I don't think it's purely that. VC demo days may not be the best place for someone with modest assets to find something they want to spend $10k on. They might have better luck talking to their friends, for example, or friends of their friends. The angel restrictions don't apply to those cases, either: it's only really official solicitations and funding rounds for which there are restrictions. If a few people get together and want to put in $10k each to a business one of their friends is starting, there is no law against that. It long predates tech startups, too; plenty of restaurants, dry-cleaners, and other traditional small businesses get their seed funding that way.