Ron Conway -  Looks first at the personal characteristics of the entrepreneur and his chemistry with the individual.  Does the entrepreneur have a clear vision?  Does he/she have passion?  Are they flexible, reliable, decisive?  Can they build a team?  Are they good listeners?  Do they lead by example?

Mike Maples – He’s looking for Thunder Lizards; those companies that are hugely disruptive and go on to create and dominate markets.  Over the past few years, on average, 1500 companies a year have gotten funded with only a handful reaching valuations north of $750 million.  He wants to work with that handful.  He’s a loner and not a fighter.  He wants to find companies that are creating markets and have little competition.  He’s addicted to companies that take off.

Josh Schachter -  You have to develop a set of easy to follow rules to invest by and never vary from them.  Invest in what you know.  Josh doesn’t invest under a certain amount, doesn’t like music and secondary franchises, and doesn’t like convertible notes.  Living by these rules allows him to stay focused.  You have to be “long term greedy.”  War is not won by the winners.  War is lost by the losers.

Michael Arrington had come to the AngelConf from a meeting with a top tier VC.  This was the third meeting he’s had recently with a top VC on the same subject.  According to Arrington, these VCs are terrified of the Angel community.  And they have good reason to be.  The weak VCs will be supplanted by Angels. 

The rules of the game have changed.  We are seeing a trend in tech start-ups.  It doesn’t cost as much, or take as long, to build a product or service and distribute it these days.  And with any trend there are bound to be many that jump onto this wave that will drown.  That being said, those that have the proper board and skills are set for a very profitable ride.  With the barrier to entry to this game being low we will see a large amount of flameouts.  There will be an enormous;y wide disparity between the successful Angels and the fakers.  At the end of the day though there will be a large number of ideas that get funded and that’s good for innovation. 

The power is shifting to the entrepreneur.  Those that don’t realize this will be left out in the cold.  Those that do will beneift.  And this is another reason why these Angels play an increasingly important role.  These former founders are entrpreneur-focused.  The good ones place the entrepreneur first and are valuable resources, because they’ve been there before and have their finger on the pulse of the tech community.  

So, how do you tell the good ones from the bad?  Entrepreneurs talk.  Word gets around on who’s helpful and who’s not.  The legitimate Angels are active and structured.  They do deals and they do them at a rapid clip.  Josh Schacter said if you’re not funding at least one deal a month, you’re wasting your time as an Angel investor.  This adds up, because he also said that you should only be funding one company for every thirty to four you look at.  No wonder VCs are nervous.  These Angels are breaking previous stereotypes of Angels.  And these  Super Agels really aren’t Angels at all, at least according to previous denfinitions.  They’re really micro VCs posing as Angels.  They just do it on a smaller and more accessible level.  Whatever the definition though, this new trend of that Angels are supporting is good for innovation and great for the tech community. 

With everything good though, there is froth.  I just read that future hall-of-famer, Steve Nash, is forming an Angel Group.  Is the sign of the top of this trend?  Who knows, but it should be an interesting ride.

Click here to read the complete article:  http://yhoo.it/9s8HMY or watch the interview above.

Here are some of his main points:

• Even if the market roars, an investor can only make so much with only $20,000. Even in a strong bull market, they can make 20% to 30% a year, which is insignificant to a young person.

• Putting money in the market means living with uncertainty. Young people do not want to deal with that kind of stress.

• Someone in their twenties should focus on their education and other investments that will advance their career. Altucher suggests taking classes, brainstorming ideas, starting a website and attending networking events.

• It is also not a bad idea to have $20,000 cash in the bank. It can provide a safety net and peace of mind during a time when many are losing their jobs.

Altucher warns that not every business or idea will work out, but says if you invest in yourself and are persistent, you will eventually find success.

“Take $20,000 and put $5,000 per four ideas exploring them. Something is going to hit. You are going to learn something. The benefits are going to be, not just 20% per year, but 1,000%, 10,000%, 20,000% a year.”

With more than $2 billion of venture capital invested in over 130 startups around the world, Bessemer Venture Partners is one of the leading and most well-known firms in the venture capital industry.  BVP has invested in such notable companies as Staples, Ciena and Skype.  But, just like all other venture capital firms they’ve missed on a few.  They list their misses in an anti-portfolio on their website: http://www.bvp.com/Portfolio/AntiPortfolio.aspx.  This is a list of successful companies they had a chance to invest in, but passed on for one reason or another.  This list includes names, such as Apple, Google and ebay.  When you have the longest running record of success in the venture capital industry, you can list some of the big companies that had a chance to invest in, but passed on.  But, what this tells entrepreneurs is that even if some of the best and brightest pass on funding your idea, it doesn’t necessarily mean that it’s not a good one.

Everyone obsesses about competition when product and execution are so much more important.  And it’s also execution in the right area/sector at a time when businesses or people need your product, and the economics of the market space allow for success.

The macro trends so often outstrip everything else.  Businesses worry so much about their competitors “beating” them when relatively few businesses fail because of competitors.  Most failures can be attributed to failed business models, poor execution, or a solution looking for a problem.  And, relatively few businesses exist in markets where network effects result in winner-take-all.

The importance of industry and market trends is why so many VCs and public market investors use a thematic investing approach.  Unless you can do a hedged trade, who wants to bet against even the losers in a market witnessing tremendous tailwinds.  As an entrepreneur, you don’t have the opportunity to go long a good company in a bad sector, while simultaneously shorting the sector index.

Read more: A rising tide lifts all boats, or enough to eat for everyone | Jon Steinberg http://jonsteinberg.com/2009/05/a-rising-tide-lifts-all-boats-or-enough-to-eat-for-everyone/#ixzz0sCjm5EN7

Thematic investing takes advantage of trends.  Trends provide oppotunities for businesses and investors.  Opportunities yield results.  It’s that simple.  You want to be at the forefront of trend when investing in tech.

Peter Hubert writes at PEHub that in order to understand the upcoming venture capital cycle, we need to look at the industry from the right perspective and put it in the proper context.  Don’t consider the industry in isolation.  He writes that venture capital is highly correlated with the ebbs and flows of the public marketsand therefore, in order to understand what type of cycle venture capital is headed for, we need to determine how healthy the public equity market will be. http://www.pehub.com/75336/learning-to-surf-%e2%80%93-the-ebb-and-flow-that-propels-vc-returns/  

Markets work by supply and demand. VCs convert cash into a supply of stakes in startups. Mr. Market either seeks those stakes with demand or doesn’t. Just like the real economy, customers buy products or they don’t. What’s unsold is inventory stranded on balance sheets.   As an industry, venture capital has historically been highly correlated with the ebbs and flows of the public markets…According to Cambridge Associates, U.S. VC funds averaged 3.82% returns from 1984 to 1990. During the same period, the NASDAQ produced an average 5.56% return. From 1991 to 1999, when VC returned an average 55.48%, the NASDAQ also delivered a robust 32.59% per annum.

But the golden age has gone into reverse: U.S. equities have been decidedly out-of-favor for the decade. The broad S&P 500 index has barely moved in nominal terms over the past decade, and that doesn’t tell the half of it. The S&P 500 currently trades at the level of March 1998, when gold was trading at $302 (currently: $1,230). It’s not much better when you compare U.S. equities against a basket of international currencies or even inflation-adjusted dollars. The most appropriate comp—the NASDAQ, teeming with tech and biotech shares—is 10 years later still down more than 55% from its March 2000 peak. Given venture’s high correlation with the NASDAQ, it should come with little shock that median VC returns would resemble the tech-laden index.

Could market factors be leading to a return of money moving to the public equity markets and therefore a return to good times in the venture capital industry? 

Peter Hubert wonders this in his article:

Might the flood of capital seeking safety in fixed income assets reverse? Will inflation rear its head? Will investors cease tolerating 1% fixed income yields? Will sovereign and municipal bond markets see more buyers or sellers? Is the S&P is undervalued? Will global capital flow back into U.S. equities?

If the answer to some or all of those questions is “yes,” we might be in for a very powerful wave in VC.