4 ms·

AngelList raises $24 million at a heavenly valuation

86 points by quant 13y ago

nugget 13y ago
What's to prevent one of the incorporation mills from creating a flat fee syndication platform to manage the LLC and provide template documents? Asking for % carry as a platform that streamlines the legal filing and record keeping seems aggressive.
- prostoalex 13y ago
  Comes down to dealflow. Quality angels are sought after, and if they're capable of syndicating a larger round, so much the better. To quote PG from http://paulgraham.com/fr.html http://paulgraham.com/fr.html: "The best type of intro is from a well-known investor who has just invested in you. So when you get an investor to commit, ask them to introduce you to other investors they respect." AL just automates the above behavior.
asanwal 13y ago
This has been tried multiple times before (a startup funding marketplace) but all have failed because they couldn't build out the two-sided network. AL is the first to solve this. They have quality investors and startups (the 2 critical sides of this network) which is what gets the flywheel turning on these marketplaces. We see lots of Crowdfunding platforms getting funded and all focus on competing on features and fees but fail to build out credible network participants on both sides and getting liquidity on the platform. AL is doing this well. Given that Naval also seems smart as heck, this is going to be big and I suspect quite disruptive to the broken VC model.
- 7Figures2Commas 13y ago
  > ...to the broken VC model. I'm always curious when I see comments like this. What is broken about the VC model?
  - asanwal 13y ago
    The returns are abysmal primarily. They lag Wall Street (while taking much more risk) http://www.geekwire.com/2013/vc-returns-improve-10year-horizon-investing-wall-street/ http://www.geekwire.com/2013/vc-returns-improve-10year-horiz... This may sort itself out on its own, however, as LPs are investing less and less in the VC asset class.
    - diziet 13y ago
      How does early stage jump from 5.8 to 68.8% when going from 10 to 15 years? It seems there is some small sampling issues going on there. Anyway, you can take a certain time frame, slice the start/end dates to match when certain companies sell or are the market is doing well and make your point look in either side's favor, especially for short time intervals like 1-3 years. Also curious as to how NVCA collects this data.
      - asanwal 13y ago
        Absolutely fair critique. Cambridge Associates and Preqin are primary data providers in this world, but in talking to our VC customers, we've heard that sample size, reporting bias (funds doing well may be more inclined to participate) and large time lags are a problem with judging VC performance based on their data. Some studies have also found that the same fund can have different returns in each system. That said, it's the best of what's available today. The best indicator or proxy that returns suck is that LPs are voting with their wallets and leaving the asset class and investing in it less.
      - robk 13y ago
        10 year doesn't include the 1999-2000 bubble era, 15 year does. Those couple of years were among the best periods for VC returns ever, hence any period including them will have disproportionately high #s relative to other periods.
    - 7Figures2Commas 13y ago
      If that is why VC is broken, how will a service like AngelList help? I fail to see how connecting investors and startups in new ways addresses the issue of poor returns. For what it's worth, my impression has been that there is too much capital chasing too few funding-worthy startups and in recent years this has been driven in large part by monetary policy, which is producing capital misallocation and malinvestment across many asset classes. I'd guess that when the game is over, angels and super angels will be especially affected and many will drop out of the market altogether. That, of course, would negatively impact AngelList.
ddon 13y ago
Hopefully we will see AngelList app on Android and iOS now :)
- yesplorer 13y ago
  because using your favorite mobile browser to view webpages is too mainstream I guess.
joshfraser 13y ago
I'm a huge fan of both Naval and AngelList. I'm excited to see what they do with this new war chest. AngelList played a big role in getting my company funded & I was lucky to have Naval as an investor as well. To me, the most impressive thing is they run AngelList like any other startup. I remember emailing Naval about a bug and 10 mins later he responded with news that it was fixed. The implicit data they are collecting is incredibly valuable and there's no one better positioned to capitalize on it than the team they have put together.
brianchu 13y ago
The interesting thing is that, from when I talked to the guys at AngelList, the bigger market (with larger monetization potential) is not its funding platform. It's the hiring platform.

86 points by quant 13y ago

What's to prevent one of the incorporation mills from creating a flat fee syndication platform to manage the LLC and provide template documents? Asking for % carry as a platform that streamlines the legal filing and record keeping seems aggressive.

prostoalex 13y ago
Comes down to dealflow. Quality angels are sought after, and if they're capable of syndicating a larger round, so much the better. To quote PG from http://paulgraham.com/fr.html http://paulgraham.com/fr.html: "The best type of intro is from a well-known investor who has just invested in you. So when you get an investor to commit, ask them to introduce you to other investors they respect." AL just automates the above behavior.

asanwal 13y ago

This has been tried multiple times before (a startup funding marketplace) but all have failed because they couldn't build out the two-sided network. AL is the first to solve this. They have quality investors and startups (the 2 critical sides of this network) which is what gets the flywheel turning on these marketplaces. We see lots of Crowdfunding platforms getting funded and all focus on competing on features and fees but fail to build out credible network participants on both sides and getting liquidity on the platform. AL is doing this well. Given that Naval also seems smart as heck, this is going to be big and I suspect quite disruptive to the broken VC model.

7Figures2Commas 13y ago
> ...to the broken VC model. I'm always curious when I see comments like this. What is broken about the VC model?
- asanwal 13y ago
  The returns are abysmal primarily. They lag Wall Street (while taking much more risk) http://www.geekwire.com/2013/vc-returns-improve-10year-horizon-investing-wall-street/ http://www.geekwire.com/2013/vc-returns-improve-10year-horiz... This may sort itself out on its own, however, as LPs are investing less and less in the VC asset class.
  - diziet 13y ago
    How does early stage jump from 5.8 to 68.8% when going from 10 to 15 years? It seems there is some small sampling issues going on there. Anyway, you can take a certain time frame, slice the start/end dates to match when certain companies sell or are the market is doing well and make your point look in either side's favor, especially for short time intervals like 1-3 years. Also curious as to how NVCA collects this data.
    - asanwal 13y ago
      Absolutely fair critique. Cambridge Associates and Preqin are primary data providers in this world, but in talking to our VC customers, we've heard that sample size, reporting bias (funds doing well may be more inclined to participate) and large time lags are a problem with judging VC performance based on their data. Some studies have also found that the same fund can have different returns in each system. That said, it's the best of what's available today. The best indicator or proxy that returns suck is that LPs are voting with their wallets and leaving the asset class and investing in it less.
    - robk 13y ago
      10 year doesn't include the 1999-2000 bubble era, 15 year does. Those couple of years were among the best periods for VC returns ever, hence any period including them will have disproportionately high #s relative to other periods.
  - 7Figures2Commas 13y ago
    If that is why VC is broken, how will a service like AngelList help? I fail to see how connecting investors and startups in new ways addresses the issue of poor returns. For what it's worth, my impression has been that there is too much capital chasing too few funding-worthy startups and in recent years this has been driven in large part by monetary policy, which is producing capital misallocation and malinvestment across many asset classes. I'd guess that when the game is over, angels and super angels will be especially affected and many will drop out of the market altogether. That, of course, would negatively impact AngelList.

ddon 13y ago

Hopefully we will see AngelList app on Android and iOS now :)

yesplorer 13y ago
because using your favorite mobile browser to view webpages is too mainstream I guess.

joshfraser 13y ago

I'm a huge fan of both Naval and AngelList. I'm excited to see what they do with this new war chest. AngelList played a big role in getting my company funded & I was lucky to have Naval as an investor as well. To me, the most impressive thing is they run AngelList like any other startup. I remember emailing Naval about a bug and 10 mins later he responded with news that it was fixed. The implicit data they are collecting is incredibly valuable and there's no one better positioned to capitalize on it than the team they have put together.

brianchu 13y ago

The interesting thing is that, from when I talked to the guys at AngelList, the bigger market (with larger monetization potential) is not its funding platform. It's the hiring platform.