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AngelList Braces for Rainy Days as Startup Seed Funding Falls
- mixedbit 10y agoIs seed funding or seed funding through AngelList falling?
- benmathes 10y agoThe article quotes CB Insights. CB Insights covers all dealflow (that they know of), not just AngelList.
- daxorid 10y agoThis link is just e-commerce, but chatter is the phenomenon is across the board: https://www.cbinsights.com/blog/e-commerce-deals-drop-q2-2016/ https://www.cbinsights.com/blog/e-commerce-deals-drop-q2-201... It's effectively Q4 of 1999 and I couldn't be happier.
- deleted 10y ago[deleted]
- rch 10y agoWeird article. AngelList is raising money to make new investments and reports an unrealized 46% IRR, and that somehow makes for a gloomy story.
- daxorid 10y agoAre you seriously suggesting that 46% unrealized gains for a primarily illiquid equity portfolio heading into rate hikes is a good thing? Unrealized gains are meaningless without liquidity.
- hkmurakami 10y agoThe best funds and GPs seem to consistently talk down their unrealized gains as paper gains that need to be steeply discounted. They cast doubt onto themselves willingly, preaching instead to look at cash on cash returns. Take that as you may.
- nivi 10y agoThe real story is 46% unrealized returns on 2013 syndicate investments. Which is in the upper top quartile of VC. And A-List, a premium recruiting product for busy companies. That complements our free recruiting product with 180K active candidates. Down markets are a good time to invest, but we're not anticipating one. http://angel.co/returns http://angel.co/returns http://alist.co http://alist.co
- tedmiston 10y agoCare to elaborate on the methodology for how you pick companies? Does AngelList act like its own VC internally?
- nivi 10y agoThe fund invests in a subset of syndicated deals. About half of them historically. The investment team consists of experienced investors including Naval (my co-founder). Details here https://angel.co/access-fund https://angel.co/access-fund
- hkmurakami 10y agoThat's a nice advantage you have going -- normally access to the best deals is hard to come by, but by providing the tools by which stand out individuals can achieve leverage in their own deal making through syndication (you're both a technology provider and a channel marketing partner to them), you get their deal flow in return.
- driverdan 10y ago46% unrealized returns based on follow on round valuations. Take that as you wish.
- benmathes 10y ago"china" and "bubble" makes for more clickable headlines?
- api 10y agoIf it bleeds it leads. If it doesn't bleed make it sound like it does. Positive articles get no clicks.
- deleted 10y ago[deleted]
- let1kbl00m 10y agoYou can't even raise money on AngelList. It's just yet another shitty (okay, decent) jobs site. Why the hell AngelList can't create Kickerstart-for-Startups after all these years and significant funding is beyond comprehension. 1. Have startups fill out a YC-like applications. 2. Get investors to write the good checks. If AngelList can't do this then it doesn't need to exist.
- sotojuan 10y agoAngel List the site is fine, but they really need some sort of verification or moderation. When I was looking for an internship there were a bunch of sketchy non-companies willing to pay me... $0. After I graduated it was easier to find real companies, but then it's just the same as other job sites with companies that get back to you months after applying. The design and look of the site comes off as more professional or trustable than other places, but it's not curated. At least force people to be honest about a lack of pay. With of all that said... two of the three jobs I've held were found there.
- cloudjacker 10y agoever try a recruitment agency?
- sotojuan 10y agoNope. Like I said, I was actually successful with Angel List—you just have to have a good profile and either write good introductions or contact the company directly. It could just use a cleanup and moderation.
- cloudjacker 10y agoYou should try a recruitment agency. What you went through is nothing to brag about.
- sotojuan 10y ago
- tedmiston 10y ago> Meanwhile, AngelList is adding new ways for people to get into private-company investing. With some 600 startups expected to raise money through the website next year, AngelList said it’s creating a sort of index fund for young companies that will hold shares in 100 to 200 startups. Investors can buy a share of the fund, called the Access Fund, for $100,000 or more. This could be interesting. I wonder if it will be restricted to accredited investors or offered to the layman? As always, of course there are no guarantees in startup returns, but spread over that many companies... well, I'm not sure what to expect. I guess it all depends on the returns and how they decide to pick companies. It could be a cool new take on index investing. Then again, I became wary of most things "cool" and "new" in investing.
- iLoch 10y agoYou may be interested in this: https://www.sec.gov/news/pressrelease/2015-249.html https://www.sec.gov/news/pressrelease/2015-249.html
- andreasklinger 10y agoAn "index fund" for early stage fund is extremely interesting. Given their transparency to investments it's a very good combination.
- hkmurakami 10y agoYou'd need to register the securities with the SEC of your going after non-accredited investors. I wonder if Angellist is going to go through that trouble. One big advantage of only having accredited investors is that it allows you to not have to make such regulatory filings.
- swanson 10y ago> Investors can buy a share of the fund, called the Access Fund, for $100,000 or more. This is really interesting to me, but I wish it were at a $10k level. That would be a no-brainer shift for me to move some money going into Vanguard into this, but I'm in that weird spot where I'm not rich enough to have $100k to toss around but am maxing out a Roth IRA and looking for more upside.
- hkmurakami 10y agoBe careful to examine what's actually in the fund as your underlying. This isn't like buying the S&P500 where the sector exposure is well defined. One "startup index fund" can perform very disparately from another "startup index fund". edit: If there's data that shows the performance of a basket of random 100 company samples being equivalent to any number of other random 100 company samples, then I am happy to admit that I am mistaken in this regard.
- swanson 10y agoYep -- I understand what I'm buying (well, not buying yet...). Something like this would be a great for a Taleb-esque 90/10 barbell I think -- 90% in target-date vanguard funds and 10% in startup investments by proxy.
- kriro 10y agoDidn't Taleb advocate cash holdings (90%) and high risk investing (10%). I always though that 90% cash was a pretty whacky idea and personally just stick to portfolio theory. I think your plan (substitution index funds for cash) is already a lot better than what Taleb suggested.
- mapleoin 10y agoTaleb considers the stock-market at large to be extremely risky. He advocates the exact opposite of keeping 90% of your assets in the stock market.
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- malchow 10y agoThe boom/bust assumption undergirding this Bloomberg article is belied by what AL is itself doing –– creating instruments that allow the private tech capital market to expand and contract in a fashion that is smoother and less stepwise.
- mangeletti 10y agoI'm going to make a prediction. This isn't going to be popular, and it's only my opinion and doesn't constitute advice: This fund will not earn its investors a positive return.
- dsr_ 10y agoNot a great prediction unless you give a time window, too. 50% within a month? Six months? a year?
- mangeletti 10y agoThanks. I simplified the statement.
- tedmiston 10y agoAnd the short term doesn't matter... 8–10 years, or whenever every company fails, sells, or IPOs.
- callmeed 10y agonegative return is a thing
- mangeletti 10y agoThanks. I updated the comment.
- kapilkale 10y agoOh man, I'd take this bet! Loser donates money to the winner's charity of choice. Pick an amount up to $200, and tweet @kapil so it's in the public record.
- mangeletti 10y agoHey, I got an HN Replies email before you changed it from $500 to $200... :) Just kidding. Ok, let's do this. $200 it is, but you have to pick your charity now, and the timeframe for a return has to be sufficiently short such that $200 can still at least buy a mosquito net or something. My charity choice is the US Treasury. Also, HN is fine (my real name / twitter / github are in my profile). P.S. You didn't ask why I thought it wouldn't return a profit. It's not because I disbelieve in your company (you guys have more startup data than just about anyone).
- logicallee 10y agothis is absolutely ridiculous. there is next to no seed funding in existence. Let me tell you how the seed market for startups is: imagine you had a orchard, right, but instead of apples it grew dollar bills, and you just had to water them or they wouldn't grow. Under this scenario a guy with acres of dollar-tree bills could not get funding to water them with some kind of farm equipment. That's the state of the startup world. You read all those PG essays about not dying? About bootstrapping? Well because it turns out the only way to capitalize a typical startup is to stand in front of your dollar-bill tree and urinate. Or organize some kind of free sporting event with the side effect of making people go piss on your trees. Then 97% of your trees die except the 5 you pissed on, but you can take them to the bank and next season repeat. That's how bad startup seed funding is. You could not literally fund money growing out of thin air. I sometimes think that the government should step in and fund these things (after all, even Tesla got gov't grants.) Because the private market sure as #@$% isn't. EDIT: This is already at -2 but I am keeping it without altering a word, because the downvoters are wrong and uninformed (or don't understand the analogy), and I am right and well-informed, also it's a good analogy. It's not even close. Here is an example of someone in Europe describing this precisely: https://news.ycombinator.com/item?id=12198883 https://news.ycombinator.com/item?id=12198883 Notice the words "With a product like that, the second thing that we didn't expect was that we tripped the "too good to be true" sensor everywhere, raising doubts." (you might have to click parent from the comment I linked.) It's not as bad in silicon valley as it is in Europe. But it's not that far-off either. There is next to no seed funding in existence. This is a fact. Downvoting me won't change it. Now at -3 after posting this update. Still right. Still not changing a word.
- MichaelBurge 10y agoThe government already does fund small businesses, by guaranteeing SBA loans.
- daphinz 10y agoYou're not entitled to seed funding. However the government does offer SBIR grants of ~225k, from all branches of the government, DOJ, NIH, NSF etc. Odds of getting the grant range from 1/5 to 1/12 depending on the year. With solicitations twice a year.
- contingencies 10y agoI feel like AngelList is a specialized social network with maximum utility ~10 years ago and for people who already know each other or are clearly in the same network, who basically use it as a less-spammy LinkedIn. I've had zero luck communicating with people over it and have frankly given up in favor of raising domestically here in China.
- andrewmb 10y agoI'm currently working on a company that could just as easily start in China as the US: anything you can share regarding where and how to find investors? No "Chinese AngelList"?
- contingencies 10y agoThere are many local networks. We are currently in touch with a few, and may even start one as an adjunct to the current round's raising process. I've sent you an email.
- bgeeek 10y ago"less-spammy" is not how I would describe AngelList. Unfortunately, if you, as a user, allow it to access your email addressbook, it then starts regularly (days apart) spamming each address.
- contingencies 10y agoGood point. It's amazing what companies do under terms of service in the US.
- hamhamed 10y agoI have a startup and want to raise money. It just feels like listing on Angellist won't do anything, and I'm better off doing "offline" (emails) traditional way of raising. It just feels like good deals are done through emails and meetings not through a portal. At least for now