500 Startups’ Partner Says Angel Investors Will Replace Venture Capitalists


Paul Singh – partner at 500 Startups – says that the coming decade will signal “the rise of the angels.” According to VentureBeat, Singh argues that venture capitalists – who typically write much larger loans then angel investors and are part of private equity finance – will get “disrupted” just like TV, music, and publishing. The key to his argument: startups costs are getting smaller, and capital is getting commoditized through innovations like crowdsourcing.

Singh lays out his thesis in a presentation appropriately titled “The Rise of the Angels.”

500 Startups is a “super-angel fund,” writing many checks in the $50,000 range.  With tools like 3Doodler raising almost $700,000 in 24 hours on Kickstarter, one can certainly see the power of new-financing methods to replace powerful firms. However, provocative as it is, Singh’s theory of “disrupting the disrupters” is radically forward-thinking– don’t expect Sequoia Capital to go out of business any time soon.

“When it’s time to scale your company, you still need the big checks that VCs can write,” Singh admit.