I think this piece takes an unbalanced view of angel investors by treating them as some sort of enemy.
Successful startups can come in many shapes and sizes, though some highly respected people like Steve Blank take the view that what you are building cannot legitimately be called a startup unless it shoots for the moon and seeks to massively scale. I think that Mr. Blank's view reflects VC thinking, and it is a legitimate point of view from that perspective. All small-scale businesses, in that view, are and will always remain "small businesses" unless they aim for massive growth and for a transformative commercial outcome, in which case they are true startups. High risk. High reward. High failure rate. But, in this view, you are not doing a true startup unless that is the view in mind. Of course, any such startup will necessarily require large infusions of capital in order to aim that high, and this assumes it will be VC-funded.
I strongly disagree with this VC-only view of startups (that is, with its being the only legitimate form of startup), and the founders I have worked with for years have tended to reject it as a working approach to their startups. These sorts of founders have always valued the independence of keeping control of their ventures and of seeking to build it to the optimum level for their needs and then either selling it or keeping it as a longer-term business that is solidly profitable. Even in the days when it took far more capital than it does today to launch the prototypical Silicon Valley startup, it is amazing how many such independent startups managed to thrive and flourish in the nooks and crannies of the startup world. The founders behind such companies had all the exceptional qualities that solid entrepreneurs need in order to conceive winning ideas and to execute them well.
In today's environment, such independent startups are thriving and flourishing all the more as the capital needs for launching a startup have sharply declined. The independence of the entrepreneur, and the corresponding power of control over one's own company, is stronger than ever. This is solidly confirmed today in Silicon Valley and elsewhere as early-stage startups are proliferating while VC-backed ventures have been comparatively stagnant. In this sense, it is perhaps a new era for startups. Those that want to build their company independently, or even those who ultimately plan to seek significant outside funding but wish to defer such funding until they can build solid value and minimize dilution, are in the ascendancy and this trend is possibly a permanent one.
All that said, the founders who fit in this "independent" category have never, in my experience, seen investors as the enemy. There is an antipathy to VCs who propose shark-like terms but never to quality VCs who can legitimately take the company to the next level. Maybe they don't want to take the risks associated with such a course, but the founders see it as one legitimate option to consider - to consider and reject for many of them, perhaps, but to consider nonetheless. They are not harmed by the presence of such VCs but rather helped in that their choices are broadened for situations where such a path might become attractive to them.
Whatever may be said of VCs, though, there has never been any general antipathy to angels as a potential investment source. Angel investors have always come in all varieties. Many are successful entrepreneurs in their own right and they not only can invest money into a promising venture but also other talent and expertise that can help guide the venture. I have seen such situations firsthand, over and over again, where such contributions have proven invaluable to the startups involved and much appreciated by the founders. It is precisely by this means that founders often can raise the comparatively modest amounts of capital that would be too much for the founders themselves to risk but that are essential to building the venture to the point where it can become commercially feasible. Such companies have nowhere to go without such capital, and the angels are there to supply it on terms that are often reasonable and very much in the interests of not only the angels but of the founders also. To categorically write off this sort of investment as coming from some congenitally hostile source that must be resisted at all costs by founders is a mistake. Some ventures, of course, will want strictly to self-fund. But not all do. Indeed, from my experience with having worked with countless founders, I would say that most do not want to limit themselves strictly to self-funding because they themselves see that pure self-funding will not enable them to realize their goals for their venture.
I am not saying that all angel investments are good or that all angel investors are benign. It is a shark's world out there and, whenever entrepreneurs are taking investment money, they need to watch their backs. But to dismiss angels as a category is to dismiss the idea that founders should have a broad range of choices before them in seeking to build their companies, and such a categorical dismissal is a serious mistake for most ventures. It is like saying that, because there are risks in a certain direction, I as an entrepreneur will never walk that path even while my competitors keep that option open for themselves and perhaps use it to outrun my venture through needed capital infusions that can often take a company to a better level.
My advice to founders: don't be gullible in allowing yourselves to be cowed into taking in investment money for no good purpose other than to brag about being a legitimate startup (this is good advice from this piece); but don't become so narrow-minded about investment options that you box yourselves into a strictly self-funded venture in cases where that may not be in your startup's best interests.
In other words, forget categorical rules in this area. Consider angels and their investments in light of the bona fide needs of your venture and, if they can meet those needs, then by all means avail yourselves of the value they offer (and, yes, do it on the best terms you can and watch out for the vultures). If they don't meet your needs, and you see more value in building a long-term profitable company without looking to be acquired, then by all means avoid investments that will only complicate your company and your life.
But by all means keep a balanced view of this or you will only arbitrarily limit your own legitimate options for building a successful venture.
I think he sees angels as more of a blogospheric enemy than a financial or business enemy.
For everybody who's seriously involved in business around Hacker News, there are quite a few dabblers and posers, and a lot of people who get their rocks off by writing about business rather than doing it. There's also a lot of people who are immature and naive, haven't seen much, and get a 1-dimensional view of things... who ought to have some different perspectives on business than you usually see around HN.
But then again, you could also be hanging around people like Eli Aliosi and Nicky Cakes...
It's funny to see those names here, they are both industry friends of mine. There are thousands of affiliates quietly making six and seven figure incomes without any angel funding or hope for an exit. I know, I was one of them. terra, are you an affiliate marketer too? How do you know those guys? It seems like HN is dominated by startup guys rather than people building successful smaller scale businesses.
My partner left a comfy management consulting job to co-found our business and we constantly argued about taking external investment at the beginning. She felt compelled to seek it, even though we didn't need it. I'm convinced it was due to the prestige of receiving investment - instead of telling her old coworkers "I've started a little company," she could say "I've raised half a million dollars for my startup." Thankfully, I talked her out of it.
Now people come knocking on our door looking to invest. When you're solidly profitable and growing, suddenly these people looking to buy a chunk of your business don't seem like such a sweet deal - unless they really have enough capital and connections to safely push you into a much larger market.
Sorry, I don't care to reveal that information. I work in an offline sector that is not as carefree with information as Silicon Valley software firms tend to be.
My company is actually far more capital intensive (think plumbing or dentistry) than a software firm would be. We had non-trivial fixed startup costs and our costs tend to scale up (slightly sublinearly) alongside our growth, but we still managed to bootstrap via consulting, one-off jobs, favors, and creativity. I often puzzle at why a software startup which has far lower costs than our firm would want to take outside capital.
From an entrepreneur's perspective, capital is much more suited to a firm like ours than a software company - when I look at the margins in the software industry and the small amounts of money angels invest in exchange for the equity, I think they must be laughing all the way to the bank.
You're only seeing the winners. An ill-defined software product (which almost all software startups are), is similar to scientific exploration - you start with an idea, but you have no idea going in how much effort (months, years, decades) it will take to realize that idea, or even if its possible at all. After all that, what you end up producing may be not what customers want at all. In the time you took producing your new innovative software product, the market could have moved on.
The immediate example that comes to mind is "Cuil," - a search engine (large market) started by ex-googlers (great team), with $5 million investment (well-funded). It took them forever to launch (because its a hard problem), and partly because of that, they got poor PR and little traction. They've got another $25 million investment since then, and almost nothing to show for it.
Crunchbase says:
"Husband and wife team Tom Costello and Anna Patterson were joined by Russell Power. Patterson and Power are ex-Google search experts"
Anyway I don't want to cast aspersions too much on Cuil, because they may turn out to be successful eventually. My point was that software is a hugely risky business, with massive upfront costs.
You can build stuff cheaply of course, but when you do that, you have the problem of dealing with competition - namely if you can build it cheaply, others can too.
I hope I'm not lumped in this group. I angel invest because there are some amazing people and I want to be involved and help the best I can. But I don't ever go looking for businesses and try to "convert" them to venture-backed firms.
There's a whole LOT of businesses that outside investors make zero sense for. Generally the kind that can reinvest their revenue for growth should avoid it. I almost always ask folks who have early revenue why they think they need to raise and suggest that they figure out a way to grow without an investor. If there was a way to reliably invest in a startup that was going to produce a revenue stream rather than exit someday then I think that would be awesome in general.
Also, I only update my blog like twice a year.
(And, finally, I am trying to build revenue-producing projects on my own. I don't talk about them because I am mostly just embarrassed.)
And, to be clear: I agree with Max. There is unnecessary seductiveness of the lifestyle. And a lot of distortions in behavior due to chasing far too few opportunities.
I think 'lifestyle' is the critical bit, rather than the hand-rubbing evilishness of angel or other investors - it's hard to imagine this has changed much, to the extent that it exists.
The popular glamorization of 'startup as lifestyle' and, worse, 'startup as self-help/self-actualization' seems like a newer and sillier thing. You can open HN on some days and it reads like some sort of Cosmo for nerds.
Good for you. (opps, message got threaded away from parent, reply to user who avoided VC)
It seems best to avoid those that bring money but no skills/services to the table. While some could prove to be good allies, many others are more apt to be parasites than productive. If this country weren't so full of people trying to (or succeeding) in getting rich without actually producing anything useful, we wouldn't be in such a sorry state.
Capitalism and competition can be a wonderful environment for innovation, but it can have a dark side when greed games the picture. I stumbled on an interesting piece a while back that I thought adds perspective
This is a paranoid worldview. Of course angels operate in self-interest, just as you should. It's unfortunate if you get taken advantage of by an unscrupulous investor, but it doesn't make angels evil in general.
At the end of the day angels (and VCs) are handing you wads of cash to build your company. This might save you years of scrimping and saving just to have enough savings to bootstrap for a year or two (and forget about it if you have any serious capital expenditures). Should they just be cutting 5, 6, 7 figure checks out of the goodness of their heart? No, it's your responsibility as an entrepreneur to know what you are getting into. And I should add that that is much easier today with the wealth of good solid information about term sheets, etc, that is available today on the web for free compared to as recently as 10 years ago where you basically had to learn things the old-fashioned way (ie. personal connections, apprenticeships).
That said, yeah, bootstrapping is better if you can possibly do it, because you take all the risk and you reap all the rewards. But to say that the very idea of aspiring to build a large company is koolaid sold by angels is ridiculous. It's the fundamental silicon valley dream; painted by history, not some snake oil pitch.
A talented young programmer from a good university can easily be making $100k within 5 years after graduation. So building small profitable companies that pay your bills have a fairly large opportunity cost. You need somewhat of a blowout to overcome that opportunity cost.
- most likely in a cubicle
- reporting to middle managers
- on a hardware and software stack selected for them
- frequently in the kinds of unsustainable scorched earth industries and overly large multinationals
- frequently in industries which centralize wealth and destroy small and local enterprises
Still an opportunity cost. And facebook, google and twitter are among the biggest hirers of the kind of people I'm talking about. 3 or 4 years at facebook or google makes for an even bigger opportunity cost.
Working at a company at facebook or google increases your human capital, increasing one's opportunity cost.
This can make it harder to leave the stable and growing pay check and try to create your own thing. This is not to even mention the growing amount of responsibilities that come with age (mortgage, family, etc.).
> reporting to middle managers - on a hardware and software stack selected for them - frequently in the kinds of unsustainable scorched earth industries and overly large multinationals
> frequently in the kinds of unsustainable scorched earth industries and overly large multinationals
That's not where hackers who could realistically pull-off a tech start-up usually end up going to.
Would folks rather make 70k per year working in their own small profitable software product company (either alone or with a partner) or 100k working for a large software company as a Sr. Software Engineer? What about 60k?
I'd happily trade the 30k for complete control of my time and decision making.
In your own business 70k could turn into 200k (or more) in profit. That's a pretty unlikely pay jump for a Sr. Dev. Switching to a middle management job e.g. dev manager, dev lead etc. doesn't guarantee a huge pay increase either. There are people that make a big salary in tech. It's not impossible but it's tough. It also goes away the second you stop working.
Of course your own company could flop. That's a real risk. If it does you've suffered some opportunity cost but hopefully you've learned a lot and had some fun.
Another plus to starting your own gig is that if you figure out how to do it once you're more likely to be able to do it again. Known how to create value people will pay for is an empowering feeling.
I'm not against shooting for the stars and raising money. I think it's worth it if you have an idea that you are die on the hill passionate about and that has the right scale factors. What do you do in the mean time if you don't have that idea? If you don't then shooting for a single that gives you more control of your life and the potential for more upside seems like it's worth the risk.
Who know maybe it will turn into a double.
This is the path I've taken. I'm often surprised there isn't more talk about this topic and the trade offs between home run swing vs lifestyle business vs. job.
I don't think lifestyle businesses and the strategies to make them happen get enough play. I think the current environment is ripe for more software devs to follow this path vs. a job.
Starting a business often means zero k for some period of time. Trading 30k sounds reasonable (in some parts of the world), but what about 10k? 5k? And "complete control of my time and decision making" reminds me of that old saying about business owners - "I get to choose my own hours, as long as its all of them."
You are clearly not a dumb person, having been commenting smartly here for many moons now, so I'm wondering how you've managed to disregard the fact that most moon-shot "blowout" companies fail. There's an even bigger opportunity cost to spending 3-4 years of your life on something and have it come to nothing.
> There's an even bigger opportunity cost to spending 3-4 years of your life on something and have it come to nothing.
Sometimes a binary outcome (death or success) is better than going nowhere and being unable to walk away from it. Most hackers (for better or for worse) aren't really interested in managing a business, but just want to write code. I'm pretty sure all would agree that running a small business is incompatible with "just write code".
Failing in two years and going back to work for The Man (to write code) doesn't sound too bad. Then again, that dynamic may be exactly why startups fail or "sell out" for sums that are leaving VCs (but not angels!) very angry e.g., "don't pull a Patzer, dipshit companies".
Certainly, but just trying to point out there are costs to every decision and the unbridled optimism of the OP is annoying. Trying to bootstrap right out of college will lead to more bad outcomes, in my opinion, than just about any other choice.
If you have a 33% chance of success, then the expected payout from a startup only needs to be 3 times greater. Doing a startup is a fairly logical decision in terms of expected value. Jobs are in the business of selling income insurance. It's really just a question of the minimum amount of insurance you can stand to live with (consumer preference).
I don't think Max is proposing that programmers build companies just to pay the bills. Paying the bills is not the final goal, it's just a requirement for bootstrapping.
There's a big difference between the the kind of expected return necessary to compensate for the risk of failure and the blowout he's talking about.
I disagree, but it may depend on where you live. In Silicon Valley, working on your own for 5 years on cutting edge technology, even if you fail, gives you a distinct edge in the job market over someone who spent 5 years working on an obsolete stack and probably a significantly higher salary. The salaryman probably has a far higher burn rate and no significant savings.
'Max' extrapolates a lot from relatively little anecdotal data and does that quite frequently.
For instance:
> Angel investors are not interested in companies that create value and that can hire one or two people, while making a steady profit.
That goes for some angel investors but definitely not for all of them, in fact the majority of the angel investors that I know of are doing exactly that.
> The investors are interested in blow-out companies – companies that either grow huge, or that will be bought by other companies. Those are the only types of companies interesting for the angels.
No, those are the only types of companies interesting for the VCs whose only way to recover their massive investments is a sizeable exit, not a lot of piddly little dividends over the years.
I think it's wrong to lump 'angels' and 'vcs' on the same heap like this, and even between VCs (and individual deals done by the same VC) there is a lot of difference.
Partnering with an angel or a VC that has a similar risk profile to your own is a good way to avoid such issues, and that starts by defining what your risk profile really is.
You can drop the quotes around my name, just like you don't put quotes around Andrew Warner's name. It's now my real name and has been for several years.
What I am focusing on is not the actual people who successfully attach themselves to angels, but the people who fail by aiming for that mode.
If you build for acquisition but it does not take off, there is no place to fall back to.
Ah, sorry I thought it was an alias for "Mark Essien", a 'nom de plume'.
If you build for acquisition I think you're doing it wrong anyway, you really should be building a business that stands on its own strength. Of course there are plenty of people that do this but they are hopefully aware that their prospective buyer is under no obligation to actually consummate a deal at any price.
They also break their own negotiation position because there usually are not that many possible parties that would acquire such a company, so it's a buyers market by definition.
Likewise, his methodology for getting to the point is not really relevant, either.
There is an angel bubble. Max is discussing one aspect of it. I disagree that many people are intentionally going out there and seducing people into the mindset, but that is a very minor point as the outcome in aggregate is the same.
More importantly, there needs to be a better way to finance the kind of companies that Max is talking about. While I get the impression that Max gets the impression that these are better, that is also not relevant to the validity of the point.
- The angels that invested in our company have jobs/companies, families, and dozens of other small investments. They don't have time to ensure we build any particular type of company, even if they wanted to.
- Every time we ask them for advice, they put exactly zero pressure on us to take the company in any given direction.
- The article assumes angel investors cunningly collaborate to craft their blogs to raise a generation of an entrepreneurs that behaves in a certain way. With all due respect, that's nonsensical. There is a similar argument that could be made about survivor bias, but the article implies conscious intent which simply isn't there.
- Most angel investors make investments because they love technology and the startup world and want to use their money to affect positive change in the world. Often times they invest in people for no reason other than that they like them.
- And finally, running a small company is almost as time consuming and stressful as running a large one, except you get no pay off. You also learn far, far less. I'd much rather get a rewarding job (of which there are plenty) - the stress is lower, the pay's much better, and there's opportunity to learn from other people.
I agree in general. About the last point: When you are running a (small) company for yourself, you are much closer to the market than when just having a job. There are lots of things to learn either way, I guess.
And one of their main bait methods is in their writing. Angel investors and others in their eco-system are writing on the internet about how to make money on the internet. These articles are what young programmers read, and the methods that these people write about is what the programmers end up using.
Salesmanship is a fact of life. Even great products need effective marketing. People only use products they've seen. A company must find an audience and prove to them that the company is worthy of their money. Blogging and hanging around social sites accomplishes this faster than anything else. It means immediate feedback from tens - if not hundreds - of people, and a company can rapidly change its plans accordingly. Maybe I'm not reading the right angel investing blogs, but what I've seen is very up-front about the risks (although they obviously are outweighed by the rewards :D).
This post seems rather disconnected from the angel investing process. And this is coming from a guy whose first start up was literally stolen from him.
Try not to lump it all into programmers vs investor, because no matter what happens afterthat distinction is made someone will lose.
How many generalizations can this blog post get away with? How about an example or two?
Some things I wish were touched upon:
- How do angels"investing money because they want even more money back" differ from VCs?
- What are some examples of these malicious angel blog posts? What bait is in them exactly?
- "Those are the only types of companies interesting for the angels." Why?
- Why is "a simple product company that has a large market and that will pay your bills quickly" right for the young programmer? Why is it better than what angels supposedly advocate?
- How do you distinguish between "ambitiously dumb" and disruptive innovations?
I agree with some of the bigger ideas here, especially: "Don’t see venture capital as your aim. Don’t see seed investments as your aim. Don’t build only things that google may acquire." but the post does little to back up a pretty sensationalist title.
Some businesses don't need "angel" money or don't need very much.
One of my tenants wanted to start a small brick-and-mortar store. He needed $30K to get inventory, and he could only get a bank loan for $15K. He was glum and depressed one day, and I suggested to him "have you considered equity financing?"
The next day he came around and asked me if I was serious -- I told him I'd chip something in if he got others to. I bought $2K worth of shares, and other people, like the leader of his coven, bought shares too.
Now, from my perspective, the $2K meant that he was going to keep paying the rent, and I could lose that much money if the apartment was vacant for a few months, so it's a pretty risk free proposition. If I cashed out now, I'd get at best a small capital gain, but I wouldn't have done any better in the stock market.
Of course, I'm not a "serious" investor and I wasn't systematically thinking about how to make money -- but this gives some idea of the scale of investment that's required to succeed at a "lifestyle" business and how it's just not worth it to somebody who's already rich...
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For a current venture I'm thinking a lot about finding "investors" who are interested in payments in kind that can be delivered quickly (a year or so;) Roughly, I'm looking for a certain kind of "investor/customer" who can pay me $10k now, expect to get $20-40k worth of value over the next year, and leave me with an asset that generates $2-5k a year worth of cash flow. This "moving revenue backwards in time" makes a big chunk of my balance sheet weightless, could let me grow fast w/o sinking in a lot of my own capital... And rather than diluting my equity, it incorporates the "voice of the customer".
Maybe this is all just projection (Hey, at least I'm honest), but I think there's something valuable being said here. About building something for it's sake instead of building it solely for money. In the first case you're actually creating something, in the second case you're moving only towards a payday.
Of course, there's nothing wrong with getting fantastically rich (or soemthing), you probably wouldn't be building something if not for the payday.
It's absurd to focus only on that, though. I know I couldn't sleep at night if I made a million (or 10) bucks selling a worthless company to a bigger company. That's not why I want to create.
Don't get it twisted though, I'm not saying every company that doesn't feed the poor, clothe the needy and solve the issues of world peace and universal justice is misguided. I'm simply saying it's worth aiming for something/anything beyond the financial gain.
There is nothing wrong with building small companies with "only" the aim of living off their money, without being huge and world-changing.
But some entrepreneurs are in the game to build exactly those huge companies; I'm one of them. I don't think I'm just gullible by wanting this: it just sounds like a better use of my time, despite the risk in it. (Of course, I'd rather a small business that makes me a steady income over nothing at all.)
Also, to address the point of the advice given by angel investors. I think for some of them (pg being a notable example), you can read a lot of their writing before they became angel investors, and this can tell you a lot about the type of advice they gave before they had their own financial incentive.
There isn't much to fund anyway. If you're building a webapp: hosting is cheap and the infrastructure is open source; the OS is open source, the tools/frameworks are open source, the languages are open source (python/ruby/etc), the editors are open source (I don't need an IDE, thank-you-very-much).
Now, you need money for your living expenses, but you can finance that by getting a (boring) day job for a year or so.
The evils of angel investors aside, there's a lot to be said about bootstrapping and the ability to grow a small business and earning steady income on the web.
Maybe cause I don't live in/around SF, but the whole investor cycle was never in my mind when I worked on projects. I ended up on the hobby-turned-business track.
Now these probably aren't going to get you Facebook/YouTube-sized exits, but can do quite well. And if financial freedom and lifestyle autonomy are your ultimate goals, you can achieve that.
You need to read 37signals blog, they have a series of blog posts called “Bootstrapped, Profitable, & Proud”, in their own words: it's a series which profiles companies that have $1MM+ in revenues, didn’t take VC, and are profitable.
i said "sometimes." i have no idea what you're trying to build, and neither does the author of this blog. for every company that has made it bootstrapped, there's another example of one that made it without going bootstrapped.
raising money is what it is. some people need it, others don't. it doesn't make angels "evil" because they don't align with your goal of building a lifestyle business. it's not like they're forcing you to take their money, or holding a gun to your head if you don't repay the money they risked on you.
Seems like a lot of blogs have been expressing this kind of sentiment lately. Is it really that easy to make a livable income from the kind of simple web app one or two people can build? How big is this market really? How many people are actually doing this?
I'm more inclined to believe that, like the app store, most people trying this are actually making peanuts, but I'd love to be wrong.
What, people with money and experience are taking advantage of the young and intelligent by paying them crap and building profitable businesses on the backs of the inexperienced?
Alert the press! Call the White House! Shocking revelation!
Successful startups can come in many shapes and sizes, though some highly respected people like Steve Blank take the view that what you are building cannot legitimately be called a startup unless it shoots for the moon and seeks to massively scale. I think that Mr. Blank's view reflects VC thinking, and it is a legitimate point of view from that perspective. All small-scale businesses, in that view, are and will always remain "small businesses" unless they aim for massive growth and for a transformative commercial outcome, in which case they are true startups. High risk. High reward. High failure rate. But, in this view, you are not doing a true startup unless that is the view in mind. Of course, any such startup will necessarily require large infusions of capital in order to aim that high, and this assumes it will be VC-funded.
I strongly disagree with this VC-only view of startups (that is, with its being the only legitimate form of startup), and the founders I have worked with for years have tended to reject it as a working approach to their startups. These sorts of founders have always valued the independence of keeping control of their ventures and of seeking to build it to the optimum level for their needs and then either selling it or keeping it as a longer-term business that is solidly profitable. Even in the days when it took far more capital than it does today to launch the prototypical Silicon Valley startup, it is amazing how many such independent startups managed to thrive and flourish in the nooks and crannies of the startup world. The founders behind such companies had all the exceptional qualities that solid entrepreneurs need in order to conceive winning ideas and to execute them well.
In today's environment, such independent startups are thriving and flourishing all the more as the capital needs for launching a startup have sharply declined. The independence of the entrepreneur, and the corresponding power of control over one's own company, is stronger than ever. This is solidly confirmed today in Silicon Valley and elsewhere as early-stage startups are proliferating while VC-backed ventures have been comparatively stagnant. In this sense, it is perhaps a new era for startups. Those that want to build their company independently, or even those who ultimately plan to seek significant outside funding but wish to defer such funding until they can build solid value and minimize dilution, are in the ascendancy and this trend is possibly a permanent one.
All that said, the founders who fit in this "independent" category have never, in my experience, seen investors as the enemy. There is an antipathy to VCs who propose shark-like terms but never to quality VCs who can legitimately take the company to the next level. Maybe they don't want to take the risks associated with such a course, but the founders see it as one legitimate option to consider - to consider and reject for many of them, perhaps, but to consider nonetheless. They are not harmed by the presence of such VCs but rather helped in that their choices are broadened for situations where such a path might become attractive to them.
Whatever may be said of VCs, though, there has never been any general antipathy to angels as a potential investment source. Angel investors have always come in all varieties. Many are successful entrepreneurs in their own right and they not only can invest money into a promising venture but also other talent and expertise that can help guide the venture. I have seen such situations firsthand, over and over again, where such contributions have proven invaluable to the startups involved and much appreciated by the founders. It is precisely by this means that founders often can raise the comparatively modest amounts of capital that would be too much for the founders themselves to risk but that are essential to building the venture to the point where it can become commercially feasible. Such companies have nowhere to go without such capital, and the angels are there to supply it on terms that are often reasonable and very much in the interests of not only the angels but of the founders also. To categorically write off this sort of investment as coming from some congenitally hostile source that must be resisted at all costs by founders is a mistake. Some ventures, of course, will want strictly to self-fund. But not all do. Indeed, from my experience with having worked with countless founders, I would say that most do not want to limit themselves strictly to self-funding because they themselves see that pure self-funding will not enable them to realize their goals for their venture.
I am not saying that all angel investments are good or that all angel investors are benign. It is a shark's world out there and, whenever entrepreneurs are taking investment money, they need to watch their backs. But to dismiss angels as a category is to dismiss the idea that founders should have a broad range of choices before them in seeking to build their companies, and such a categorical dismissal is a serious mistake for most ventures. It is like saying that, because there are risks in a certain direction, I as an entrepreneur will never walk that path even while my competitors keep that option open for themselves and perhaps use it to outrun my venture through needed capital infusions that can often take a company to a better level.
My advice to founders: don't be gullible in allowing yourselves to be cowed into taking in investment money for no good purpose other than to brag about being a legitimate startup (this is good advice from this piece); but don't become so narrow-minded about investment options that you box yourselves into a strictly self-funded venture in cases where that may not be in your startup's best interests.
In other words, forget categorical rules in this area. Consider angels and their investments in light of the bona fide needs of your venture and, if they can meet those needs, then by all means avail yourselves of the value they offer (and, yes, do it on the best terms you can and watch out for the vultures). If they don't meet your needs, and you see more value in building a long-term profitable company without looking to be acquired, then by all means avoid investments that will only complicate your company and your life.
But by all means keep a balanced view of this or you will only arbitrarily limit your own legitimate options for building a successful venture.