"American Express is a 162 year old company that has continuously reinvented itself," said Dan Schulman, Group President, Enterprise Growth, American Express. "As we enter the next chapter in our history, we recognize the need to work with emerging technology companies to inspire change, encourage innovation, and ultimately deliver the best products and services to our customers."

AmEx made a big investment in social advertiser Clickable last month. The Next Web also pointed to partnerships with early stage NYC startups like Percolate, Veri and Kohort.

The credit card company joins BMW, who earlier this year established a major presence in Silicon Alley with its iVentures, as a major corporation looking to the world of venture capital in order to stay sharp.

Data via CB Insights

At the beginning of August, Betabeat began talking about a coming crunch for seed stage companies in New York. We believe that the bubble in early stage financing had peaked, and that in the coming months, many young startups would find it hard to raise follow-on cash.

At the time, local investors like Chris Dixon and Shai Goldman argued that this wasn't some dire turn of events, but simply the natural cycle of venture capital funding playing out. But the drumbeat of seed stage slaughter now seems to have made its way to the mainstream press.

The Wall Street Journal ran a story yesterday, "Web Startups Hit Cash Crunch," which claimed that valuations for these early stage companies had fallen by as much as half in recent months and the venture capital funding was at an all time low. AngelList's Naval Ravikant said that startup financing is getting weaker by the week and that the survival rate for young companies is dropping fast.

But new data from CB Insights, a venture capital database here in New York, disputes that outlook. Their quarterly report shows a record number of seed stage deals over the last quarter and a steady growth in overall venture deal flow and funding since 2009.

Peek Behind The Curtain of VC Funding With Our First Original Web – The Pitch

Data from CB Insights

As Fred Wilson says: "So, is there a 'cash crunch' for web startups? Not that we are seeing. Our portfolio companies have all been able to finance themselves when they have wanted to. And we have made more investments this year than any year we've been in business (maybe 10-20% more, not 2x more)."

The Journal seems to be trying a little too hard to make their case. At one point the story declares, "Between Jan. 1, 2009, and late last month, U.S. venture-capital firms raised $39.2 billion, down 76% from the $162.5 billion that was raised between Jan. 1, 1998, and Dec. 21, 2000, according to VentureSource."

The fact that venture funding is at much saner levels now than it was during the dot-com boom is a good thing. Nobody in the industry wants to see a repeat of the crash that followed those heady times. Saying we're in a cash crunch now because the number don't stack up to the 90s is like bemoaning the absence of Bernie Madoffs among today's money managers.

What is happening now is the inevitable outcome of the early stage funding boom of the last few years. A lot of young companies are experiencing flat-to-down rounds, which is why valuations seem to be returning to a sane level. And the Cambrian explosion of mobile, local and social startups is being culled a bit. A number of older VC funds are struggling, meaning the amount of new funding being raised may drop off.

But the amount of money being invested, the number of deals being done and the flood of young entrepreneurs eager to get into the game has not slowed at all. And that's a very good thing.

P.S.--Be sure to check out CB Insights' data, which notes that New York is now far and away the no. 2 spot for tech venture after the Valley, pulling farther ahead of Boston in several categories.

Ben Lerer

Lerer Ventures is a seed stage venture capital fund based in New York. They invest in founders at the earliest stages of a startup's life. Everyone at the fund starts and runs companies for a living. Lerer Ventures is where they invest in their peers.

The firm was founded by father-and-son team Ken and Ben Lerer.

Ben Lerer is a manager of Lerer Ventures and the co-founder and CEO of Thrillist.com. Kenneth Lerer is a manager of Lerer Ventures. He was the chairman and co-founder of The Huffington Post and is currently the chairman of Betaworks, Bedrocket and Buzzfeed.

Jordan Cooper is a Venture Partner at Lerer Ventures. He currently serves as co-founder and CEO of Hyperpublic. Jordan was previously an investor at General Catalyst Partners, a $1.7 billion early stage venture capital firm in Harvard Square.

I pity your technical co-founder!

Betabeat is looking to find the best young startups in New York for a new web series we're producing called Elevator Pitch, which is being sponsored by FedEx.

The premise is simple: we'll profile a group of great startups and give each of them a chance to sit down and pitch Lerer Ventures.

There are two possible outcomes for the best companies:

A cash prize so you can stop eating ramen and finally afford some decent internet in your apartment.

An investment from Lerer Ventures, one of the top VC funds in the city.

If you think you've got a great young company (pre-series A) and are interested in being part of Elevator Pitch, send an email to bpopper (at] observer.com and we'll set up a time for you to swing by the office Friday so we can meet in person.

Too many angels bubble the cloud

A little over two months ago Betabeat weighed in on the state of NY Angels, a group that gained a lot of visibility and respect for backing tech projects during the dark years following the dot-com bust. Every so often a media outlet will cover a NY Angels event or interview one of their executives. The latest is from Xconomy, which is ramping up its coverage of the local tech scene.

Xconomy's Arlene Weintraub sat down NY Angels vice chairman Brian Cohen. When we last spoke with Cohen, we asked why the group's portfolio, which has its own page on the website, didn't show any investments after 2009. "We are building a new website, so check back in 60 days," Mr. Cohen told us.

Well, it's been 100 days, and the site looks exactly the same. In his discussion with Mr. Weintraub, Mr. Cohen reveals that the group is aggressively adding members. The idea, he says, is to bring more "smart angels" into the mix, because there are "scalable startups" that can't find enough capital.

That sounds nice, but it's simply not the case. Their is a glut of money ready willing and able to be invested at the seed and early stage of tech companies in New York City. The best companies can afford to be very choosy about who they bring on, usually picking angels who can provide more than funding. Business development and connection to top engineering talent is what separates angels from the pack these days.

The NY Angels model, in which retired bankers, doctors and lawyers would cut $25,000 checks and make decisions by committee, was in demand from 2001-2008. Adding more of these folks to the mix by expanding the ranks won't help to convince local entrepreneurs that the NY Angels is a smart place to go for funding.

What NY Angels really needs to get back in the game is a series of smart, highly visible investments or social proof in the form of endorsements on the blogs and Twitter feeds of well respected investors and founders in Silicon Alley.