7 ms·

FundersClub: An online platform for making angel investments

60 points by sthatipamala 14y ago

mcarvin 14y ago
game changer. will you let vc's work for you after you crowd out their market?
stanfordkid 14y ago
Insider access?? lol
kdsudac 14y ago
I checked out the video. Was disinterested until 0:50 mark. Once I saw minimum investment as low as $1,000 my interest went up. Kinda lending club meets kickstarter. Probably a fair amount of people (myself included) would like to be an angel investor. For people who are rich but not one-percenters cutting a check for $100,000 for a risky investment is a high barrier to entry. I'd be more inclined to make 10 x $1,000-$2,000 investments (bets?). Could be interesting for niche markets if it bring in people with expertise, high income and are also decision makers in their day jobs: doctors, lawyers, small business owners, senior managers, corporate officers, etc.
- ocelotpotpie 14y ago
  Perhaps eventually. At the moment you need to be an "Accredited investor" in order to actually join and invest. They define an "Accredited investor" as meeting at least one of the following criteria: - Someone who has made $200k+ for the past two years and will continue to do so. - Someone with joint income with a spouse exceeding $300k for the past two years. - Net worth or joint net worth exceeding $1 million. While this does make sense, it basically means the type of folks who are already quite rich and would be making these sorts of investments just have the tools and ability to make investments at a lower scale, and through a website. It's definitely an interesting idea, but I'll be more excited about it when the investors they allow get closed to the "average people" in the industry who aren't sitting on a million dollars.
  - apaprocki 14y ago
    They don't define an accredited investor, the SEC does: http://www.sec.gov/answers/accred.htm http://www.sec.gov/answers/accred.htm
  - kdsudac 14y ago
    My point is those thresholds aren't that high for people like "doctors, lawyers, small business owners, senior managers, corporate officers, etc." Senior level engineers, accountant, etc could have net worth exceeding $1 million once you factor in home ownership, 401k, stock portfolio, 401k, IRA, etc. Potentially you'd open up angel investment from the 1-2% to the 5-10%.
    - ontoillogical 14y ago
      I think the 1 million minimum doesn't include the value of your primary residence.
asanwal 14y ago
So besides the YC connection, I am genuinely curious what is different / better about FundersClub than any of the other 100 crowd funding "platforms" that have emerged? These types of exchanges connecting companies with investors have been tried tens of times before, and they always fail because building a two-sided network is hard. People will only invest if good companies are there and good companies only show up if real money is there. Nothing I saw on the site suggested theyve solved this issue. I'm cautiously optimistic about the Jobs Act but see so many of these platforms cropping up that seemingly don't have a solution to get quality dealflow and quality funders. The key to that IMO is not the fee structure which FundersClub spent a lot of time detailing or ease of the legal process. These are details but the key driver is getting quality startups and check writers on the platform who want to get "hitched". The legal and pricing details are next. Lastly, the only folks really uniquely positioned to build the required two-sided network are the team at AngelList. I've not heard they're doing this but of anyone, they have the assets it seems to pull it off.
- talsraviv 14y ago
  The team behind it - these guys have each built multiple successful companies with exits or massive profits - together with the YC spotlight. You're right that being in YC alone won't cut it but as we've seen it definitely amplifies the power of a great team. The YC spotlight is particularly perfect for this concept because of demo day. They might be the only startup that can get all their most important and prominent target customers (and thought leaders) in one room, very shortly after launching.
  - asanwal 14y ago
    But demo day really isn't their market is it? Demo day is YC companies with tons of amazing access to capital with pretty great terms (Milner, A16Z and Ron Conway cash) and a group of other attending investors who aren't interested in writing $1000 checks. If they could convince YC companies to forego the available money and use their platform instead, that would be a coup for sure. But that seems unlikely.
    - 14y ago
dmarble 14y ago
Discussion from a few days ago about FundersClub: http://news.ycombinator.com/item?id=4294411 http://news.ycombinator.com/item?id=4294411
skue 14y ago
I don't understand why startups would come here versus AngelList or other platforms. The $1K minimum practically guarantees a poor quality investor pool. Just think for a moment about how conservative an investor has to be in order to (1) qualify as accredited (millionaire or very well paid) while (2) still being unwilling to part with more than $1K. One of the problems that entrepreneurs have with sites like these is the noise - the folks who like to call themselves "angels" but only invest a random $5K once every year or two. They are more likely to waste your time with numerous questions and less likely to ultimately invest.

60 points by sthatipamala 14y ago

mcarvin 14y ago

game changer. will you let vc's work for you after you crowd out their market?

stanfordkid 14y ago

Insider access?? lol

kdsudac 14y ago

I checked out the video. Was disinterested until 0:50 mark. Once I saw minimum investment as low as $1,000 my interest went up. Kinda lending club meets kickstarter. Probably a fair amount of people (myself included) would like to be an angel investor. For people who are rich but not one-percenters cutting a check for $100,000 for a risky investment is a high barrier to entry. I'd be more inclined to make 10 x $1,000-$2,000 investments (bets?). Could be interesting for niche markets if it bring in people with expertise, high income and are also decision makers in their day jobs: doctors, lawyers, small business owners, senior managers, corporate officers, etc.

ocelotpotpie 14y ago
Perhaps eventually. At the moment you need to be an "Accredited investor" in order to actually join and invest. They define an "Accredited investor" as meeting at least one of the following criteria: - Someone who has made $200k+ for the past two years and will continue to do so. - Someone with joint income with a spouse exceeding $300k for the past two years. - Net worth or joint net worth exceeding $1 million. While this does make sense, it basically means the type of folks who are already quite rich and would be making these sorts of investments just have the tools and ability to make investments at a lower scale, and through a website. It's definitely an interesting idea, but I'll be more excited about it when the investors they allow get closed to the "average people" in the industry who aren't sitting on a million dollars.
- apaprocki 14y ago
  They don't define an accredited investor, the SEC does: http://www.sec.gov/answers/accred.htm http://www.sec.gov/answers/accred.htm
- kdsudac 14y ago
  My point is those thresholds aren't that high for people like "doctors, lawyers, small business owners, senior managers, corporate officers, etc." Senior level engineers, accountant, etc could have net worth exceeding $1 million once you factor in home ownership, 401k, stock portfolio, 401k, IRA, etc. Potentially you'd open up angel investment from the 1-2% to the 5-10%.
  - ontoillogical 14y ago
    I think the 1 million minimum doesn't include the value of your primary residence.

asanwal 14y ago

So besides the YC connection, I am genuinely curious what is different / better about FundersClub than any of the other 100 crowd funding "platforms" that have emerged? These types of exchanges connecting companies with investors have been tried tens of times before, and they always fail because building a two-sided network is hard. People will only invest if good companies are there and good companies only show up if real money is there. Nothing I saw on the site suggested theyve solved this issue. I'm cautiously optimistic about the Jobs Act but see so many of these platforms cropping up that seemingly don't have a solution to get quality dealflow and quality funders. The key to that IMO is not the fee structure which FundersClub spent a lot of time detailing or ease of the legal process. These are details but the key driver is getting quality startups and check writers on the platform who want to get "hitched". The legal and pricing details are next. Lastly, the only folks really uniquely positioned to build the required two-sided network are the team at AngelList. I've not heard they're doing this but of anyone, they have the assets it seems to pull it off.

talsraviv 14y ago
The team behind it - these guys have each built multiple successful companies with exits or massive profits - together with the YC spotlight. You're right that being in YC alone won't cut it but as we've seen it definitely amplifies the power of a great team. The YC spotlight is particularly perfect for this concept because of demo day. They might be the only startup that can get all their most important and prominent target customers (and thought leaders) in one room, very shortly after launching.
- asanwal 14y ago
  But demo day really isn't their market is it? Demo day is YC companies with tons of amazing access to capital with pretty great terms (Milner, A16Z and Ron Conway cash) and a group of other attending investors who aren't interested in writing $1000 checks. If they could convince YC companies to forego the available money and use their platform instead, that would be a coup for sure. But that seems unlikely.
  - 14y ago

dmarble 14y ago

Discussion from a few days ago about FundersClub: http://news.ycombinator.com/item?id=4294411 http://news.ycombinator.com/item?id=4294411

skue 14y ago

I don't understand why startups would come here versus AngelList or other platforms. The $1K minimum practically guarantees a poor quality investor pool. Just think for a moment about how conservative an investor has to be in order to (1) qualify as accredited (millionaire or very well paid) while (2) still being unwilling to part with more than $1K. One of the problems that entrepreneurs have with sites like these is the noise - the folks who like to call themselves "angels" but only invest a random $5K once every year or two. They are more likely to waste your time with numerous questions and less likely to ultimately invest.