Fixed-size, multi-investor angel rounds are such a bad idea for
startups that one wonders why things were ever done that way. One
possibility is that this custom reflects the way investors like to
collude when they can get away with it. But I think the actual
explanation is less sinister. I think angels (and their lawyers)
organized rounds this way in unthinking imitation of VC series A
rounds. In a series A, a fixed-size equity round with a lead makes
sense, because there is usually just one big investor, who is
unequivocally the lead. Fixed-size series A rounds already are
high res. But the more investors you have in a round, the less
sense it makes for everyone to get the same price.
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High Resolution Fundraising s more convincing. It's just not reasonable to expect startups to pick an optimal round size in advance, because that depends on the reactions of investors, and those are impossible to predict. <span>Fixed-size, multi-investor angel rounds are such a bad idea for startups that one wonders why things were ever done that way. One possibility is that this custom reflects the way investors like to collude when they can get away with it. But I think the actual explanation is less sinister. I think angels (and their lawyers) organized rounds this way in unthinking imitation of VC series A rounds. In a series A, a fixed-size equity round with a lead makes sense, because there is usually just one big investor, who is unequivocally the lead. Fixed-size series A rounds already are high res. But the more investors you have in a round, the less sense it makes for everyone to get the same price. The most interesting question here may be what high res fundraising will do to the world of investors. Bolder investors will now get rewarded with lower prices. But more important, in a Summary
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