Skimming the recent spate of somewhat rosy articles touting the resurgence and benefits of angel investing, I was persuaded to dig through some of my older posts to examine whether my somewhat caveat emptor position on raising angel capital had been swayed. With a few exceptions, it hadn’t.
This is not to say that I am a critic of the practice of start-up teams chasing investment dollars from individuals. Capital coming from private individuals is still how many, if not most, start-ups initially get off the ground. Additionally, in a challenging funding environment like the one we currently inhabit, finding individuals ready and able to “top off” institutional investment rounds is often a key element in getting those rounds closed at all. Indeed, one of my more popular posts over the last couple years, The Rise of the Pledge Fund, focused upon the emergence of “fundless” or non-committed funds that were targeting seed stage deals and offering individual angels the administrative, post-investment supervisory and deal flow benefits of a traditional venture fund without some of the drawbacks of being in a committed fund. On balance, I was a fan.
When Angel Capital Is Not So Angelic
