I have watched Jim Andelman blow out his personal life to help build spreadsheet models for one of our co-investments at a critical inflection point. And I have witnessed this from nearly all of my peer group. Why? I sit on less than 10 boards precisely so that I can be deeply involved when I’m most needed. Call any CEO that has me as a lead and they’ll tell you that I’ve been on midnight phone calls the night before big meetings acting as a sparring partner. interviewing critical hires at a time where they have 3 other offersĪnd much more.M&A discussions (where your company is buying or being bought).existential threats (Apple announced they are competing directly with you).lack of traction, lack of downstream financing availability.That means sitting on boards and helping entrepreneurs to handle the most difficult things that pop up like: VCs take their time precisely for the reason Fred articulates - they play the role of “lead investor.” Jason, Kevin and Dave can move an order-of-magnitude faster than VCs and sometimes this is a good thing for entrepreneurs.īut as with many people who have a vested interest in fast rounds being assembled, they don’t quite get why it is so important that VCs actually take their time. It’s hard to be a great lead investorīoth are right. They will have to help get the next round done. They will have to negotiate price and terms. They will have to step up before anyone else does. “It also means that they will have to learn to lead and lead well. That means if we collaborated on a project we can do an A-Round after a brief conference call.” The three of us have $1M in backers in the first week. the bottom half of VCs will now be wholesale replaced by folks like Kevin Rose, Dave Morin and myself. In Jason’s mind half of the VC industry will now disappear as entrepreneurs flock to him and to Dave Morin for their money If you don’t know, VCs end up writing sizable checks into their own funds, which is important in better aligning interests. This is the same way VC firms work, by the way.
SYNDICATE PROJECT SNAPCHAT SKIN
Smartly AngelList requires a Syndicate lead to actually have their own money in the deal so they can’t just be packaging and taking fees - they actually have to put skin in the game. AngelList Syndicate leads don’t take any fees on the investment, which should help with returns. While VCs usually take 20% carry on their funds (you get no profit until you’ve returned your investment fund and then share 20% of the upside after that), AngelList Syndicate Leads take 15% (AngelList itself takes the other 5%). The syndicate lead can then take “carry” on the profits generated from the investment, turning some syndicate leads into MicroVCs.
It certainly shouldn’t be a proxy for good judgment.ĪngelList Syndicates 101: While “AngelList Classic” was ‘each angel for himself’ - syndicates allows an active angel to form a group of like-minded investors to invest together in a deal or deals. As an angel you can look for the social proof in deals “Dave Morin is investing …” to make your decision. It should help some entrepreneurs to better access early-stage capital and should allow some angel investors better access to deal flow. I have a slightly different take on why I find it valuable.įor starters, what is AngelList Syndicates?ĪngelList 101: As you know, AngelList is a platform where angels can invest in semi-screened tech deals. If it gets broader adoption I think it is a big deal. Is AngelList Syndicates really such a big deal? I had a chance to discuss AngelList Syndicates with Naval at Michael Kim’s Cendana LP/VC conference on a panel with Naval, Roger Ehrenberg (IA Ventures) and Mike Brown, Jr. Many of the good and great of our industry are talking about AngelList. following” in funding rounds play different roles and have different skills. angel.”Īnd even the venerable Fred Wilson weighed in with how people “ leading vs. My favorite new VC blogger, Hunter Walk, weighed in with some thoughtful comments about how Syndicates might actually pit, “ angel vs. But Jason is one of the smartest thinkers in our industry so while style points in his eye-poking post might be low, he’s definitely scratching at something important. If you track the venture capital industry it would be hard to miss the conversation going on this week over AngelList “Syndicates.”įrom the hyperbolic Jason Calacanis weighing in that “The petty VC’s did everything to deride ” as though the industry was collectively shitting its pants that AngelList was going to put us out of business.
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