As someone who started as an angel investor and now works as a full-time investor, I've seen both sides of the early-stage funding equation. There's a fundamental difference between venture scouting and traditional angel investing that founders need to understand.
The difference comes down to skin in the game.
Angel investing used to mean putting your own capital at risk. You wrote a check from your personal account because you believed in a founder before everyone else. The signal was clear — credibility, network, and hard-earned money backing a bet.
That credibility had weight because it cost something.
Now, scout programs run by mega-funds have changed the equation. A scout gets $200K–$250K annually to deploy. They write you a $20K check and call themselves an angel investor.
But the money isn't theirs. And that changes everything.
For the fund, scout programs serve as lead generation operations. Partners get access and information rights into early-stage companies, allowing them to track promising startups and potentially invest at later rounds with better information than competitors.
What's in it for the scout? Free capital, big-name fund brand, and zero personal risk.
The result: scouts deploy into high-risk bets with house money, then add personal capital only when conviction is high. You might get $50K of scout money and $10K of their own.
That's not conviction — that's risk-free lottery tickets.
What founders should look for
Ask every "angel" investor one question: How much of this check is your own money?
Real angel investors write personal checks because their success depends on yours. They show up. They help. They have skin in the game.
Scout money isn't inherently bad — it's just different. You're getting fund access with no follow-on guarantees, limited engagement, and a cap table entry that signals less than you think.
The bar is simple: skin in the game.
Know the difference before you take the money.
/k