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As a reasonably successful entrepreneur, i frequently get lunch invitations from extraordinarily bright and energetic startup founders who seek my advice (for whatever that’s worth) and, inevitably, my money as a private individual or “angel” investor. I rarely say no to lunch (even though I’m buying), rarely say yes to investing, but I always find the stories fascinating.

I’m fairly certain that a would-be angel investor has better odds of making a killing by taking his or her $50,000 to a Vegas roulette table and smacking it all down on 22. Yet over countless lunches between friends, family, coworkers, roommates, and friends and family of all the above, tens of millions in angel money are invested each year, providing vital cash to embryonic startup companies around the globe.

The scudding economy has made the angel’s role even more critical. With few exceptions, conventional venture capital firms are still reeling from the high-tech/dot-com implosion. Venture capital funds continue to plough money into life support for their existing portfolios of bad investments in the hopes (most likely vain) that the economy will rapidly recover and their companies can claw their way toward profitability. The venture capitalists that still have money to spend on new investments have gotten gun shy and are staying well clear of seed-stage startups in favor of more mature, revenue-producing operations.

Jon Flint, a managing general partner of Waltham, MA-based Polaris Ventures, which is one of the more successful East Coast venture capital firms, once opined to me that “like great artistic talent, the number of excellent, investable startups that emerge each year is a constant.” By that principle, the current drought in seed-stage investing is just as irrational as the venture-financing exuberance of the late 1990s. Almost by definition, the next eBay or Microsoft must be out there, overlooked or ignored by the venture capitalists.

Unfortunately, just picking a winner is only the first trial in a gauntlet of trouble that waits for angels. As further investments come in, the angel’s share in the company (and thus of future rewards) can be diluted right out of the water by more aggressive and savvy professional investors. An angel whose initial ownership is 10 percent of a company might wind up, three years down the road, owning less than 1 percent-without oversight of or influence on the management decisions in between. And while the goodwill and financial incentives of a company’s founders are critical to its success, later funders care little about what happens to the angel’s stake.

So why do it at all? Why bet in a casino that takes your money but makes you wait outside while the game is played? I think the answer is that angel investments are decisions of the heart, driven by passion rather than clinical assessments of risk and return. An entrepreneur tells a story about what just might be and kindles the investor’s sympathy for a group of people, their ideas, and their vision of changing the world. And if in the process, as occasionally happens, an angel can turn the price of a golf cart into the price of a Gulfstream, what could be better?

In each of my columns, I will be featuring a different startup that is looking for private investment, considering the company not just from the gee-whiz technology angle, but also from the perspective of a would-be angel. For obvious ethical reasons, I have no financial interests in any of the firms I’ll be writing about, and I am not endorsing them as investments in any way. Rather, I’ll be selecting the stories of people who have unique and fascinating pictures in their minds of how the future might be different, if only their companies can succeed.

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