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If that is why VC is broken, how will a service like AngelList help? I fail to see how connecting investors and startups in new ways addresses the issue of poor
by 7Figures2Commas 13y ago
If that is why VC is broken, how will a service like AngelList help? I fail to see how connecting investors and startups in new ways addresses the issue of poor returns.
For what it's worth, my impression has been that there is too much capital chasing too few funding-worthy startups and in recent years this has been driven in large part by monetary policy, which is producing capital misallocation and malinvestment across many asset classes.
I'd guess that when the game is over, angels and super angels will be especially affected and many will drop out of the market altogether. That, of course, would negatively impact AngelList.
- asanwal 13y agoI'd suspect it helps do 2 things - marginal VCs die sooner. This is already happening but more competition for deals hurts VCs who don't bring a lot to the table. This either brings in new smarter blood or right sizes the industry. - can allow for a set of investors whose criteria for success is more in line with reality. A $100M exit doesn't get most VCs excited but angels and syndicates of angels prob love those. And 60% of tech M&A exits last year were less than $100M.(1) (1) http://www.cbinsights.com/blog/acquisitions/tech-mergers-acquisitions-deals-2012-report http://www.cbinsights.com/blog/acquisitions/tech-mergers-acq...
- 7Figures2Commas 13y ago> A $100M exit doesn't get most VCs excited but angels and syndicates of angels prob love those. Sure, I could see an angel who put $50,000 into a $250,000 seed round for a company at a $2 million pre-money valuation being happy about a $100 million exit if said company never raises additional capital, but I'd be interested in knowing a) how typical this type of scenario is and b) what the overall returns are, on average, for angels actively making these kinds of investments.