Comments on: Do 58% of VCs Think Angel Involvement Is Unattractive – Nope!

By: The Dealmaker

The Dealmaker — Wed, 06 Jul 2005 14:39:18 +0000

Not Every Angel Comes From Heaven

One of the most important decisions a CEO can make is how to fund its first stage of the start-up venture. Angel investments are often the chosen route, yet experienced CEOs and finance executives say that angels are not all

By: Dealmaker Forum

Dealmaker Forum — Wed, 06 Jul 2005 03:52:38 +0000

Not Every Angel Comes From Heaven

By: Knox Massey

Knox Massey — Fri, 10 Jun 2005 21:07:43 +0000

Great post, Brad. Thanks for taking the time to post about us angels.It’s certainly refreshing to hear from someone who has had experience on both sides of the field.
It’s fairly apparent that the Inc. article is biased. The reporter is too obvious in looking for “problems” and “differences” between angels and VC’s or angels and entrepreneurs. Hey, maybe angels can take over as the new villans for awhile instead of the VC’s!
Anyhoo, the serious angels have learned to ignore this and get on with business.

Best,
Knox Massey
Atlanta Technology Angels

By: Brad Feld

Brad Feld — Thu, 09 Jun 2005 14:21:22 +0000

Joe – I completely agree. I’ve got loads of stories of bad VC behavior (and I’m sure there are people out there that have stories of what they perceive to be my own bad behavior.) I’ll post them in the right contexts.

By: Joe White

Joe White — Thu, 09 Jun 2005 13:59:05 +0000

Brad: Very interesting post. Having dealt with a lot of VCs, I would suggest that all of your answers to Question 1 (with the possible exception of bullet 1, although it is a matter of interpretation on what bad structure is…for the investor? management?) would be true of VCs as well. While I would expect you to reasonably disagree, and it may not be true of all firms, I think you may want to reconsider the notion that perhaps Angels and VCs are pretty similar. My experience is that while VCs are comfortable investing in a range of companies and industries and Angels tend to stick to verticals where they made their money, the reasons for investing, the benefits of investing, the degree of control needed, etc., are not that far apart. For every example you gave of unreasonable Angels screwing management/founders, I can tell you some stories about Angels supporting management. I guess it comes down to one thing, Angels are more emotional, but otherwise cut from the same cloth as VCs.

By: Ben Barren

Ben Barren — Thu, 09 Jun 2005 10:42:16 +0000

This is a great post, it shows years of personal experience, as well as strong analytical insight.

Im involved in seed-funding some RSS, Ajax and Tagging businesses in Australia – which is a totally different market, with 11m internet users but no local feedster, feedburner, technorati, movable type, newsgator, bloglines, etc etc (you cant even use MyYahoo unless u say u live in 90210 BH)

As a result, there are young local programmers who are naturally ajax and rss friendly (they dont know of a non internet enabled world) that need assistance that isnt as you say.. dumb hands off money (which there is also alot of in australia, with very few technology orientated VC’s or 2.0 angels)

Seed angels should help with basic back end elements such as legal incorporation, cashflow planning, and technical infrastructure, but also key business deals + revenue, which the founders or innovators (similar to a Greg Reinacker at Newsgator) might not have as their core priority as they prefer to develop the best most unique code in the world.

When it comes to the VC round, the angel should have helped made that business into something which has global and large potential, but something that also enables VC’s to invest in because it has a clean structure, shareholdings, good financials, strong pipeline, great management team, documented unique technology, and a history (of at least 12 months) of delivering.

And given 95% of new business fails, there is only a 5% chance a VC is going to be happy anyway isnt there ? so whoever is to blame, an angel is only part of the problem, or part of the 5% of success stories.

Great post – It seems VC blogs are on fire today with A VC’s ‘Quality vs Connectivity’ post also being knockout blow.

By: Seen Not Heard

Seen Not Heard — Thu, 09 Jun 2005 02:27:33 +0000

angels in china

I’ve been thinking a lot about angel investing here in China lately. A post from Brad Feld on vc and angels working together and last night’s talk which had the subtext of

By: Jake Kaldenbaugh

Jake Kaldenbaugh — Wed, 08 Jun 2005 19:39:45 +0000

Brad,
On a tangential note: You’ve hit on the biggest reason why I no longer use the media as a trusted source of information — they’re bias towards sensationalism distorts reality. Kudos to you for actually going to the source and realizing that the interviewer was trying to create a story that wasn’t necessarily there. And thank you for being mindful that some people would be interested in your whole/actual thoughts. Putting up the full text of your responses is a great idea — hopefully more people will start doing it.
I believe that this is one of the reasons why blogs have become a major source for information; people are more interested in getting real data from experts and less interested in pithy writing from an unexperienced point of view.
Thanks again.