Angelstreet.com has packed up its bags and gone home.
The online investment bank and consortium of angel investors closed its Newport Beach office at the end of the year and consolidated its operations at its Chicago office.
“It wasn’t producing,” said Louis Lichtenfeld, Angelstreet’s founder and chairman. The start-up firm suffered from a slump in the market and the lack of the right people in place, Lichtenfeld said.
When the company’s Web site went live in the summer, Lichtenfeld said he had a dozen deals lined up and that once the operation got rolling he was expecting to do three or four deals per month. The firm was banking on the hope that angel investors across the nation would want to use the Web site to shop for deals and provide capital.
But the firm was blindsided, like most investment firms, by the tumble in the equity markets. A similar site, Garage.com, was planning to go public last year, but yanked its plans after the market tanked.
Angelstreet had enough investors,290 angels and about 50 institutional investors,but it could not find and complete enough deals. The firm has done three deals so far, none of them through the Web site.
With little revenue coming in, the Angelstreet office here became unprofitable to maintain.
“We didn’t have enough capital to support all the activities,” Lichtenfeld said.
A source familiar with the company said the firm could not get a second round of funding to continue its operations.
The company received about $1 million in funding in 1999 from Lichtenfeld, two individual investors and Centennial Venture Partners, a Raleigh N.C.-based venture firm.
The firm laid off seven employees in the Newport Beach office. It also closed its Raleigh and New York offices. But Lichtenfeld says he is not throwing in the towel. He and two other employees are operating in Chicago and are looking at new deals.
“We are re-grilling and are getting new capital. We have a list of deals,” Lichtenfeld said. “We built channels in Europe and it has been beneficial.”
Lichtenfeld said he is looking to hire five more investment bankers by March. n
