We're seeing a glut of capital at the seed investment stage, which means higher prices for all and more competition for hotter deals. This means that a lot of angels are getting forced out of a lot of deals they might have been in before, or have to enter a deal through a syndicate and take a 20-30% haircut on the carry.
On the other hand, we're seeing good startups getting funded now because of the excess capital -- startups that might have had a hard time raising because they didn't have the right cachet with the investor network and didn't hit the right milestones to make investment an easy case. A $25k investment today is going to be more expensive or more risky than a $25k investment a year ago.
The increase in startups coming down the pipe is a good thing for traditional VCs. More startups are going to pass the series A hurdles and find their way into the VC pipeline. The VCs will end up with a larger crop to select winners from.
If you don't have good dealflow as an angel right now, I'd say that it's a good time to sit out from the startup scene and become an LP in a fund or two instead.
Alternatively -- I'm biased here, admittedly -- US angels should take advantage of the strength of the US dollar and find some early-stage deals north of the border up here in Canada before AngelList opens up Canadian syndicates and the seed valuations rise up to meet the US valuations.