A tiny minority of historical applicants that we turn down add us to their investor email list and send us regular updates. It is easy to ask ourselves whether these are missed opportunities, given the high-engagement investor communication skills on display.
But when one looks up this application from its original engagement in our Dealum records and reads the attached report, we see an ongoing, abysmal state of affairs for life science startups in development.
This company is using a lot of jargon trying to convey “progress” that has been laborious lab think-work. On the capital front, this company was raising its seed round when it last saw us and is still trying to close that round out – over a two-year raise cycle.
Two of the elements of our standard six-element assessment “VERDICT” are momentum-based. This is further underscored by longstanding Stanford research of startups that exit. Companies must be achieving milestones (development/commercialization momentum) quickly and raising capital quickly. AND the team needs to have industry KOLs AND prior startup experience (especially exit experience) AND a wide moat AND a spectacular solution-market fit. With the exception of only one or two companies, we must note that this year’s (2026) just-released lineup of companies at the ACA conference has an all-time high number of companies that Desert Angels has already met, performed detailed due diligence, and passed on.
It explains why the business of angel investing is such a dumpster fire. The number of startups that meet these pre-indications in our VERDICT matrix is so rare, with some of these getting right to big money and never even seeing angel investors, that there is simply not enough quality deal flow for tens of thousands of individual investors and hundreds of groups to fill an annual agenda of activity. When the “pros” (top quartile VCs) only write 3-4 checks/year, and 1-2 of these might be to companies already in the portfolio, the prior idea, which many, and perhaps most angel investment groups still adhere to, the idea of a large/active angel group making 10-12 investments per year now appears recklessly foolish.
But who knew? Icons in the ACA world, from coast to coast, were still exemplifying this. None of us knew that a sidecar fund like the twelve launched by Desert Angels was doomed from the start to lose money. No angel group has enough top-shelf deal flow to place 10-12 investments in a calendar year with any chance of success, save hoping just one of those investments in every fund vintage is a 30x+ winner (10x isn’t enough) to return an IRR adequate for the risk taken.
We have the ACA’s recent data work. We have, in the wings, a clear explanation of the problem as a matter of social science (not yet published or shareable) that we have been reviewing. We occasionally have decades of our own activity history, including some applications that remained open in our portfolio for 9 months, among the more attractive applications we received. How much evidence needs to pile up to break the status quo dam that we must recognize as a practice that all too often fails to yield any reasonable ROI. Many angel investment groups have come to recognize that survival by group acquisition is failing. Notable large groups have gone silent; some are still hanging on to the birth-by-TTO model, and empire-builders are still trying to convince us that everything is swell and that nothing needs to change. Collaboration attempts have all been one aspirational conversation, and then crickets over the past 2 years running Desert Angels.
It is time to declare the Boomer-built model of angel investing obsolete. Some of its buildings are sparking with the stove gas open and others are smoldering coals, but all are on fire. Seed-stage venture investing will continue, but I suspect that the 1990-2030 age of angel groups will go the way of the many social clubs, and the most likely organic replacement will be 20/30-something-led microVCs that will be no more financially successful than angel groups were, being run by inexperienced business kids clamoring for investors and mass-mediocre deal flows. Like individual angel investors, these micro-VCs will experience high churn and replacement rates at the entity level (they already are). They will chew through a widening participation in the accredited investor population as long as the old 1979 definition is not inflation-adjusted. Family offices are also likely to increase in number (Boomer estates) but will have smaller average AUM over time and will get their hands dirtier doing more screening and investment selection. But as far as I have yet observed, no one has begun to implement a model for investing at the seed stage that is not built on volume of activity and instead invests patiently only in opportunities most likely to succeed, which can only be done with a great deal of fundamental analysis and discipline that too many self-appointed operators have neither the skill set nor the patience for.
‘I want to gamble, and I know I will lose to the house’s advantage because it’s still fun’ is the unspoken sentiment that is our chief impediment to positive reform. Those who refuse to professionalize at this are clogging the system and making it impossible for the fewest of us who want to clean this shit up to find our footing. But I guess there is no one worse than someone who is just spoiling everyone else’s fun, especially when the tourists who can do it with someone else’s money have a title, or leverage other people’s money to earn income, or have a credit-economy salary from activity volume. These hold the keys.