I think this is really simple answer on the question why VCs are so conservative. They barely understand business they invest in. That's why they look for traction so much! Traction is just a mix of financial metrics, and that's what they really understand. Before you can show a hockey stick chart showing number of visitors, or better revenue or profit, there is no real interest from VC side.

I think the reason why angels become a real drivers of innovation these days is because they invest pre-revenue, and the reason why they do it is because they understand the business they invest in and play an active role in it.

Dimitri, founder www.nuospace.com