Angel investors kept a tighter grip on their wallets in 2008 when it came to deal size but actually made substantially more deals, according to the from the Angel Capital Association.

As the economy slowed last year, angel groups reduced the average amount each invested to $1.765 million, down some 10 percent from the $1.94 million average the previous year.

However, the number of deals per group increased sharply to 6.28 for the year vs. 4.5 in 2007. ACA membership includes 162 groups which include more than 7,000 accredited investors.

Just as in , exits for most angels – through a merger and acquisition, an initial public offering or some other means of cashing out – remained rare. Nearly 77 percent reported no “positive” exits compared to 75 percent in 2007.

The investment outlook isn’t entirely negative for 2009, however. Nearly 54 percent of the angel groups in the survey said they expect that deals made and dollars invested will remain the same or increase. (For comments, see )

“Heightened selectivity by angels and venture capitalists has clearly amplified the financing challenge young ventures are facing today, even at collapsed valuations,” said ACA Chairman John Huston. “However, highly capital efficient start-ups that can reach cash flow break even with just a few million dollars of investment are having no trouble attracting capital.”

Angels remain generally optimistic about the “deal flow” they expect to see this year. Some 43 percent say quantity and quality of deals will increase while only 6.2 percent expect a drop in numbers and quality.

Some other questions in the survey show angel group’s attitudes remain relatively stable.

For example, 43.1 percent say the quantity and quality of deals increased last year, down from 45.8 percent the previous year. Another 27.7 percent said deal flow and quality remained the same, virtually identical to the 2007 result of 27.8.

The angels were most pessimistic about the number of investments and dollars invested in 2009. Some 40 percent said the deal numbers and dollars will decline, compared to 2.7 percent in 2007.

Meanwhile, 30.7 percent predicted increases this year, down from 54.8 percent a year ago.

In a statement, Huston, who is manager of the Ohio TechAngel Funds in Columbus, Ohio, noted that many angels remain optimistic.

“Our member angels have prospered through other downturns, but mentoring portfolio entrepreneurs has never been more essential to their success,” he said. “Over 30 percent of ACA’s member groups foresee increasing both the number and dollar amount of their investments this year, reflecting their confidence that this market will produce many lucrative exits in the future.”

The ACA also noted that one third of those surveyed plan to increase their ranks.

The association also reported that “ACA is aware of several new groups that were established in late 2008 and early 2009. Many of the groups that predict more investment see opportunities in reduced valuations for companies, in sectors such as clean tech and healthcare, and in capital efficient companies.”