There has been a lot of talk recently about the future of the VC market given the abundance of capital in the market and the relatively lower amounts of capital now required to get many companies off the ground. Firms like Y Combinator, Hit Forge, and First Round Capital are a few of many new firms investing in tech these days. Some of these firms look more like incubators (remember 12 Entrepeneuring and campsix?) while others look more like traditional seed VCs, many of whom kept increasing funds under management to levels where smaller seed investments no longer made sense. Plenty of new small funds that straddle the angel/institutional VC fence are starting all the time as individuals cash out from Google and other firms and look for something different.
With so many different takes on the best funding vehicles for the new generation of tech startups, I found the funding announcement about LinkStorm to be pretty interesting. "Linkstorm raises $4.2 million from 60 angel investors — The total is up to $13.2 million; the company had already taken $9 million from 150 individuals" writes VentureBeat. Traditionally it has been pretty rare to see large funding rounds from big groups of angels. The reasons given are typically time needed to pitch a large number of people, logistics/management of communications with a large group of individuals, and hitting reporting requirements once the number of shareholders exceeds SEC thresholds. Perhaps things change somewhat, though, when there are a vastly greater number of entrepreneurial-minded people out there who are comfortable with taking $100k shots in early stage startups. I’m curious to see whether this is just an anomaly or if we’ll see other companies going the route of large angel rounds rather than institutional VC.