Over the past year several areas of potential financing for entrepreneurs have experienced dramatic changes, while others will still invest at nearly the same terms as in the past.  A broad overview of what has been seen in the market includes:

Friends and Family Money:

In some respects this source of funds has seen the smallest changes in the economic downturn.  If a friend or family member would have invested in your company in the past, they may still do so today.  The largest reason a potential investor may change is that their personal situation may have changed - if their retirement funds have been cut in half, so may have their ability to invest in a start-up.

Angels:

Angel investing has seen the largest drop off in the recent few months, due to a number of reasons including:

Drops in wealth held by individual angels.

A move towards different investing strategies (potentially joining an         angel fund).

Preserving cash to be used for past investments (to ensure that their other investments survive).

An overall move away from risky personal investing.

Angel Funds:

Over the past five to ten years, there has been a number of angel funds created (a fund where a number of individual angels pull their resources and investment decisions go through an overall group decision process).  This move has further increased due to a number of individual angels have become more reluctant to go it alone.  Angel Funds appear to be falling into two general categories right now regarding making new investments; those that do, and those that want to ration their resources to preserve current investments. An easy way to find angel funds still making investments is to research funds which are still fundraising - if the Angel Group is raising another fund, they will want to invest it somewhere.

Venture Capital:

Traditional Venture Capital funds are still investing (if they are still in existence - a number of VCs have closed up shop over the past year), although many have changed their risk profile.  Many VCs understand that a liquidity event (either sale or IPO) is most likely several years away for any new investments and they now look for a Company to be able to reach cash flow positive and grow on its own at some point in time.

Banks:

In the past, an entrepreneur could go to a bank and potentially receive a line of credit (assuming adequate collateral and creditworthiness) to fund operations while their company grows.  Today, banks will really only look at a credit line if a Company is making adequate cash flow to repay the line, leaving out companies which do not yet have a track record of being cash flow positive.