AngelList And Beyond: What VCs Really Think Of Crowdfunding

By Lora Kolodny WSJ Blogs New financial regulations that let startups or funds raise capital online, and broadly advertise that fact, are shaking up the early-stage investment scene. Now venture capitalists are taking a closer look at equity crowdfunding. In what appears to be a first for venture capital in the U.S., early-stage fund Foundry Group said last week it would commit $2.5 million to equity crowdfunding deals via the AngelList investment platform. The effort, called FG Angels, makes use of a new AngelList service called Syndicates, which enables an individual accredited investor or a fund to create, in effect, a mini-VC fund online. With AngelList Syndicates, a firm like Foundry Group or a prominent individual investor like Jason Calacanis can invest their own money in a startup and raise additional money on the company’s behalf. People who join their syndicate invest automatically in their deals, and agree to pay them “carry,” or a percentage of future returns from those deals. For investors with a good reputation and a following, the appeal is that it’s easier and faster to form an AngelList Syndicate online than to form a venture capital or seed fund, which entails the writing of a private placement memo, locking in limited partners and more. Aside from Foundry Group, no traditional firms have publicly aligned with and […]

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