Angel investors in startups are disappearing. Here's why.

(TLDR: It's because the math isn't mathing) 

Startup investing follows the power law. One winner returns more than all your other investments combined. To have a real shot at catching that winner, you typically need at least 12 investments. Some data suggests 20+.

Most angels? They do 2-3.

That's not investing. That's gambling with worse odds.

✏️  Let's do the math.

Say you have $50K to deploy:

As an angel:
→ $25K minimum per startup (if you're lucky)
→ You get into 2 companies
→ Probability of hitting a power law winner? Almost zero.

As an LP in an emerging VC fund:
→ $25-50K gets you into a fund
→ That fund invests in 20-30 startups
→ You just 10x'd your diversification for the same capital.

THIS WASN'T POSSIBLE 3 YEARS AGO

Fund minimums used to be $250K+. Often $500K. That's because it was very expensive to run a VC fund, and you could only make it work through the management fees of a very large fund. And a larger fund means larger LPs. 

So, anyone who wanted exposure to startups but couldn't write a $250K check? 

Angel investing was the only option.

In the last few years, AI and the entry of disruptive vendors in the space have made it materially cheaper to operate an institutional-grade VC firm. 

VC funds can now accept tickets as low as $25K. 

A significant shift is happening in the micro-LP space. Former angels are becoming LPs, and first-time investors are writing checks into first-time funds.

The barrier to entry for LPs has significantly lowered.

So the angels who understand the power law are evolving. They're putting their capital into funds to make the math work.

Some will say: "But I want to pick my own deals."

Sure. But do you want to pick, or do you want to win?

What is everyone else seeing? 

---

✍️ Myrto Lalacos
Follow for more on launching, running, and investing in VC firms.

Myrto Lalacos

Launching +60% of the world’s new VC firms | Ex-VC turned VC Builder | Principal at VC Lab

I am so excited to be kicking off yet another Venture Institute cohort, helping - this time - 480 (!!!!) talented individuals around the world prepare to launch a VC fund or start a career in VC! 

This new cohort spans across 70 countries, and countless of professional backgrounds, religions, color and stories. 

We kicked things off with a session with some Venture Institute OGs Sarah Romanko, Connor Sattely and Bianca Schilling all of whom are now leading extremely successful careers in venture. 

The Decile Group family is SO excited to be working with you all. 

So once again, welcome 💜

Welcome to Cohort 6 of Venture Institute! We're excited to kick off orientation with ambitious professionals from 70 countries, all ready to master venture capital.

Over the next 12 weeks, you'll build skills, forge connections, and join a global network that's redefining what it means to be in VC.

To our newest cohort: your journey starts now. We can't wait to see what you build 🚀

👇 Let us know where you are joining Venture Institute from? Drop your country's flag in the comments below!

Welcome to the journey. We're excited to have you here! 🌟

If you are investing in a VC fund for the first time, here is what you need to know: 

More people than ever are becoming Limited Partners (LPs). The minimums are dropping and access is opening up.

Here's what you actually need to look at before writing the check:

📋 DILIGENCE THE MANAGER, NOT JUST THE THESIS

A compelling thesis means nothing if the manager can't execute.

Ask:
→ What's their track record (and can they prove attribution)?
→ How do they source deals, do founders seek them out?
→ What reputation do they have amongst founders?

The manager is everything, don't skip this! 

📄 READ THE LPA (YES, ACTUALLY READ ALL OF IT)

The Limited Partnership Agreement is your operating manual for the next 10+ years.

Look for:
→ Management fee structure (on or off 2% market?) 
→ Carried interest terms (on or off 20% market?) 
→ GP commitment (LPs typically want at least 1%)
→ Maximum portfolio investment percentage
→ Fund duration and extension terms

If you don't understand something, ask. 

🤝 ASK ABOUT SIDE LETTERS

You committed at the same terms as everyone else. Or so you thought.

Some LPs negotiate side letters with better economics, co-invest rights, or fee breaks. No one tells you.

Ask the GP directly: Are there side letters? What terms do other LPs have?

You deserve to know what you're actually signing up for. Ideally they do not have special terms for any one LP. especially when it comes to the returns. 

⚠️ VET THE FUND'S INFRASTRUCTURE

This is where inexperience meets inexperience — and things go wrong.

Ask:
→ Who formed the fund? (A VC-specialized attorney or a generalist?)
→ Who handles fund administration? (Specialized software or QuickBooks?)
→ How are capital calls and K-1s managed?

One botched K-1, one late filing, one compliance issue, and you're stuck in a fund with problems.

💰 UNDERSTAND THE TIMELINE

VC is illiquid. Expect 10 years minimum, often 12.

Your capital gets called over time. Returns come as portfolio companies exit and most returns come from a few winners while most investments fail.

This is a long-term commitment type of asset class. 

The managers who welcome these questions are the ones worth backing.

The ones who dodge them tells you a lot.

What questions do you ask before committing to a fund?

---

✍️ Myrto Lalacos
Follow for more on launching, running, and investing in VC firms.

A firm that didn't exist two years ago opened a VC role.

400 applications in 24 hours.

This is how competitive breaking into VC has become. And yet, most applicants are still preparing for a job that no longer exists.

AI is reshaping the analyst and associate role. The traditional playbook of financial modeling, market sizing, and deck formatting is increasingly being automated or compressed.

VCs now prioritize different skills. 

The skills that were essential for breaking into VC five years ago are no longer sufficient.

This is exactly why we built Venture Institute.

We're helping aspiring VCs develop the skills that actually matter now, not just the theory, but the practice.

We've trained over 1,700 participants from all over the world.  

1 in 5 participants end up getting real firm experience by the end of the program.

Many go on to land full-time roles as analysts, associates, or even venture partners.

Others have launched their own funds.

If you're serious about breaking into VC, you need to stop preparing for yesterday's job. The bar is higher, the competition is fiercer, and the role itself is changing. Venture Institute helps people thrive in this new world.

How are you preparing for the VC role of today?

---

✍️ Myrto Lalacos
Follow for more on launching, working, and investing in VC firms.

You launched your VC fund. Now meet your regulatory to-do list...

Venture capital is a regulated industry, which means paperwork, filings, and deadlines every single year.

And it's the same in every country. 

In Delaware, where 60% of the world's VC funds are domiciled, a standard fund structure there requires annual filings across 4 different government systems: 
- SEC 
- State securities
- Delaware 
- IRS. 

Each with its own portal, login, and deadlines.

Miss one and you're facing penalties, loss of Good Standing, and very awkward conversations with LPs.

Every year you need to file the following: 

📋 REGULATORY FILINGS
→ Form ADV Annual Amendment 
→ Form D amendments if fundraising continues beyond 12 months
→ IARD System Fees 
→ State Blue Sky filings for each state where you have LPs
→ Delaware Registered Agent renewal 

📋 TAX FILINGS
→ Delaware Franchise Tax for all 3 of your firm entities 
→ Form 1065 and K-1s for Fund LP and GP (March 15 or extended to Sept 15)

And here's what most new managers don't realize:

No single lawyer can handle all of this.
No single accountant can either.
Your bank definitely can't.

A corporate attorney might draft your docs but won't know the difference between 506(b) and 506(c). A local accountant might use QuickBooks instead of fund administration software and botch your capital calls. Your registered agent won't remind you about Form ADV deadlines.

This is why no serious emerging manager tries to do this alone, or their 'friend who is a lawyer'.

That's why VCs turn to fund administrator who handle:
✅ All filings across all systems
✅ Deadline tracking and reminders
✅ Coordination with counsel
✅ K-1 preparation and LP reporting

It saves time, it's done properly and nothing is missed.

Your reputation as a new fund manager is everything. One missed filing, one late K-1, one loss of Good Standing, and sadly sophisticated LPs will notice.

The managers who win set up the right infrastructure from day one.

If you found a setup that works or does NOT work share it below, new managers need to hear what's actually working 🙏 

---

✍️ Myrto Lalacos
Follow for more on launching, running, and investing in VC firms.

Raising VC should be as easy as getting a university loan. Full stop. 

And that's every country that cares about its economy. 

The problem with universities is that they teach KNOWLEDGE. 

We're past the era where knowledge alone is what drive the economy and allows its population to make a comfortable living. 

AI can already replicate most of these university-taught skills. 

If governments want their economy to thrive, they shouldn't be relying on systems that teach people KNOWLEDGE. They should be building systems that empower their populations to build ASSETS.

What AI can't replicate is ownership. Knowledge is obsolete. Businesses are assets.

So what does a system like that actually look like?

The good news is the playbook already exists. There is a causal realtionship between the availability of venture capital and strong economies. 

Cities and countries where it's easy to raise capital are the ones thriving.

Here's what those ecosystems have:

👼 ANGEL INVESTORS

These are usually individuals who've built and exited successful tech companies themselves. They understand the returns math and are building large portfolios of small bets to hit the power law.

And they're not just capital. They're mentors. They've been in the founder's seat and know what it takes to build a successful business.

🌱 PRE-SEED FUNDS

Pre-seed investors shouldn't expect revenue or sit there and analyse detailed financial projections. They're backing founders and execution based on limited information. They need to move fast in diligence and write tickets quickly.

💰 SEED FUNDS

By seed, founders have early traction and a clearer picture of the opportunity. Seed investors are underwriting the market and the team's ability to capture it. There should be multiple funds competing for the best founders. In thriving venture ecosystems, the best founders should be choosing who they want on their cap table, not begging for meetings.

📈 SERIES A & LATE STAGE 

Series A and beyond is about scaling what's working. Investors at this stage want repeatable revenue, clear unit economics, and a path to growth. Healthy ecosystems have multiple players here so founders aren't stuck with one option or forced to relocate to find capital.

🚀 ACCELERATORS & VENTURE STUDIOS

Programs that help founders get VC-ready. Building the teams, networks, and traction needed to grow a company. 

🏁 EXIT CAPITAL

Founder builds with an exit in mind. Healthy ecosystems have active acquirers, growth equity players, and (ideally!) public market pathways. Without exit capital, the startup value wanes or leaves the ecosystem.

When all of these pieces exist in one place talent stays, companies scale and wealth gets created locally.

Most ecosystems have fragments. A good accelerator here. A few angels there. But gaps everywhere else.

What's your local ecosystem doing well? What do you want to see more of?

---

✍️ Myrto Lalacos
Follow for more on launching, running, and investing in VC firms.

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