What if we tried to re-phrase the question: out of the entire pool of valuable angel investors (in terms of what else they bring to the start-up besides their cash investment), how many of them are staying away from investing because they feel "they've been priced out of the market", the fallacy or otherwise of that perception notwithstanding? If they are there, then the point being raised is that they're not being sufficiently utilized, and founders would probably do well to utilize them. A bit like deciding whether to open a Toyota dealership in an area dominated by Maybach dealerships. The issue is not whether or not Maybachs are value for money, but rather that there might be a good market for selling Toyotas.