GenuineVC David Beisel's Perspective on Digital Change

June 6, 2005

Last Friday I had a conversation with Tony Stanco from the Council on Entrepreneurial Tech Transfer and Commercialization at George Washington University. He called to chat about VC bloggers’ thoughts on the report that he published last week, Survey: The Relationship between Angels and Venture Capitalists in the Venture Industry. An article in Private Equity Week summarizes the findings:

“In the survey, more than 300 venture capitalists and angels overwhelmingly agree that angels are beneficial to the venture capital industry. In fact, a higher percentage of VCs than angels (94% to 72%) said that angel investors are beneficial…

While the survey notes the “general foundation of goodwill and respect” between angels and VCs, 100% of VCs and 94% of angel investors agreed that the two sides could do a better job working together…

The chief problem that persists between the two groups is deal pricing. In the survey, 78% of VCs cited “unrealistic company valuation” as a reason that a company with angel involvement would be unattractive. Half of the angels surveyed agreed with them. It was the most popular response from both groups.”

I agree with the above two points. First, that angels are indeed extremely beneficial to venture capitalists, as they are an integral source of seed capital and support for entrepreneurs seeking levels of financing that are still as-yet too small or risky for institutional involvement. And yes, the issue of valuation is a viable reason for the tension between the two groups. I personally have seen a number of deals where the previous angel round and future expectations were at valuations that didn’t match our own.

But I believe that there is a deeper issue at play here – perhaps the tension also arises from lack of communication, as Stanco has suggested. Could we have an opening of the dialog in the blogophere as a new public forum to address the issues between angels and venture capitalists? We now have a mechanism to air our thoughts openly in bridging the gap in perspective between the two groups that wasn’t available with this audience just a couple years ago.

And to that end, I am wondering where are all of the angel bloggers? I know there are a few dozen VC bloggers out there. And a number of people have cited why VCs do blog (Paul Kedrosky, Seth Levine, and Jeff Clavier). Don’t most of the positive reasons also apply to angels, too?

  • http://blog.desmogroup.com B Watson

    I don’t know where all the angel blogs are, but I sort of count as one. While I am a VC at heart, and some would describe my activities as a VC, I also invest in small companies before they raise VC money. I think that blogging is still a little new and cutting edge for most of the angel community out there. Remember, mos of the money that is being invested in these new companies comes from people who made money outside of tech. Most of the angels I works with here are suprised I even have a website.

    I like what I am seeing from your site here…keep it up.

  • http://www.angelatlanta.com Knox Massey

    All–

    FYI–

    http://www.angelcapitalassociation.org

    The angels are too busy dealing with the “valuation” issue right now to ruminate on blogs. As soon as we can come to a meeting of the minds of the angel “benefits” to the VC’s, we’ll happily blog our heads off!Seriously, tho, my email address is listed here to any VC’s that would like to start a dialog.

    Knox MasseyAtlanta, GA

  • http://www.angelblog.net Basil Peters

    I agree the world needs more angel bloggers. Angels invest as much money as VCs. We may even have a greater influence on the overall tech ecosystem because we invest earlier. I have been working on a blog to propagate best practices for angel investors at http://www.angelblog.netDon Jones from VentureDeal started a network called ‘Angel Capital’ on Feedburner.

About Me

  • avatar
  • I am a cofounder and Partner at NextView Ventures, a dedicated seed-stage venture capital firm making investments in internet-enabled startups. Read More »

Coordinates

Subscribe

Rob Cho Go




 RobGo.org

NextView Twitter Stream

51015
  • David Beisel
     - 1 hour ago
    RT @redphase: Next #WebInno looks good, w/ @dunwello @villyit as main dishes and @ElsenTrading @Experfy, others as sides: http://t.co/Ocmex…
  • robgo
     - 1 hour ago
    @beneinstein yeah, I tried talking to someone at Google apps. They really tried, but couldn't access @gmail accounts
  • robgo
     - 1 hour ago
    @GoogleVentures to the rescue! Thanks @davemuni
  • robgo
     - 1 hour ago
    @davemuni thanks. Problem is account didn't have 2-factor auth. But now it does with an unknown #. It's my Mom's account, so she is sad :(

Search