Thoughts on startups by investors that
fund them & entrepreneurs that run them

A Quick Reminder of the Roots of Angel Investment

I just picked up on a great reminder of how “it all” got started: Gordon Moore and eight others formed Fairchild Semiconductor in 1957, and how that led to the model for outside investment:

Little to anyone’s knowledge at the time, how it was formed would set the model for almost every Silicon Valley company that would follow it; unleashing a wave of innovation that continues to this day. Besides inventing the first practical microchip, Fairchild was also the first venture backed startup.A Quick Reminder of the Roots of Angel Investment

Most of us grew up taking the idea of the investment path for granted. By the time I got into the Silicon Valley tech world, in the late 1970s, the model was pretty solid. By the time I started with a San Jose high-tech planning and consulting firm in 1981, I and every consultant I worked with was focused on developing my product, and my business plan along with it, and getting funded.

Which reminds me of those early days at Comdex, in the early 1980s, when every founder who could scrape up the money would take a booth at Comdex and pitch the great new idea. The booth was like the lottery ticket: buying into the dream. It gave us the magic of “what if.”

Here’s more from that post, which, by the way, is from How Gordon Moore Invented the Talent Economy and Changed The World on PandoDaily:

The result of this inverted capital system is that the risk for entrepreneurs has largely been removed. Entrepreneurs in Silicon Valley love to talk about how they are different than the rest of the world because they are “pirates” and have a greater tolerance for risk, when in reality the bulk of the risk has simply been transferred to the venture capital LPs. Despite the smaller amount of money at play, a family who mortgages their home to open a restaurant has taken a far bigger relative risk than most entrepreneurs in the Valley. The difference is they don’t benefit from living in a talent driven economy where capital is willing to gamble on them.

And that is what we’re doing, still, 55 years later, at specifically, and with angel investment in general. We’re not quite as rarified as the true venture capital because the distinction between angel and VC money is that it’s our own money. When it works, everybody wins.



All opinions expressed are those of the author,  and do not necessarily represent those of Gust.

Written by Tim Berry

user Tim Berry

Tim is the founder of Palo Alto Software and, the co-founder of Borland International, and the official business planning coach at He has been called the "Obi-wan Kenobe of business planning" and "The Father of Business Planning." He is a serial author of books and software on business planning.

prev next

You might also be interested in

The UrbanTech Movement is Transforming Cities

Urbanization is a defining process of modern life.

More than half of the world’s population now lives in cities, and the number of urban citizens around the world is projected to rise to 66% by 2050.

In the US, over 80% of the population lives in urban areas with 1 in 7 Americans living in New York, Los Angeles and

Read more >

Angel Investors Spotlight: An Inside Look at Hudson Valley Startup Fund’s Investment Process & Advice for Founders

Hudson Valley Startup Fund brings together a network of the region’s successful business and community leaders to give back, supporting the launch of the next Hudson Valley visionaries. We sat down with fund managers Chad Gomes, Johnny LeHane and Paul Hakim as they shared insights into their investment process, what they look for in both group members and startups, and

Read more >

The Right Startup Advisors Are As Valuable As Money

If you are a new entrepreneur, or entering a new business area, it’s always worth your time to assemble an Advisory Board of two or three executives who have travelled that road before. You need them before you need funding, and if you select the wrong people, or use them incorrectly, no amount of money will likely save your startup.

Read more >

How do I get in touch with investors/funds with just an idea and no product?

There are many wonderful ideas, and they are not necessarily easy to come up with. So congratulations on having thought of one!


“Having value” and “Being fundable” are two completely different things. What the more experienced responders here are saying is completely accurate: while a good idea is usually a necessary ingredient for the formation of a good company, it is

Read more >

Is there an incubator for aspiring Angel Investors or VCs?

No, but there are several sets of courses on angel investing that can provide a good base from which to start. The most comprehensive and best known is the Power of Angel Investing seminar series developed by the Angel Resource Institute (formerly known as the Angel Capital Education Foundation, and prior to that part of the Angel Capital Association). It

Read more >