors will bite.

"You can lead a horse to water, but you can't make it drink," says Singer, who adds that "there are more great ideas out there than dollars."

Still, deals do get made. Turo regularly trolls the offerings on RaiseCapital.com (his firm is a sponsor of the site), FundingUniverse and Go BIG Network, and has made a "handful" of recent investments in companies he dug up on those sites. He says Growthink has funded ventures including a watch-repair company, a health-care IT company and a medical-device maker, offering funding of less than $500,000 in each deal.

In these Web sites, Turo sees big upside for both parties in the fund-raising relationship. "If you look at the power of making connections over the Internet, this is a natural kind of endgame," he says. "It takes the very byzantine, inefficient process of fund-raising and brings some efficiencies to it. Buyers and sellers come together in a frictionless environment."