
VCs Aim to Out-Angel the Angels - bootload
http://www.businessweek.com/print/technology/content/apr2007/tc20070402_747117.htm
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Alex3917
This seems dangerous. If the entrepreneur takes VC money before having a
working product and user base, then they have no leverage to negotiate a good
terms sheet. Better I think to take a seed round and angel round first even if
one can go straight to VC. The 15-20% equity you give up in the first two
rounds will at least buy some powerful allies if done strategically, in
addition the leverage of a concept you have had time to validate.

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whacked_new
Intriguing article. If VCs and angels start competing with each other, there
must be a decent-sized market of startups with considerable potential. As if
the funders are sellers and the founders are buyers. More power to the little
guys with big aspirations!

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bootload
_'... If VCs and angels start competing with each other, there must be a
decent-sized market of startups with considerable potential ...'_

My take is the market is re-adjusting. YC has now shown that the cost to get
startups to market is low and therefore the average & not so average VC's who
want to give more money out than startups need, have begun to adapt giving
less. [0] I'm seeing adaption in the developers tool market as well. [1] Big
business is catching up.

 _'... More power to the little guys with big aspirations! ...'_

It demonstrates that the money bit is not the real stumbling block.

Reference

[0] pg, 'The Venture Capital Squeeze'

<http://www.paulgraham.com/vcsqueeze.html>

[1] bootload, 'Delphi on Rails?'

<http://news.ycombinator.com/comments?id=8494>

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mukund
If VCs become Angels, i mean real angels with halo on the top then i would
really appreciate that but being an angel investor, i would still be skeptic
about them :p

