We’re excited to announce that investors made over $1M in reservations in startups on General Solicitation day.
They’re investing in the same round, on the same terms, as investors like Mitch Kapor, Charlie Cheever and Betaworks.
They’re being educated that most startups lose all of their investor’s money.
They’re paying no fees, just a carry.
And they’re investing as little as $1k per startup, so they can diversify and have a hope of making a profit.
One more thing: 90% of these reservations were in startups that are publicly fundraising.
Syndicates let you invest in startup allocations shared by syndicate leads. Here’s how it works.
Tim decides to invest in a startup and asks for a $250k allocation in the company. He personally takes $25k of the allocation and shares the rest with other investors, charging a 20% carry on the remaining $200K. Tim’s capital and his co-investor’s capital is pooled into a $250K fund which invests in the startup.
12 investors like Tim Ferriss and Jeff Schox have already used Syndicates to raise over $3M for startups. Take a look.
What’s in it for investors?
Investing in Tim’s syndicate is like investing in a VC fund, except Tim is personally providing a much larger portion of the fund than VC’s typically do. And there’s no management fee.
Investors in the syndicate get the benefit of Tim’s early access to startups, ongoing governance and value-add. They get the benefit of the Tim’s experience in picking investments. They don’t have to pay management fees, so their incentives are aligned with Tim’s. And they can invest less than the startup’s minimum—the minimum to invest in the syndicate is usually set much lower.
What’s in it for Tim?
Tim is getting carry for his work, just like a VC. He gets leverage on his personal investments. And he can also make larger investments, which may bring major investor rights and access to startups with higher minimums.
What’s in it for the startup?
Startups get to tap Tim’s network so they get more capital with fewer meetings. They get the attention of an investor who is responsible for 5-10x more than she would have otherwise committed. They get an investor who has an incentive to commit early. And they get to raise money from up to 95 investors, without giving them control or the hassle of putting them all on the cap table.
We’ve been waiting a long time to do this.
You can now browse over 1,000 startups that are raising money publicly.
They’ve got over $75M in commitments. And 84 of them have over $100k committed.
There’s SoundFocus which has commitments from Mitch Kapor and Garry Tan. Spire, which is being syndicated by Jeff Schox, the first investor in Twilio. And Dash, which was incubated by Techstars and has a commitment from Dennis Crowley.
A few things you should know about raising money publicly:
According to TechCrunch, Uber just raised $361M. This is in addition to the millions of dollars I spend each week having them drive me around.
Uber was one of the very first companies to raise part of their round on AngelList, back in June 2010. The company ended up meeting Shervin Pishevar, Mitch Kapor, Jason Calacanis and David Cohen via AngelList and closing a $1.3M seed round.
Shervin later lead a $32M Series B in Uber at Menlo Ventures. (Between his investments in Uber and Cinemagram, Shervin is one of the biggest investors on AngelList, measured by $ deployed into companies sourced via AngelList).
If you’re interested in joining a fast-growing company, Uber is hiring. And for more AngelList grads like Leap Motion, Chartboost and DuckDuckGo, who have gone on to raise big rounds, check out our Done Deals.
But you can’t raise money publicly yet. The new regulations will go into effect sometime in September.
Even then, the SEC is considering new regulations that may make it prohibitive for the typical tech startup to raise money publicly. Hopefully not. We are working on this.
Also, you still can’t raise money from unaccredited investors to “crowdfund” your startup. Whether or not you engage in general solicitation. But this may change next year.
Of course, AngelList will support raising money publicly when the ban on general solicitation lifts.
Invest Online is now available to any startup that has a top-tier lead investor.
Prior to today, startups would apply to use Invest Online and we would select which ones got in. Now it’s a self-service feature for any startup with a good lead.
And, of course, startups can still use AngelList to get meetings with investors and take their investments offline.
What’s Invest Online?
Invest Online lets accredited investors make investments as small as $1K in startups. It gives investors access to startups that normally wouldn’t consider small investments. And it gives startups access to a large pool of investors that want to invest smaller amounts.
Which companies can I invest in?
We’re launching this new version of Invest Online with 28 companies that have top-tier co-investors like Andreessen Horowitz, Mark Cuban and Founders Fund.
What does it cost?
We are running this at cost. Investors pay $250 per investment and the startup pays $10K if the Invest Online campaign is successful.
Protecting online investors
First, don’t invest in startups unless you can afford to lose your money—read our investing guidelines. Second, every startup has a top-tier individual, VC firm or incubator who is investing at least $100K and setting the terms for the round. Third, SecondMarket performs some due diligence on each company.
Over 300 startups on AngelList qualify to use the new version of Invest Online. But only 28 have activated it so far. So how do you tell the other 272 startups that you want to invest online?
We’ve got the feature for you. You can notify any startup that you want to invest online. You’ll get notified if they turn it on.
Say hello to our new embeds:
You can optionally include job openings you’ve posted on AngelList:
Enjoy. And please let us know what kind of embeds you need. We might just build it.
This isn’t exactly new, but we haven’t exactly announced it either. You can now browse valuations on AngelList. The data is for seed-stage companies and is obviously anonymized.
You can also filter by college, incubator, employer, time, location and market.
Our data is neither complete nor perfectly accurate. But it is a great complement to the way you’re probably setting your valuation right now (asking your friends “So, what do you think our valuation is?”)
Yesterday, our new Invest Online feature hit $1M in commitments in the first month. Plus another $12M in offline investments via AngelList in the same time period (investor meets startup on AngelList and invests offline).
3 companies have already finished raising money online. And 7 companies are currently accepting online investments; co-investors in those rounds include David Sacks (founder of Yammer), Garry Tan (partner at Y Combinator), Danny Rimer (partner at Index Ventures) and many other great investors.
Today, we’re also announcing that investors can express interest in investing online in any startup on AngelList through the Invest button or after Following a company.
Once a company lands a top-tier investor, they have the option to accept online investments and interested investors are notified.
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