Lessons From Silicon Valley VC Legend Don Valentine
With all the fuss surrounding the recent “AngelGate” meetings and the tension between angels and super-angels and traditional venture funds, it's instructive to listen to one of the legends of the Silicon Valley VC business …
Context & Ripple Effects
GigaOM's sit-down with Don Valentine arrives mid-fallout from the AngelGate meetings, where the confirmed friction among angels, super-angels, and traditional venture funds over seed-stage deals was still raw. It is also the third act in a running argument this corpus has tracked since at least March 2007, when TechCrunch asked whether a reckoning day for venture capitalists was coming.
The January 2010 TechCrunch piece urging VCs to take their own advice set up the same critique from inside the industry; Valentine's lessons-from-a-legend format answers it from the top of the establishment, giving traditional funds a veteran's authority at exactly the moment the super-angel model is challenging them for the first check into startups.
First-order effects
- Valentine's account hands traditional VC firms a ready-made rebuttal to super-angel criticism during the AngelGate standoff, reframing the fight as discipline versus deal-chasing rather than old guard versus new.
- Founders weighing an angel round against a fund term sheet get a high-profile set of selection criteria from Sequoia's founder precisely when the two camps are competing hardest for seed allocations.
Second-order effects
- Super-angels face pressure to demonstrate that their smaller checks and faster cadence produce outcomes comparable to established funds, pushing both sides to sharpen how they price and structure seed rounds.
- The public spat pulls limited partners and founders deeper into the debate over who deserves early-stage allocation, raising the reputational stakes for every firm caught between the camps.
Third-order effects
- If the pattern holds, early-stage capital stratifies into distinct tiers — angels writing first checks, funds arriving later at higher prices — with each tier defending its economics through public argument rather than quiet coexistence.
- The recurrence of these legitimacy crises across the corpus (2007's reckoning question, 2010's advice-to-VCs piece, now AngelGate) suggests the industry re-litigates who should fund the first check every few years, making such episodes cyclical rather than exceptional.
The trend: Early-stage venture capital periodically fractures over who writes the first check, with each fracture forcing angels, super-angels, and traditional funds to publicly rejustify their models.