Is Venture Capital Broken? Why Angel Investors Are Building Another Way
Originally sent to Play Money subscribers · July 2025
Part of our ongoing series on how capital allocation shapes founders, markets, and returns.
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🥂 Last week, one of our Angel investors hosted the most impeccable backyard soiree: summer dining, a brilliantly curated group, and a smart conversation between Lisha Bell of PayPal Ventures and Catherine Bracy, author of World Eaters: How Venture Capital is Cannibalizing the Economy.
It prompted me to try something new here.
‼️ TLDR: World Eaters articulates many of the reasons we built Play Money. If we read it together, we can get the author to join us for a book chat at the end of summer.
Hit reply if you’re interested.
The Emerging Fund Manager Explosion
When I sold my second startup in 2021, it felt like everyone in my network was becoming a VC fund manager.
“Emerging Fund Manager.”
First fund. Usually under $20M.
These people are real fuel for innovation. Different lived experiences. Different pattern recognition.
Everyone assumed I’d start a fund too.
I didn’t.
Not because I didn’t love founders.
Because I could feel something breaking.
- Founders’ needs were changing.
- The original VC model super-scaled until it fractured.
- Shoehorning 10,000 new fund managers into a cottage-industry model was adding chaos.
The most common advice founders get?
“It’s a numbers game. Make a list of 200–300 funds and get warm intros.”
Are you serious?
That’s capitalism’s version of Where’s Waldo.
How Venture Capital “Broke”
There was blue ocean I could see — but I couldn’t articulate what had snapped.
Catherine Bracy did.
In World Eaters, she lays it out clearly:
“For all the talk about innovation, VCs aren’t nearly as outside-the-box as they think. There’s almost no innovation happening inside venture capital itself.”
At the earliest stage, founders don’t know what shape their company will take.
You can spot real problems.
You can spot fast-learning teams.
But tying everything to a model that requires multi-billion-dollar exits?
That warps incentives.
When the only outcome that matters is hypergrowth, we distort what gets built.
Another Way to Fund Innovation
Catherine outlines an alternative path.
I haven’t finished the book yet.
(That’s technically true.)
But I clearly have a POV on “another way.”
We’re building it at Play Money.
Not a fund.
Not just a platform.
A different layer of infrastructure for early-stage capital.
One that:
- Doesn’t require billion-dollar exits
- Doesn’t force founders into 300 intro roadshows
- Doesn’t treat capital like a monoculture
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Get the book: Amazon + Non-Amazon link
30-minute podcast version: Tech Policy Press interview
Extra credit:
- Algo or Artisan w/ Charles Hudson & Mike Ma
- Dan Gray @ Creditstick
- Shameless beach read: Careless People
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Play Money makes angel investing accessible by helping everyday angels build diversified startup portfolios without turning it into a full-time job.
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