{"id":341059,"date":"2017-05-16T20:16:25","date_gmt":"2017-05-16T12:16:25","guid":{"rendered":"http:\/\/techcrunch.com\/?p=1490538"},"modified":"2017-05-16T20:16:25","modified_gmt":"2017-05-16T12:16:25","slug":"angellist-just-launched-full-fledged-venture-funds","status":"publish","type":"post","link":"https:\/\/people.utm.my\/asmawisham\/angellist-just-launched-full-fledged-venture-funds\/","title":{"rendered":"AngelList just launched full-fledged venture funds"},"content":{"rendered":"

<\/p>\n

According to AngelList<\/a>, the startup\u00a0funding and recruiting platform, the number of companies being minted continues to far exceed the numbers of funds that can support them at the Series A and even the seed stage. Meanwhile, angel investors don\u2019t necessarily have enough capital, particularly those\u00a0who may be respected operators but haven\u2019t yet enjoyed a major liquidity event yet, meaning their wealth continues to be tied up in their companies.<\/p>\n

That\u2019s the argument for a new twist on AngelList: Angel Funds, or venture funds for angel investors\u00a0who will be\u00a0wholly supported by AngelList on the backend, as well as provided $35 million in funding from AngelList for the initiative, via a second Maiden Lane fund. (The firm\u2019s first Maiden Lane fund was a $25 million<\/a> vehicle\u00a0that was similarly created to provide some money to active angels on the platform.)<\/p>\n

Not just anyone can create a fund on AngelList\u00a0\u2014 yet.\u00a0The firm has for a couple of years been quietly testing out the idea with investors who AngelList has already tracked and supported for some time and it remains focused on them, seemingly. Indeed, a\u00a0new spate of so-called deal leads includes serial entrepreneur Rick Marini; social entrepreneur Shiza Shahid; and Product Hunt founder Ryan Hoover. (AngelList acquired Product Hunt last year for a reported $20 million<\/a> and continues to operate it independently for now.)<\/p>\n

Either way, creating full-fledged funds is a seemingly\u00a0natural development for AngelList, which in late 2013<\/a> introduced its now-popular Syndicates program\u00a0that allows angel investors to gather capital from fellow investors and plug it into companies on a deal-by-deal basis.<\/p>\n

To date, those angels have raised $540 million and invested that money in 1,400 companies.<\/p>\n

Now, AngelList may spin Syndicates as a product for newer angels and backers looking to leap into the world of startup investing, while\u00a0marketing its Angel Funds product to\u00a0slightly more sophisticated investors.<\/p>\n

Here\u2019s how it works: Each \u201cfund manager\u201d receives\u00a0between $500,000 and $1 million from AngelList, along with additional venture fund partners and their own backers\u00a0(if they have any). They\u2019re expected to invest that capital over a six- to 12-month-long period, though AngelList cofounder Naval Ravikant tells us it\u2019s fine if it takes these mini general partners longer than that to deploy the capital.<\/p>\n

The deal leads will then earn 15 percent of the profits from any deal, and another 5 percent will go to AngelList. (If a deal lead brings in a significant amount of capital from investors other than AngelList, AngelList\u00a0will take a percentage as small as 2.5 percent, says Ravikant.)<\/p>\n

AngelList also has partners in its experimental initiatives, including Accomplice, Foundation Capital, Crosslink Capital, and Bain Capital Ventures.<\/p>\n

Bain Capital, for example, says it will invest $2 million to $5 million\u00a0per year to sponsor angel investors on the AngelList platform, \u201cin effect acknowledging, participating in, and enabling the gradual disruption of the venture capital industry,\u201d says managing director Salil Deshpande, who will lead the program on behalf of his firm.<\/p>\n

Deshpande says Bain\u00a0will pick and choose the operators it wants to back. In other words, the aforementioned venture firms\u00a0aren\u2019t expected to fund exactly the same operators as AngelList chooses to back.<\/p>\n

He also says Bain\u00a0hopes to convince \u201cgreat angel investors who we already know and will find in the future to get set up as microfunds on AngelList.\u201d He adds\u00a0that in some cases, Bain might even be the sole limited partner in an angel fund, underscoring the flexibility of AngelList\u2019s new product.<\/p>\n

Asked what he\u2019s telling his own investors about why Bain is getting involved in Angel Funds \u2014 you could see some firms viewing the development with apprehension \u2014 Deshpande says it\u2019s actually pretty simple. \u201cWe\u00a0\u2014 I, my firm, and venture capitalists as a class\u00a0\u2014 are always looking to fund disruptive models in every industry. Why not apply the same logic to the venture industry?\u201d<\/p>\n

Featured Image: MarcoSchmidt.net\/Moment\/Getty Images<\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

\"\" According to AngelList, the startup\u00a0funding and recruiting platform, the number of companies being minted continues to far exceed the numbers of funds that can support them at the Series A and even the seed stage. Meanwhile, angel investors don’t necessarily have enough capital, particularly those\u00a0who may be respected operators but haven’t yet enjoyed a major liquidity event… Read More<\/a><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n

\"\"\/ <\/p>\n","protected":false},"author":5817,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[25],"tags":[59,66,26],"class_list":["post-341059","post","type-post","status-publish","format-standard","hentry","category-technology","tag-media","tag-techcrunch","tag-technology"],"_links":{"self":[{"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/posts\/341059","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/users\/5817"}],"replies":[{"embeddable":true,"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/comments?post=341059"}],"version-history":[{"count":0,"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/posts\/341059\/revisions"}],"wp:attachment":[{"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/media?parent=341059"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/categories?post=341059"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/tags?post=341059"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}