The Rise of the “Gentlemen VC”

Today’s local investing environment in undergoing change.  Huge change.  And we in the Triangle are not alone. This issue has been framed all around the country in the context of “the VC Model is Broken” discussion that has been going on for a few years now.  What does this mean and how does it affect us as entrepreneurs, investors and friends of both? Let me peel this back a bit. Traditionally the local angel served as first money in a deal.  And, as an angel, their role was to provide enough cash to bridge to some market validation point and deliver some light advice to help get this idea off the ground.  We called this the seed round and if you were able to, you secured $10,000 to $50,000 from a handful of angels totaling somewhere between $100,000 and $250,000.  The notion of board seats and formal corporate structures were pushed to later rounds and left for the professional investors. Typical “A” rounds for software/tech companies these days sit plus or minus $500,000 – sometimes much lower. Ten years ago this would have been $2M to $3M.  I spoke to David Ranii about this a few weeks ago which inspired this article

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