Paul Graham on “The New Funding Landscape”

October 21, 2010 · 1 min read

Couple excerpts from PG's latest essay:

What super-angels really are is a new form of fast-moving, lightweight VC fund. And those of us in the technology world know what usually happens when something comes along that can be described in terms like that. Usually it's the replacement.

Paul seems to be agreeing with Matt Cohler on the first point—that super-angels are really micro-VCs. (Mike Maples used to call himself "micro-cap" before he switched to "super-angel".)

On why super-angels are more sensitive to valuation than VCs:

If you're hoping to hit the next Google, you shouldn't care if the valuation is 20 million. But if you're looking for companies that are going to get bought for 30 million, you care. If you invest at 20 and the company gets bought for 30, you only get 1.5x. You might as well buy Apple.

On signalling risk:

Signalling risk smells like one of those things founders worry about that's not a real problem. As a rule, the only thing that can kill a good startup is the startup itself.

If this intrigues you, go read the whole thing.