May 9, 2015 · 3 minutes

What is more exhilarating than venture capitalists, angel investors, and Silicon Valley talking heads spending a nice little Friday in May debating management fees, pro bono rights, and the whims of LPs on the Twitterspere?

Well, it many not have been that enthralling, but it is fascinating reading if you have any interest on the inner workings and logic of VCs, as well as some of the pressures that are rattling the status quo, including challenges from new investment platforms such as AngelList.

The excitement started when Hunter Walk of Homebrew VC tweeted out a couple of comments about VCs, AngelList, and asked some innocuous questions about the capital-gain preferences of investors.

Walk's first tweet created a cascade of Twitter responses — more than 150 response — from folks like Fred Wilson, Semil Shah, Naval Ravikant, and Keith Rabois (as well as Farhad Manjoo looking for someone to explain what the hell everyone was talking about).

While many commenters had great points to make on the value of VCs carry and limited partners' rights, the discussion first veered towards the merits of AngelList — whether or not angel investors had as much "skin in the game" as VCs to be precise — and the pro rata rights of angel investors.

AngelList's Navikant stepped in and dropped his own Tweetstorm within the original, epic Twitter discussion.

Talking to Ravikant this afternoon, the idea that angel investors don't have enough "skin in the game" as he says is a common misconception. Ravikant's point was that VCs rarely lose money because of management fees. "As a venture capitalist, there is literally no way that I can lose money for myself, since the fees are always greater than the general partner commit," he said in an email.

"If I run five syndicated deals and they all lose — highly likely given how rare hits are in seed investing — I will lose my backers' money, plus the money I've invested," he said in the email of those leading Syndicates.

But just as the initial Twitter discussion began to die down, another exploded.

Don't think that the first Twitter blowup stopped Walk; he went on to dig into another "hornet's nest," as he called it:

If you don't know what pro rata rights are, they are the rights for investors to participate in later investment rounds, and often, the opportunity is a part of the initial legal agreement from the early investment. The pro rata issue is one that gets angel investors, who often feel they deserve some benefit for being the first to help a company get off the ground and should have the option to continue investing -- all worked up. The point Walk brings up is whether or not investing money is just a small part of an investor's value or whether they should play an active part in helping the company grow to earn a the opportunity to invest in a follow-on.

Honestly, I don't think there is anything as enlightening into the ins and outs of VC and angel investing as the commentary today. I'm sure there will be plenty of blog posts to follow.

If Twitter could ever figure out a way to monetize the type of rich and truly informative discussions like the ones today, maybe people wouldn't be freaking out about the company's bottom line every quarter.