Analyzing the AngelList Ecosystem
A high-level overview of how AngelList seeks to democratize investing & increase the number of successful startups in the world
AngelList is a private company that aims to democratize the investment process and ultimately increase the overall number of successful startups in the world. This is a mission that I personally resonate with and wanted to go into deeper detail as to how this ecosystem of companies work towards this mission of democratizing investing.
AngelList is a major connector in the international startup ecosystem, connecting startups to capital, investors to startups, startups to talent, and talent to high growth opportunities. The company is truly pioneering innovation in the early-stage investing infrastructure so it's important to have a general understanding of what they do, and why they do it if you're interested in angel investing as an asset class.
AngelList boils down to two main pillars — AngelList Talent and AngelList Venture. The company spun out Republic in July, 2016 in order to help democratize access to early-stage investing, after lobbying the SEC for the prior few years to enact the JOBS Act. They proceeded to acquire Product Hunt in November, 2016 in order to help startups launch their products and discover potential customers. As crypto & digital assets started to become more prevalent, AngelList spun out CoinList in 2017 to assist new crypto companies with initial coin offering services.
The AngelList user flow:
Launch on Product Hunt → Hire on AngelList Talent → Raise from & grow your community on Republic → Raise from accredited investors on AngelList Venture
Some quick facts & information on each part of the AngelList ecosystem:
AngelList Talent:
Free platform that matches entrepreneurial minded candidates with startups looking to grow their teams
Allows startups to source candidates on the platform with filters such as location, skills, experience, and more
Over 100,000 startups of all sizes use AngelList Talent to discover job seekers - including a number of highly successful companies
More that 3.5 million candidates actively job hunting on the platform in 2019 — making AngelList the worlds largest network of startup talent
Premium service called A-List: the Top 1% of candidates on the platform, identified by algorithms, curated by humans, and ready to interview
Over 185,000 new jobs listed in 2019 — the platform continues to grow
Over 5,000,000 connections created between startups and candidates on the platform — as of the end of 2019
135,000 new members joining the talent platform per month
Bringing early-stage investing online and reducing overall fricition in the process of raising money
AngelList Venture exists to "Innovate on the infrastructure of innovation itself" - Naval Ravikant
The high-level goal of AngelList Venture is to serve founders by eliminating the hassels associated with venture investing — reducing friction in the fundraising process
The benefits to investing on AngelList Venture Platform:
Focus on investing and leave all the back office services to AngelList
Invest alongside top VCs and funds
Get access to investment and venture capital insights
Start or invest in your own fund or Syndicate with just a few clicks
Raise capital from a platform of experienced LPs
New methods of transforming venture through technology, introduced by AngelList:
Syndicates — single-deal VC funds led by top angel investors. Read more here → A Beginners Guide to Syndicates
Rolling Funds — an always open venture fund → a subscription model to early stage investing. Read more here → A Beginners Guide to Rolling Funds
AngelList Access Fund — invest a single check into all of the high-quality rolling funds and deals, picked by AngelList Access Fund Invesment Committee. The AngelList Access Fund provides investors access to high-quality rolling funds, top-tier dealflow, and expert sector analysis.
Fund Performance Calculator — a calculator that produces percentile scores across vintage years by combining performance data from hundreds of recent venture capital funds
Transfers — recurring transfers enable companies to offer recurring liquidity as a differentiated compensation benefit for employees
AngelList Venture spun out as its own independent company from AngelList Holdings at the beginning of 2020
Key AngelList Venture Stats for 2020:
$2.5B in AUM (assets under management)
77 unicorns (valuation > $1B) backed by AngelList Funds & Syndicates
51% of all top-tier U.S. VC deals in our portfolio
The Early-Stage Investing Ecosystem in 2020 - Abe Othman, Head of Data Science at AngelList [video]
This article perfectly catagorized AngelList Venture as "a zero capital, infinite carry fund" comparing AL Venutre to the likes of AirBnB and Uber, leveraging technology to enable economic value without owning any of the underlying assets/risk
Product Hunt:
A website started by Ryan Hoover in 2013 to share and discover new products
The site includes a comment & upvoting system similar to Reddit or Hacker News
Enables startups to launch products to a group of early adopters
Over 150,000 products have been launched on Product Hunt since its founding
In 2019 alone over 25,000 products launched on Product Hunt, with the community logging over 2 million upvotes on projects they love
The acquisition of Product Hunt contributes to the AngelList goal of democratizing launching a startup and increasing the number of successful startups by helping them find early adopters for their product
Launch on Product Hunt → Hire on AngelList Talent → Raise $ through AngelList Venture — Leveraging technology throughout this process in order to decrease fricition and make it easier for anybody to start a startup
Republic:
In 2016, Republic spun out of AngelList when Title III equity crowdfunding regulations of the Jumpstart Our Business Startups Act (JOBS Act) of 2012 were enacted — Republic adopted a similar mission to make fundraising more accessible, particularly for unaccredited investors
Ken Nguyen (former GC at AngelList) & Paul Menchov (former technology officer at AngelList) co-founded the company
Startup investing had typically been reserved to only accredited investors, thus limiting the every day person from investing in this high-growth asset class
Republic is an equity crowdfunding site that enables non-accredited investors to invest in vetted startups, video games, real estate, and crypto
Equity Crowdfunding can be a great starting place for startups that may not be ready for traditional venture funding & want to build a community around their product/service — investment aligns the incentives of a company and its community
Republic and the rest of the AngelList ecosystem continue to lobby for new regulation in Regulation Crowdfunding (known as "Reg CF") with the SEC — with new changes expected to go into effect in March including raising the fundrasing cap from $1.07m → $5m. See more here:
Just recently Arlan Hamilton and her team at Backstage Capital was (to my knowledge) the first investment adviser to raise a funding round leveraging equity crowdfunding — they managed to reach the $1.07m cap in the matter of hours. See the campaign here
CoinList:
CoinList emerged from a collaboration between AngelList and Protocol Labs in 2017
CoinList helps new crypto companies launch digital assets — from protocol tokens to securities
These companies are burdened with managing both techonological innovation & the stress that comes with compliance and regulatory issues in creating a financial instrument
CoinList provides financial services so that token creators can focus on building product — it aims to be the one place where the world's best digital assets run their token sales
Ultimately, CoinList decreases the friction of owning digital assets for investors, and makes it much more simple for creators to launch digital assets in a compliant manner
Thank you for reading! If you enjoyed this please feel free to follow me on Twitter @N0ahMadden