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Super Angels

In the beginning, there were angel investors. And it was good.

As individual angel investors made more and more investments, they became super angels. One day a super angel woke up and thought to himself, “Gosh, I could do a lot more investments if I had a fund.” And so the super angels became micro-VCs (or “institutionalized super angels”). Everyone was excited and on the seventh day they did another deal instead of resting.

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One of the best panels of the conference. Sam Angus, Partner at Fenwick & West, leads the mildly controversial panel on Super Angels.

Everyone has an opinion about them. Many love them. Some hate them. Regardless of your opinion, Super Angels have really become a force recently. Most focus on consumer internet because the start-up costs are low (compared to green energy, semiconductors, and healthcare), but when you want to scale a company, when you need millions of users, then you need big capital...Except when sometimes you don't.

So how do the early stage VCs feel? Well there's one key thing to keep in mind: Big funds need big exits. Small funds don't. Enjoy the video, and online discussion!

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Fred Wilson throws in his two cents on the micro VC debate.

There have been quite a few posts written about this meme in the past few weeks.  I think that Paul Kedrosky got the discussion started with this post. Chris Dixon wrote an interesting response. And yesterday John Boyd wrote a thoughtful post on the topic. John makes a point in his post that I want to second and add to. He says:

While many businesses require a lot less capital to start, they don't require less capital to grow.

John's comment made me think about a blog post I wrote three and a half years ago called "Web 2.0 Is A Gift, Not A Threat, To VCs." If you haven't read that post, I would urge you to go read it. I blog because it helps me think through a lot of issues we face in our business and that post was really useful to us over the past several years of investing.

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Bijan Sabet throws in his two cents on the hot topic of super angels and the future of traditional venture capital.

I’ve been struggling with writing this post for some time. I hope I can do it justice, something tells me that I won’t but I’m going to give it a shot nonetheless. There has been a lot of discussion about the future of venture capital especially in light of all the enthusiasm and support of super angels. Many have suggested there is a math problem with the VC business - specifically too much money in the industry given the exits in this climate and near term climate.

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Paul Kedrosky makes a case for why the super-seed crash is coming but not everyone agrees. Give his latest post a read and share your thoughts in the comments section.

Unnoticed by almost no-one, the startup financing landscape has been transformed: a combination of ease of entry, lower capital requirements, failing incumbent venture capital (VC) firms, and general fervor has driven the emergence of a host of new "super-seed" firms. These small-ish outfits -- usually running less than $20m -- specialize in seeding a bazillion companies, following on in very few, and generally trying to be fast-moving and networked. 

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Angels, Super Angels, Micro-VCs: Call them whatever you want. Rob Go breaks it down for AlwaysOn by explaining why they're here and giving a glimpse of what might happen next.

For better or worse, Micro-VC’s and Super Angels seem to be the new intriguing sub-segment within Venture Capital. Funds like First Round Capital, Floodgate, Lowercase, Founder Collective, IA Venture Partners, Harrison Metal, and Felicis and individuals like Ron Conway, Keith Rabois and others show up multiple times a day on TechCrunch and seem to be behind every high profile investment in the internet world. How did this happen? Are these groups just a new fad or is a fundamental and long lasting change happening in the early-stage financing eco-system?

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