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Sethaelliott
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Dave, I'm delighted that you've moved the generalized debate about AngelList (a bit of a tempest in a teacup) to a more substantive discussion about focused quantitative strategies ("spray and pay") vs. low-volume "traditional" venture investing. As you've noted, the data suggest focused quantitative strategies will (with rare exceptions) outperform low-volume investing strategies (I've been espousing this viewpoint with some colleagues at the Miami Innovation Fund). It seems clear that AngelList (and other tools) support and accelerate movement in this direction. However, my devil's advocate position / concern: Will It Happen Quickly Enough? I ask this in reference to the (growing) influx of newer angel investors (a generally good thing). Part of the implications of a quantitative investment strategy includes the acceptance that many of the investments will fail. In order achieve success, the fewer winners will need to (significantly?) outperform the total invested capital to balance out the large number of losers. An element of danger, therefore, will be an overheated market for angel investing that couples with a general malaise in follow-on investment and exit possibilities sometime in the next 3-5 years. So an important consideration seems to be will AngelList and other tools/platforms assist in outrunning (or perhaps even staving off) those market conditions rather than accelerating an entrance into such conditions. Curious as to your (and others') thoughts.
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Feb 28, 2011