Angellist is a pioneer in the field of online startup investing. And it is a great choice for low priced access to startups in their early stages. Specially, those who want to follow the “syndicate” way of following lead investors. 

Angellist is one of the first websites of its kind. They have had several one-billion dollars plus outcomes on its investments. Some of which include Dollar Shave Club (that was sold to Unilever) as well as Twilio. 

The Basics

You need a minimum of $1000 to invest with Angellist. They have a really long track record, as they were one of the first online startup investment platforms. 

They utilize the syndicate model to follow specific lead investors. 

Those investors who have plenty of experience can apply to become syndicate leads. And this will help increase potential returns. 

History

This platform was founded in 2010. And it was among the first of the online platforms that started as a means of raising venture funding. The platform is rather secretive in some ways. Perhaps this is due to Regulation D changes. D The syndicate leads share in the carried interest, or “carry”. And this offers the potential for significant upsides on the exits that are successful.

These deals are available through syndicates led by investors. And they should follow syndicate leads as much or more than reviewing individuals’ investments. The syndicate leads share in the carried interest, or “carry” and this offers the potential for significant upsides on the exits that are successful. 

They’ve even expanded beyond simply syndicating the investments to provide a job market that caters specifically to start ups. 

Investment Types

You can get investments in individual early stage startups. And you can also get funds that provide you a healthy amount of diversification-many however have minimums of $25,000 or more. 

What Do You Get? 

Like many other Regulation D investment crowdfunding sites, the investors are actually investing in a special purpose vehicle which usually takes the form of an LLC. This holds the actual underlying securities and simplifies the raising company’s cap table. 

Fees

Each of the syndicate investments have a one-time fee of about $8000 and it is pro-rated across all investors in the syndicate. And it will be calculated by their investment amount. Third parties like state regulatory agencies, accountants, and payment processors will take all of these.

The syndicates also charge interest rates. This usually is about 20%. The syndicate lead and Angellist share this in between them. 

Your Potential Returns

Investments are high risk and high reward. They are all done in startups. Many of these investments have no specific expectations regarding dividends, cash flow, or payments. Many of these startup investments lose all or some of their value.

Some investors get excellent return from taking the risk. However, this outcome is rare and would require a very substantial amount of diversification over time coupled with a very careful selection of investments. 

Due Diligence and Regulatory Framework

Angellist itself is known as an “Exempt Reporting Advisor.” This is a variant of “Registered Investment Advisor.” The investments are offered by way of SEC Reg D. They are only available if you are an accredited and approved investor. 

Investors rely heavily on syndicate leads for curation purposes. 

The Facts of Angellist

The platform did exceptionally well in 2018. According to the company, “assets under management” now top a billion dollars. 

They became relevant in the shift to using the internet as a means to raise money online. This was really triggered in the spring of 2013 when the SEC (Securities and Exchange Commission) issued a No Action Letter. And that pertained to their pursuance of an online marketplace that prompted one user to proclaim AngelList the patron saint of online equity crowdfunding. It is now one of the largest platforms you will encounter and is very popular in the world of crowdfunding. 

Services continue to be tweaked and improved. It mostly focuses on its job’s marketplace, and this active platform matches employees to early-stage firms. You can get a job in a startup if you so wish thanks to Angellist. 

Other Great Things

  • Angellist Venture features over a billion in assets under management and 23 heavy hitters in the portfolio such as Robinhood and Lime. 
  • The investments are worldwide. They are done in companies in 38 different countries with the USA leading the line, and Europe coming in a close second. 
  • There are 250 angels and VCs relying on the platform. 
  • Half of the investments came from the VC funds. And Angellist manages them all. 

Indeed, this is more of a jobs list nowadays instead of a crowdfunding site. You will not find anything like Kickstarter or Indiegogo here. As you may have already guessed from the terminology used in this particular article, this is for investors, VCs and angels who know what they’re working with. However, if this is the platform for you, it is definitely a strong choice. 

They even say they have something new in the works, but thanks to the secretive nature of the platform we must wait and see.

Cons

Indeed, Angellist is great. But there are some drawbacks. 

For starters, you have to be an accredited investor. This is a stringent requirement; not for the faint of heart. 

The startup investments are VERY risky and illiquid in nature. 

You have to be approved by a syndicate lead to gain access certain investments, even AFTER you complete the stringent approval process for investing. 

It’s a great platform, but they do make sure only the best gets in. 

CrowdfundingBum To the Rescue

At CrowdfundingBum, we don’t ask for a lot! We don’t need you to be a rich investor or make you do any approval processes whatsoever. We want to see the world succeed. So, we welcome everybody to come and check it out, regardless of how much or how little money you may have. We have a great support system too. So you can ask any questions you need and start right away. 

Final thoughts.

We hope you stick around a while to find out more about all that Crowdfunding Bum has to offer. You will find ample reasons to choose us as your funding source.

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