The SuperAngel phenom continues to mature. When the SuperAngels first took share away from the Series A VCs (who felt they owned the first institutional funding stage), the VC reaction was all over the map, and the punditry had a field day with VC vs. SuperAngel smackdowns, fueling the fire. We saw out-of-box VC behavior: big firms playing angel with small investments, and smaller funds playing mezzanine by buying into momentum deals (like Facebook, Twitter and Groupon) at huge valuations. Things have settled down a bit, and while it isn’t really a lovefest, the SuperAngels are happily fitting into a new ecosystem of peaceful coexistence within a very competitive VC environment. Two key insights:
- SuperAngels make the VC system more efficient, taking the early risk away and letting the bigger funds scale a validated business plan. The Bullpen Round – extending the lean SuperAngel model for one more flip of the card – also fosters the more efficient use of capital.
- SuperAngels have driven some large VCs into a Barbell Strategy, of lots of small investments in syndication with SuperAngels, and a few big bites of later-stage momentum deals. Andreeson Horowitz seemed to have pioneered this model, with lots of SuperAngel style activity and a few big bets into Skype and Twitter.