Lots of savvy insights, but I'd question Rachleff's position that the angel community took on a "sucker's bet" when it became the main source of early funding for software startups that hadn't yet established product-market fit.
I think what Rachleff deep down knows -- but didn't want to say -- is that putting money into a very early-stage software startup is a time-intensive proposition. The founders are groping their way, and their odds of getting it right depend, to a large extent, on the quality of never-ending advice and contacts that they get.
The best angels have the patience and the hands-on knowledge to provide this guidance. They also make a ton of money selling their expertise in the form of repeated consults-over-coffee.
For every venture capitalist that's willing to put in the work at the beginning, there are dozens who would much rather live large, work short hours, bicker with their partners and concentrate hard on raising the next fund.
For that group, everything else that Rachleff says is quite true. Mainstream VCs are very comfortable providing capital (and public promotion!) for 10x companies going to 500x, or for 100x companies going to 5,000x. It takes a rare blend of nerve and cheery enthusiasm to pull it off, but it also is much easier work.
I think what Rachleff deep down knows -- but didn't want to say -- is that putting money into a very early-stage software startup is a time-intensive proposition. The founders are groping their way, and their odds of getting it right depend, to a large extent, on the quality of never-ending advice and contacts that they get.
The best angels have the patience and the hands-on knowledge to provide this guidance. They also make a ton of money selling their expertise in the form of repeated consults-over-coffee.
For every venture capitalist that's willing to put in the work at the beginning, there are dozens who would much rather live large, work short hours, bicker with their partners and concentrate hard on raising the next fund.
For that group, everything else that Rachleff says is quite true. Mainstream VCs are very comfortable providing capital (and public promotion!) for 10x companies going to 500x, or for 100x companies going to 5,000x. It takes a rare blend of nerve and cheery enthusiasm to pull it off, but it also is much easier work.