More indications of a coming tech boom are showing up. Not so long ago, the angel or seed round would value a company at around $1-2M. With the rise of the SuperAngels and the Cambrian Explosion of interest in consumer Internet deals, seed round values have crept up to $3-4M, levels normally seen with traditional Series A rounds.
Now observers are noticing that they are jumping over the $4M line as well. Two recent deals received around $1M each at values above that $4M line. I know of a number of other financings above that line, but what is striking about these two deals is that they are getting done by newer entrants to this game:
- Hipmunk raised in a “hyper-competitive” round where a cluster of angels drove the values up; previously we had seen this sort of auction coming from traditional VCs after the seed round
- The Pulse iPad app (shown above) raised an angel round from four traditional VCs (Redpoint, Mayfield, Greycroft and Lightspeed), who followed the SuperAngel convention of an uncapped convertible note
Both may be one-off situations, particularly the gang of four VC stepping down to the angel level. Sometimes these types of investments make sense due to relationships and are not the start of a new trend. Nonetheless, it is clear the rapid rise of SuperAngels is disrupting the traditional VC business.