Nationally, the number of angel deals being made, but fewer dollars for each deal are being doled out. Total angel investments last year amounted to $26 billion, a 1.8 percent increase from the year before, according to the Center for Venture Research at the University of New Hampshire. However, 57,120 entrepreneurs received angel funding last year, a 12 percent increase from the previous year.

Collectively, angel investors and venture capitalists have long distributed the same amount of money into their deal split in two but with angel funds being significantly smaller in value, many more entrepreneurs are seeking those kinds of investments, said Stephanie Hanbury-Brown, chief executive officer of Golden Seeds, a group that supports female entrepreneurs and has offices in New York, Boston and Philadelphia.

"It's a big funnel we all have," said Hanbury-Brown, whose organization meets regularly with Connecticut investors. Angel investors "are in a position to say no a lot."

The risks are significantly larger in angel deals, because it's harder to gauge the long-term prospects of a company during its startup phase, Hanson said.

"Anyone who thinks this is easy is a fool," he said. "Six out of 10 companies that are invested in are going to fail."

With angel deals such a gamble, it's up to the players within each state to help facilitate deals, industry observers said.

Anecdotally, investors say Connecticut may lag behind some states in generating angel deals because it lacks financial incentives like tax breaks.

A bill has been proposed in the state legislature this year that would provide angel investors with tax breaks as big as 25 percent for making deals with Connecticut businesses.

If the bill is passed, it would make Connecticut more competitive with neighboring states that have been using tax breaks for years to attract investors, said Liddy Karter, head of Karter Capital Group in Old Lyme, and founder of the Angel Investor Forum, a group that meets around the state, including monthly in Westport.

"If you don't have that first round of capital, (entrepreneurs) will go somewhere else," Karter said. "They're going to the meccas, like Silicon Valley and Boston."

Rhode Island provides tax credits as high as 50 percent to angel investors. New York gives 20 percent tax breaks, and Maine provides 60 percent, Karter said.

It's inexplicable for Connecticut to lag behind, she said.

"This is the land of CEOs, she said."

One of the lawmakers backing the proposal is state Rep. Chris Perone, D-Norwalk, who submitted a bill that would provide tax breaks to angel investors in the field of nanotechnology.

Lawmakers are realizing it's easier for more established businesses to receive money from venture capitalists than it is for startups to receive angel funds, Perone said.

So the state must do what it can to facilitate deals and strengthen its economy, he said.

"We have to be more diverse in how we approach business creation and job creation in the state," Perone said.

The state Department of Economic and Community Development supports the tax credits as long as they're "done in the context of the overall budget," Commissioner Joan McDonald said. "It is one of the things being evaluated right now."

To facilitate deal making, investors and entrepreneurs must continue to network, Karter said.

When the Angel Investors Forum formed in 2004, it was the first group of its kind in Connecticut, compared with about 20 angel groups in Massachusetts, Karter said.

"Until we had an organized group, there wasn't anyone to talk to," Karter said. "Everything was very pocketed and individualistic."

Another group that's helping bring investors and businesses together is East Hartford-based Connecticut Innovations, an organization that was established by the legislature more than 10 years ago. CI provides funding to some entrepreneurs, and helps businesses connect with investor groups in the state.

Like Karter, CI officials see a benefit in a group of investors getting together each month.

"The angels are now beginning to see the benefit of collaborating with other angels," said Charles Moret, managing director for business development at CI.

One business that recently benefited from an angel investment is XLerant in Stamford, which has designed a software package for budgeting.

In January, the company received $850,000 from CI, a much needed boost that will help the business grow its sales and marketing capabilities, XLerant founder and Chief Executive Officer Lawrence Serven said.

Angel funds help companies who aren't ready for millions of dollars from venture capitalists, but still need more money than they can collect from friends and family, Serven said.

"When you have some customers, but not necessarily hundreds, you're sort of in between," he added.

Some are confident that the work being done in Hartford, coupled with the networking efforts of the state's angel groups, will help more entrepreneurs like Serven get out of that in-between stage.

"There's big money in Fairfield County," Sturges said. "The biggest problem is there isn't enough dollars going into that stage compared with the amount of work you have to put into it."

But given the opportunities in Connecticut, the hard work has a payoff, Karter said.

"When you consider the types of companies we've seen in Georgia," she said, "we see a much broader array of companies here. There's aviation, nanotechnology, medical devices. We have the diversity here."