For most hacker founders though -- $500k is a much better sum to raise than $5 million. Do you really want to have to hire marketing people, give up board seats, give up more of your company than you should, and significantly reduce the % probability of success?

For many founders, raising $5 million is like pouring gasoline all over yourself when you're on fire.

Syndicating a bunch of smart angels who have been there and want to help you may be harder to do, it's probably the right call for most startups.