AngelList Syndicates launched in late September, according to PandoDaily, allowing “power angel” investors to invite other accredited investors to join venture rounds. The program provides the “power angel” with 15% of any earnings and opens the door to a whole wave of smaller-scale VCs…some more legitimate than others.
Big name venture capitalists have been kicking around the development for the past week via blogs, Twitter and water-cooler chatter, and the verdict? AngelList Syndicate could be a game-changer…but only if the smaller investors have the gumption to step to the plate.
Here are four of our favorite opinions:
“Leading vs. Following,” by Fred Wilson of Union Square Ventures: “Angel List Syndicates are turning angels who have traditionally been followers into leads. That’s a good thing in many ways. The more folks who can lead a round, the better, at least for the entrepreneurs. But, as Hunter [Walk of Homebrew VC] points out, it will mean that less of these angels will get into rounds than before because they will all be showing up with a lot more money than before. It also means that they will have to learn to lead and lead well.”
“Is @AngelList Syndicates Really Such A Big Deal?” by Mark Suster of Upfront Ventures: “Call any CEO that has me as a lead and they’ll tell you that I’ve been on midnight phone calls the night before big meetings acting as a sparring partner. Why? I sit on less than 10 boards precisely so that I can be deeply involved when I’m most needed. And I have witnessed this from nearly all of my peer group … This is what leads do. Less investments, more active. Therefore of course they need to be more selection when writing checks and can’t spread their bets across 75 deals.”
“Launching FG Angels To Make Investments on AngelList,” by Brad Feld of Foundry Group: “This is an experiment. If you know us, we love to experiment with stuff, rather than theorize about things. We are huge believes in seed and early stage investing and through a variety of vehicles, including Techstars and our personal investments in other early stage VC funds, have well over 1,000 seed investments that are active. This has created an incredible network that adds to our Foundry Group portfolio. With FG Angel, we are taking this to another level as we begin a set of activities to amplify this network dramatically.”
“The Great Venture Capital Rotation,” by Jason Calacanis of LAUNCH: “The bottom half of VCs – the ones who don’t really provide a lot of extra value – have already been at risk due to their anemic returns, so I predict this is the nail in the coffin. They’re fracked … But the bottom half of VCs will now be wholesale replaced by folks like Kevin Rose, Dave Morin and myself. The three of us have $1M in backers in the first week. That means if we collaborated on a project we can do an A-Round after a brief conference call. That means the three of us could have funded YouTube, Uber, Pinterest or Twitter’s angel round … You can only succeed as an angel investor, I believe, if you are a massive gambler. You have to bet, bet, bet with ice in your veins: knowing that after dozens of failures, you’ll hit a winning bet of epic proportions.”
“Some Thoughts On Startup Crowdfunding,” by Chris Dixon of Andreessen Horowitz: “When you look at the biggest crowdfunding markets – publicly traded stocks on NYSE, NASDAQ, etc – you find that a) In general, non-professional investors lose money when they try to pick individual stocks. This suggests that something similar to mutual funds would be the best mechanism for amateur participation. b) There is a constant cat-and-mouse game between regulators and sketchy market participants. If this happens with private financings, and more and more rules and regulations get added, many of the advantages of being a private company could go away.”