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I appreciate Penchinas thoughts but its getting rampant on AngelList that leads (Penchina included) put in tiny amounts of money in ($1k) and then require their

I appreciate Penchinas thoughts but its getting rampant on AngelList that leads (Penchina included) put in tiny amounts of money in ($1k) and then require their backers to put in 5x more to participate. With the standard carry terms (20%) Even that's okay but then companies are dressed up hard to attract a quick investment draw. When it's largely a cheap lottery ticket for the lead. VC is broken and AngelList allows more exposure to startups but this isn't a good thing.

throwawayFF 9y ago
So true. There is a prominent Seattle based investor who likes to say that he only invests in companies with female founders and that 40% of his portfolio is female founders. But when you look at the amounts invested, it is $25k. For the male founders it is more like $1 million.
nivi 9y ago
Last time we got this comment, we checked the #'s and leads put in 16% of the investment on average. Compare that to 1-5% for a typical VC fund. Partners in a VC fund also take out 10-20% of the fund in management fees. You can learn more here https://angel.co/economics-syndicates https://angel.co/economics-syndicates Some leads have low skin in the game. In that case, you can always opt out of their investments. Or invest in our funds and we'll make the decision for you (for no additional cost) http://angel.co/funds http://angel.co/funds P.S. We don't hate VCs. They are among our users and customers.
- simonebrunozzi 9y ago
  Hi Nivi, I took a look at some data a while ago, and your "16% on average" sounds a bit off. Is it weighted on the amount of investments, or not?
joshu 9y ago
VC funds typically require that the general partners put in 1% of the value of the fund. This isn't too dissimilar.
AndrewKemendo 9y ago
leads (Penchina included) put in tiny amounts of money in ($1k) and then require their backers to put in 5x more to participate. This doesn't make sense, a lead, almost by definition is putting in the largest share. Does that mean that AngelList deals are typically less than 5k?

throwawayFF 9y ago

So true. There is a prominent Seattle based investor who likes to say that he only invests in companies with female founders and that 40% of his portfolio is female founders. But when you look at the amounts invested, it is $25k. For the male founders it is more like $1 million.

nivi 9y ago

Last time we got this comment, we checked the #'s and leads put in 16% of the investment on average. Compare that to 1-5% for a typical VC fund. Partners in a VC fund also take out 10-20% of the fund in management fees. You can learn more here https://angel.co/economics-syndicates https://angel.co/economics-syndicates Some leads have low skin in the game. In that case, you can always opt out of their investments. Or invest in our funds and we'll make the decision for you (for no additional cost) http://angel.co/funds http://angel.co/funds P.S. We don't hate VCs. They are among our users and customers.

simonebrunozzi 9y ago
Hi Nivi, I took a look at some data a while ago, and your "16% on average" sounds a bit off. Is it weighted on the amount of investments, or not?

joshu 9y ago

VC funds typically require that the general partners put in 1% of the value of the fund. This isn't too dissimilar.

AndrewKemendo 9y ago

leads (Penchina included) put in tiny amounts of money in ($1k) and then require their backers to put in 5x more to participate. This doesn't make sense, a lead, almost by definition is putting in the largest share. Does that mean that AngelList deals are typically less than 5k?