Coming soon to many seed rounds and Series A near you, and also likely to much of the bootstrapping community: cap tables where literally all of the money comes from software people, not traditional sources (VC funds with non-tech LPs).https://twitter.com/HarveyMultani/status/1220022148636516362 …
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Bluntly, the community can afford it. Napkin math how many accredited investors get how much direct deposited every single payday from AppAmaGooBookSoft alone. 5% of 20% of that is seed rounds for N startups.
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Angel investing continues to be seen as heavily prosocial in the tech community, and it is a status marker in both directions.
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Any rotation away from the SFBA disadvantages firms who don’t want to have to explain to their LPs “Actually we never strictly speaking met this founder we gave $5M of your money to.” and advantages people who can say “Would I spend $50k after Zoom call? Why would that be odd?”
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Tech people get substantial non-pecuniary advantages from investing which traditional investors don’t capture. It can be totally rational to invest in such a way you lose money.
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That is probably *deeply* controversial, but here’s a sketch of the intuition: In 1970, you could reasonably join a golf course hoping to meet other people who played golf for career purposes. Golf balls never return capital.
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Tech people ultimately care about knowing other tech people approximately as much as people who play golf care about knowing other people who play golf. So, what can you spend $X0k on in a socially acceptable manner to repeatedly get close to interesting people in tech?
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And finally, at the end of the day: In a capital rich environment, the cap table is the people the founders enjoy having on the cap table. Who do founders break bread with when they’re *not* raising money? Who do they look up to? Who do they want in their lives for 10+ years?
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End of conversation
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