Why Smart Angels Invest Where VCs Won't
Originally sent to Play Money subscribers · June 2026
Part of our ongoing Tuesday series on why the biggest opportunities in angel investing live in sectors VC has written off — and what $9 trillion of new capital means for everyday angels.
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🍒 As much as I grumble about fundraising, it’s been one of the most valuable things I’ve done for the company. I’m seeing the business with 10x clarity: who our customers are, why they keep coming back, and what we’re really building.
Last week I shared it with a VC. He told me the people in our data don’t exist.
-- C2K
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I was pitching a small operator-run fund. Crushed the first meeting. The second partner got on the next call and told me there are no new people who want to invest in startups.
I showed him our data. We literally mint first-time angels with an insane level of precision.
He looked at all of it and said AngelList and Sydecar have had the same number of angels for years. Proof that our market is too niche.
$9 trillion of new individual capital wants to enter alternative investments over the next five years. And this guy, whose literal job is getting people to invest, told me nobody new wants in?
That sounds like patting Robinhood on the head in 2015 and saying Charles Schwab has the market locked up.
You sweet summer child. 🌻
This happens every cycle. The people closest to the game can’t see outside it.
And right now we are in peak funding froth. Over 40% of all VC capital last year went to 10 deals. Folks are flocking to a handful of AI companies and calling everything else a black hole.
Yes, today’s main character on VC Twitter actually said the words "black hole".
You know what’s in that black hole? 🕳️
- CPG: Brands reach $100M revenue w/a quarter of the capital of SaaS. The M&A playbook is well known and always open for business.
- Women’s Health: The sector has the fastest median seed-to-exit of any sector. And no one can convince me that half the market is niche.
- Climate Tech: The gap between non-dilutive funding for IP development and enough commercial traction for institutional money to step is wide. Last year seed deals got cheaper. Acquirers got hungrier, with $170B in M&A across 750 deals in the first half of this decade.
- Family Tech: Seed prices are back to 2017 levels. Disney, Duolingo, and Mattel are all buying.
AI seeds are priced at $50M+ post-money based on revenue gymnastics you’d need a forensic accountant to untangle.
On the flip side, these "out of vogue sectors" have low entry points, highly liquid M&A markets, and they solve very real problems.
"This makes life better" is as load-bearing an investment thesis as "this makes money". That’s an edge institutional capital can never have.
😎 What’s on deck at Play Money? Our first deal from a new family-tech deal lead. A handful of female-founded sustainability companies about to hit our pipeline. And active recruiting for a couple of exceptional female health fund partners.
Black hole? Suck me in!
🎧 Want the spicier version? Last week’s Angels Decoded has the full VC mtg scoop.
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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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