Venture Hacks

Bill Burnham, hedge fund manager and former VC:

“Angel investors are becoming the dominant force in Consumer Internet Venture capital. The vacuum created by the withdrawal of VCs from traditional Seed and Series A opportunities in the Consumer Internet space has been filled by a motley collection of angel investors. It is angel investors, not VCs, that are writing checks based on good ideas, business plans, and “alpha sites”; not VCs. The importance of angel investors is such that it is not unusual these days to see an internet startup publicly announce its round of angel funding, when in the past such events did merit a public mention. Yes, angel investors have always provided seed money, but today they typically provide 100% of what was once considered Series A money as well.”

(If only there was a list of angel investors…)

There’s also a good discussion in the comments. Bill says:

“My take on most seed/ super-angel funds is surprise, a fairly cynical one. I think if you offered $1BN to the managers at these seed stage funds they would go from Seed focused to multi-stage in a remorseless heartbeat.”

Dave McClure replies:

“no, i wouldn’t trade my model for that bowl of bullshit, even for the bigger paycheck in the short-term. it’s just not sustainable.”

Read Bill’s full post.

I would like to hear from VCs who are co-investing and competing with these angels. What seed stage companies are you investing in? What were the company’s metrics like when you invested? Are you seed stage (plus follow-on investments) or truly multi-stage?