Angel vs. VC debate misses the point

The big change in venture capital is about access. Not angels.

Each day, there seems to be a new online discussion of angel investors vs. venture capitalists. Or super-angels vs. micro-VCs. Or micro-VCs vs. traditional VCs.

At this point, it's devolved into a debate over the merits of dodge ball vs. doctor dodge ball. Sure there's a distinction, but it's without a larger difference.

Take a look at Benchmark Capital, which I think we'd all agree is a stereotypical venture capital firm. It raised around $85 million for its debut fund in 1995, or just $11.5 million more than Mike Maples just secured for his new Floodgate fund. Considering that consumer Internet companies cost more to launch back in 1995, each 2010 Floodgate dollar is actually worth more than was each 1995 Benchmark dollar.

So was Benchmark a micro-VC firm? Or is Maples a traditional venture capitalist?

The correct answer is C: Who cares?

What this tired contest obscures is that there really has been a VC market sea change over the past two years – one that has little to do with marketing/self-identification. Instead, it has to do with access.

After the dotcom bubble burst in 2001, the most common entrepreneurial complaint about venture capitalists was that they were impossible to find. You either had to be plugged into the old boy network, or suffer through fresh-faced associates who may – or may not – be in their partner's favor that week.

Today, however, meeting a venture capitalist is often as easy as filling out an "office hours" spreadsheet. Here in Boston, there's even something called The Venture Café, where VCs can give talks and meet with local entrepreneurs. I'm not saying that everyone can get funded, but most everyone can get an audience (at least if you're focused on IT and willing to hop a plane to SF, BOS or NYC).

To me, this type of access could revive the entire venture capital market.

First, more access means more entrepreneurs -- particularly folks who have believed that their skinny Rolodexes weighed more than their promising ideas. VC accessibility should right that scale.

Not just more entrepreneurs, but also a more diverse group of entrepreneurs. Many of the best companies come out of nowhere from former nobodies (Google, Facebook, etc), and VCs will be able to supplement their existing networks with new ones.

And, assuming most venture capitalists are smarter than monkeys with darts, these new networks should improve returns. Not in every case, but in the aggregate.

You know the aggregate. It's the place where many institutional investors have given up on venture capital as an asset class. Call me a dreamer, but I think they will soon be reason to reconsider.