Ron Conway, one of the most well-known and prolific angels in Silicon Valley, hasn't stopped investing. In fact, today is probably a good time to get some of the best deals. According to Conway, valuations are down 20% to 25% for the investments he's looking at. Plus, liquidation preferences - which determine how the pie is distributed in the event of a liquidity event - have been added, he said.

Conway was speaking on a panel called, "Is angel and early stage investing dead?" at the AlwaysOn Venture Summit in Half Moon Bay this week. In this segment, Conway talks about the sectors that are "hot. 

"I think traditional search is a sector that’s probably crowded," he said. "But there’s an adjacent sector, which is crowd sourcing of search results." Conway pointed to Aardvark, which he has invested in. The site was founded by former Google employees.

The next generation of search won't be solved by "algorithms" he said. Rather it'll be advanced by companies that give "excellent search results via crowd sourcing." Additionally, Conway pointed to "how-to" Web sites and cloud computing as emerging areas he'd take a look at.

As for video sites? Sounds like he'd take a pass.