Angel investors almost never provide the bulk of the capital for a startup. We provide initial money, advise, and introductions to help raise more. So, yes, I expect the bulk of the "heavy capital" to come from institutional investors in later rounds.
Also note that I invest in follow-on rounds, so my total investment in a startup might get much larger than $250k.
All of the above. Prove your team is credible and your idea is solid and the only thing holding you back is the money. Even if you don't have the capital to build the full-scale thing, you can still make a lot of progress on the cheap: conduct research, model your business, test components, do user testing, get LOIs from customers, line up your first few hires, and so on.
YC invested a small amount in a supersonic airplane company and a nuclear power company. Ostensibly, you can start proving that people want what you are building and developing technology before going to market.
They want to get in early, get a certain % of equity before the larger capital rounds are necessary to scale or build a technology to a useful scale - and not afraid of investing in that, though what equity they expect for that, is a missing part to the equation.
Angel investors almost never provide the bulk of the capital for a startup. We provide initial money, advise, and introductions to help raise more. So, yes, I expect the bulk of the "heavy capital" to come from institutional investors in later rounds.
Also note that I invest in follow-on rounds, so my total investment in a startup might get much larger than $250k.