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. [test2]
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!
'... 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.
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
