I don't know if there was collusion or not, and I wouldn't dare to offer my uninformed opinion, but with all due respect, saying that there are too many angels for collusion to even be possible doesn't seem right to me.
If there are zillions of angels and all of them are equal, then sure it's probably a very hard market to corner. But from my view, there are hot startups and those startups want the very best angels. I would guess it follows a power law distribution. Startups want money, but they also want name brand money and the powerful connections that come with it.
These angels may miss a few deals here and there to the angels who aren't in on it, but I think they can move the terms in their favor.
I also think your analogy works better the other way around: even though there are almost 5000 US colleges to chose from - some of them extremely accessible - I think the top 10-20 schools could easily collude to extract better terms from students. This is because the name recognition is important.
Apart from name recognition there's also the distinct possibility that the "super angels' " experience and connections in this area means that _whilst in competition with each other_ they're willing to invest at much more generous valuations than those with less ability to evaluate the potential returns from a particular hot startup would consider. If it was possible for them to collude, they can invest on only slightly better terms than the rest of the market would be willing to countenance. It would be equivalent to the industry's top payers agreeing to cap pay rises.
Just because there are alternatives and they're still offering a better deal than everyone else doesn't mean that such market manipulation would be legal or fair.
If there are zillions of angels and all of them are equal, then sure it's probably a very hard market to corner. But from my view, there are hot startups and those startups want the very best angels. I would guess it follows a power law distribution. Startups want money, but they also want name brand money and the powerful connections that come with it.
These angels may miss a few deals here and there to the angels who aren't in on it, but I think they can move the terms in their favor.
I also think your analogy works better the other way around: even though there are almost 5000 US colleges to chose from - some of them extremely accessible - I think the top 10-20 schools could easily collude to extract better terms from students. This is because the name recognition is important.