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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