Angel funding coming back?

I went to SDForum's VC SIG tonight to hear an angel investor panel discussion on the climate for angel investment. The general consensus was that the angel community is slowly but surely moving out of the "fear" mode it has been in since the bubble burst and earlier angel rounds were getting "crammed down" when VC's came in on down rounds. Interestingly, the angel deals that have been getting done during the downturn have consisted of larger groups investing smaller amounts ($5-25k each).

But the bottom line is deal flow is supposedly picking up, and investments are getting done, mostly in the $1M-$3M pre-money valuation for prototype to nascent revenue companies (the panel admitted it's hard to generalize valuation). And the key to determining whether to fund the company: whether a VC will follow after new milestones are hit. The event was standing-room only and well run -- I look forward to going back again next month.