Angel investors - rich individuals who back business start-ups - were active in the second half of last year but were keener on supporting existing companies than they were on stumping up cash for new ventures, the NZ Venture Investment Fund (NZVIF) said.
NZVIF, which administers venture capital and seed co-investment programmes for the Government, said "angels" made 97 investments in young, high-growth companies, slightly behind the previous year's record activity level, but the amount invested was $30.7 million - about half the amount invested in 2010.
The fall in the level of investment was more pronounced in the second half of last year, when angels invested $13.1m, the lowest total since the NZVIF's Young Company Finance Index began collecting data in 2006.
However, the 44 deals undertaken in the second half was the second highest recorded.
NZVIF chief executive Franceska Banga said the trend of angels investing smaller amounts, in both new and follow-on investment, was indicative of a maturing of a New Zealand angel market and was consistent with similar trends overseas.
"Angels are learning more about how much and when to invest.," she said.
Angels' portfolios of new investments grew steadily between 2008 and 2010, in particular.
"A significant number of the most active angel investors are shifting their main focus to supporting their existing companies," she said in a statement.
This was a rational response to the recognition by angels that companies required follow-on funding, and a lack of material follow-on money from other sources in New Zealand.
"The trends we are seeing in angel investing highlights the need for later stage funds - venture capital funds - to provide the larger investment capital to develop the companies which angel investors have been backing," Banga said.
Angel investors have cumulatively invested $220m into high-growth companies since 2006, in an average deal size of $540,000. The average deal size in 2011 was $323,549.
Of the $30.7m invested last year, $11.7m was into first round investments and $19.0m comprised follow-on investments in existing companies.
In terms of the stage of investment, $6.6m was seed investment, $23.8m was at the start-up stage, $360,000 at the early expansion level, and nil at the expansion stage, NZVIF said.