
Why the #1 Investor on AngelList Hates Venture Capitalists - jkuria
http://blog.capitalandgrowth.org/gil-penchina/
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professorxyz
I appreciate Penchinas thoughts but its getting rampant on AngelList that
leads (Penchina included) put in tiny amounts of money in ($1k) and then
require their backers to put in 5x more to participate. With the standard
carry terms (20%)

Even that's okay but then companies are dressed up _hard_ to attract a quick
investment draw. When it's largely a cheap lottery ticket for the lead.

VC is broken and AngelList allows more exposure to startups but this isn't a
good thing.

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nivi
Last time we got this comment, we checked the #'s and leads put in 16% of the
investment on average.

Compare that to 1-5% for a typical VC fund. Partners in a VC fund also take
out 10-20% of the fund in management fees.

You can learn more here [https://angel.co/economics-
syndicates](https://angel.co/economics-syndicates)

Some leads have low skin in the game. In that case, you can always opt out of
their investments. Or invest in our funds and we'll make the decision for you
(for no additional cost) [http://angel.co/funds](http://angel.co/funds)

P.S. We don't hate VCs. They are among our users and customers.

~~~
simonebrunozzi
Hi Nivi,

I took a look at some data a while ago, and your "16% on average" sounds a bit
off.

Is it weighted on the amount of investments, or not?

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burntrelish1273
From what I've read so-far, this guy sounds top-tier legit "smart money" and
matter-of-fact. Maybe doesn't invest a lot, but advice and philosophy are
spot-on. (Added to my hit-up list in "possible top-tier Angel leads.")

Most importantly, this guy can break the ice for funding rounds, which gets
the thermometer bar for cap table round going. VC's especially don't want to
be first, so angels can help sort that out.

Also, another thing to consider is that angels, as a macroeconomic whole, have
much more capital and data than in years past, so they're financially able
(but not necessarily willing) to gobble up more and more of later-stage
rounds.

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phelix001
This is a great article. Dude is totally on point. I think it's funny that the
same thing, "What are three things that turn you off when an entrepreneur
pitches to you?" are apropos turnoffs of founders on investors.

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ivanbakel
Disappointingly misleading title, unless I somehow missed the bulk of this
interview.

~~~
curiouslurker
Perhaps hate is a strong word but he clearly does not like them! He does talk
about how they only care about themselves, boss around founders and then claim
credit for the founders' success.

~~~
ivanbakel
Which is buried in various parts in an interview largely talking about his own
work as an Angel investor. Given this is HN, I was expecting something in
actual depth about why VCs might warrant so much hate, and this definitely
doesn't have it.

