At least for me, a big part of it has to do with the shift almost entirely to convertible notes.
When I made my first angel investment ~10 years ago almost every opportunity was priced. Now almost everything is a note (either with a very high cap or no cap and a small discount).
I like to know what I’m buying.
And if a startup is saying they’re going to grow 1000x in 18 months but wants to cap my return over that timeframe at 20% that seems like a raw deal considering the very high risk that they won’t be able to raise at all.
I applaud them for being able to get it done. But it’s been 2 years since I’ve made my last angel investment. I’ve allocated that money to stocks instead.
When I made my first angel investment ~10 years ago almost every opportunity was priced. Now almost everything is a note (either with a very high cap or no cap and a small discount).
I like to know what I’m buying.
And if a startup is saying they’re going to grow 1000x in 18 months but wants to cap my return over that timeframe at 20% that seems like a raw deal considering the very high risk that they won’t be able to raise at all.
I applaud them for being able to get it done. But it’s been 2 years since I’ve made my last angel investment. I’ve allocated that money to stocks instead.