People think this is an abstraction. My VC-funded company hired a CEO (who I like) who decided our A-round-funded company was optimally positioned to go head-to-head with Akamai. I saw a board at another company wage a guerilla war against its management team. The threat here is not abstract.
I only mention this because from my immediate perspective it seems easier to raise $100-$500K in NYC than it does to raise $10K from Y Combinator. Which is the better deal? I couldn't tell you.
Pros and cons, of course, but VC funding (especially when the VC gets to set the terms) is a world apart from angel funding.
I have no problems with angel funding (I'm really not all that familiar with it; no company I've been involved with has taken "angel money"), but I do have concerns about any company model that puts first-time founders on a burn-rate runway. There are less perilous ways to build a business.
Really depends on the investor. Some angels explicitly want you to go Series A -> Series B -> $100M -> IPO. Others explicitly want to help founders start cool companies. Some are basically mini-VCs, and others are really founder-friendly. So it's just important for a startup to have the right angels, whichever direction you go.