Very early-stage funds are scooping up allocations to venture capital as companies like StepStone, Cendana Capital and AMG National Trust Bank put their money into super-angel funds, reports the WSJ. While the big name VC investors, such as Accel and Khosla Ventures, continue raised large funds, super angel funds seem to be growing in appeal. SoftTechVC, founded by Jeff Clavier, is the latest of this type to close a new fund. Super angels typically make many smaller investments and also invest their own money.
It is a trend that WSJ has been following. In an article in 2010, it listed several new angel funds that had closed fundraising, including Aydin Senkut, a former Google executive, raised a USD40 million super-angel fund with LPs that included Peter Thiel, a tech entrepreneur turned investor. Another ex-Googler, Chris Sacca, raised a USD8.5 million fund in June. Baseline Ventures closed two new micro VC funds for a total of USD100 million in the same year.
The success of angels that backed the likes of Facebook Inc., Mint.com and Zynga when traditional venture capitalists were holding back on such deals is fueling interest from institutional investors. They also charge lower fees and acquire companies at a lower valuation, says one LP in the report. WSJ says angel funds raised nearly USD1.6 billion from around 80 institutions, citing data from Trusted Insight, a social network for institutional investors.