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Back to the future with Super Angels

Lately, the rise of so-called Super Angels – mostly successful entrepreneurs who first became traditional angels (e.g. investing only their own capital) that are migrating to managing pools of capital contributed by themselves and other successful entrepreneurs interested in early stage venture investing – has been getting a lot of attention. Some people – mostly institutional VCs – are worried about Super Angels encroaching on their turf. Others – mostly early stage entrepreneurs – are more or less pleased to have a new source of early stage capital willing and able to invest smaller chunks of capital than their larger more traditional institutional VC relatives. Which is the more convincing take?

In my view, the Super Angels are indeed filling a funding gap for early stage deals that don’t need millions of dollars to get off the ground. But they are doing it in a way that is far from original, and certainly not a threat to the larger VC community. Indeed, from what I have seen, Super Angels like Ron Conway are not just filling a funding gap that larger funds can’t efficiently fill, they are doing it with a model – a group of individuals (family money) trusting another individual to manage their early stage venture investing - that sounds a lot like the venture capital business circa 1970, doesn’t it? What will be interesting to see is if this new breed of “family and friends” early stage venture capital funds stays true to their roots or, like their ancestors in the early days of venture capital, themselves evolve over time into a new generation of bigger and better(?) VC megafunds.

More articles by Paul A. Jones

Paul Jones works with emerging technology companies and their investors as part of the Venture Best team at Michael Best & Friedrich LLP. A serial venture-backed technology entrepreneur and institutional venture capital investor, he is also the Entrepreneur-in-Residence at the College of Business at the University of Wisconsin-Oshkosh. He can be reached at pajones@michaelbest.com. This post was originally published on his blog at Paul Jones' Blog. To learn more about the Venture Best team or information on entrepreneurs and emerging growth companies, please visit www.venturebest.com.

The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of Wisconsin Technology Network, LLC. WTN accepts no legal liability or responsibility for any claims made or opinions expressed herein.


Comments

GF responded 3 years ago: #1

Paul,

It would be great if you could write about local issues. Aside from maybe George Mosher, I don't know of any Super Angels in Wisconsin and in the Midwest. Guys like Ron Conway.

Also, as soon as someone manages someone else's money, they are no longer an angel. They are a VC. If you want to call these guys "mini-VCs", that is more appropriate than "Super Angels".

Paul Jones responded 3 years ago: #2

Well...., what happens in California eventually gets here, right? Seriously, I most often do write about more local issues, but this one is something that I hope does happen here. Super Angel funds - with one decision maker running the show - are likely to be much quicker to the draw than organized groups of angels.

I agree with you re the name "Super Angels." But I didn't come up with it: it something the press came up with. Indeed, part of my point is that the name is misleading: these folks are just running smallish venture funds that look a lot like the venture funds of the early days of the business.

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