Chris Dixon has an interesting post entitled “It’s not that seed investors are smarter – it’s that entrepreneurs are.“  He’s reacting to a couple of other posts which speculate that there might be a seed fund crash looming and another suggesting that seed funds claim they’re smarter and as a result will outlast the VC’s.

Chris points out that smart entrepreneurs can get money from seed funds with less dilution early on.  For the most part, I think he’s right, but you need to take into account the circumstances and be willing to put in the work to convince the angels to invest.

Good candidates for seed capital are ones that are not going to need that much total capital to succeed or can make lots of meaningful progress with limited resources and then raise the bigger money they need.

If you know you’re going to need a lot of capital, VC’s can be a better choice because they have the capacity to put lots more money to work in follow on rounds that you won’t be able to get from seed investors.

The smart entreprenuer will examine their situation and find the right kind of money for their company’s needs.