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Illustration: Eniola Odetunde/Axios

Thanks to companies like AngelList and Carta that make it easier than ever to set up small VC funds, a new generation of so-called “super angels” is cropping up — and established venture funds are backing them.

Why it matters: Just like the boom in scout programs a number of years ago, it’s all about the deal flow.

Between the lines: “A founder will go to other operators first before they go to South Park or Sand Hill Road,” one industry insider tells me of larger venture funds' desire to get these entrepreneurs and execs into their networks, either as scouts or by backing their funds.

  • A number of established VC firms are backing other tiny funds, including Sequoia Capital Ventures, Bain Capital Ventures, Menlo Ventures, Lightspeed Venture Partners, Felicis Ventures, and Index Ventures.
  • While some like Bain have more established programs, others invest more ad hoc.

What they’re saying: “We’ve talked about doing a scout program … ultimately this feels more efficient as a process,” Felicis Ventures’ Katie Riester tells me.

  • Felicis has backed about a dozen other funds over the years and has backed four startups it met through them.
  • A partner at another major VC firm says about a fifth to a quarter of new deals come through either the firm’s scout program or the funds it’s backed.

For the super angels themselves, the upside to being a traditional scout for a VC fund is their independence and the ability to make their own name.

  • At the same time, these established firms often act as mentors and even invite them to co-invest in certain deals.

Yes, but: This approach is not new — rather, wider industry trends plus the availability of new tools appear to be allowing this new take on the scout model to flourish.

  • Plus, even some firms that do invest in these small funds caution that they’re not interested in becoming funds-of-funds, suggesting this will remain a niche part of their investments.

Go deeper

UNC race conscious admissions process upheld by judge

Students walk through the campus of the University of North Carolina at Chapel Hill on Aug. 18, 2020 in Chapel Hill, North Carolina. Photo: Melissa Sue Gerrits/Getty Images

The University of North Carolina at Chapel Hill can continue its race conscious admissions process, a federal judge ruled on Monday.

Why it matters: The case could end up in the Supreme Court after the conservative nonprofit Students for Fair Admissions (SFFA) vowed to appeal the judge's ruling that UNC didn't discriminate against against white and Asian American applicants in its policy that it said was designed to increase diversity.

SEC debunks conspiracy theories about meme stock mania

Photo: Alessia Pierdomenico/Bloomberg via Getty Images

The SEC issued its long-awaited report on the meme stock mania, which downplayed the narrative that a "short squeeze" was the primary driver behind GameStop's historic stock moves — and shot down conspiracy theories about the event.

Why it matters: The postmortem was highly anticipated, largely because of what it could hint about what the regulator thinks should be done in wake of the saga. But the report stopped short of specific policy recommendations.

3 hours ago - Politics & Policy

Breaking Biden's diplomatic logjam

Expand chart
Data: Center for Presidential Transition via Congress.gov; Chart: Will Chase/Axios

The logjam for reviewing and confirming President Biden's ambassadorial picks is finally starting to break.

Why it matters: Biden is far behind his predecessors in the rate at which his ambassadorial picks have been confirmed. The Senate Foreign Relations Committee will hold a series of high-profile hearings and votes this week to finally begin chipping away at the backlog.