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'Super Angels' Shake Up Venture Capital

Just read a good article in BusinessWeek titled "Super Angels Shake Up Venture Capital" about how new, smaller venture capital funds are filling the gap in early-stage venture funding.  The article focuses on Josh Kopelman's First Round Capital.  The "super-angels" are basically just early-stage venture funds that are near or under $100 million.  Kopelman argues that the economics of large venture funds ($1 billion+) aren't sustainable, particularly in this economy.  Most of these funds need to return 3x in three years (for a 20% annual return).  With a $1 billion fund, that means you need your investments to have exits in excess of $15 billion (assuming you're invested at 20%).  Given there are no IPO's these days, it's tough to have those kinds of exits.  Makes sense I suppose for investments that don't need much capital to get going (IT, web, etc.).  But it seems the mega-funds still have their place.  To get an alternative energy start-up off the ground, for example, takes hundreds of millions of dollars.  The exits might be further out, but they'll likely be bigger.
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