In this morning’s Seattle P-I is a new venture article from John Cook in which he reports that Jeff Schrock, former Real Networks / Yahoo executive, is joining local venture firm Monster Venture Partners.

Cook writes:

Monster Venture Partners is taking a different approach than the big venture firms of Silicon Valley, investing personal funds and doing so in small increments of $300,000 to $1 million. That concept appealed to Schrock, an angel investor who believes there’s a “huge gap” between early-stage seed investments and traditional venture capital.

This is the second time in less than 24 hours I’ve heard mention of the “financing gap” between traditional angels and traditional VC firms. What’s needed, I’ve heard argued, is what might be called the “Third Way” of startup financing, one that combines the smaller dollar amounts of angel investors with the support, rigor, and broad reach that traditional VCs provide.

Michael Rice reported from the recent NWEN Early Stage Investment Forum that “The funding gap is a painful reality here in the Northwest”, but in context it’s clear he’s talking about process and engagement issues, not dollar amounts.

What do you think?