Is @AngelList Syndicates Really Such a Big Deal?

Both Sides of the Table

If you track the venture capital industry it would be hard to miss the conversation going on this week over AngelList “Syndicates.” My favorite new VC blogger, Hunter Walk, weighed in with some thoughtful comments about how Syndicates might actually pit, “ angel vs. angel.”

Glowforge’s $22 Million Financing

Feld Thoughts

We just led a $22 million financing in Glowforge. When we led a $9 million financing in Glowforge a little over a year ago, we were excited about the potential to do to the subtractive 3D printing world what we did with MakerBot in the additive / FDM 3D printing world.

Syndicate Funding on AngelList – A Company’s Perspective

VC Adventure

A few months ago AngelList announced Syndicates - enabling investors on AngelList to create fund-like groups of investors to invest together in AngelList companies (following a single lead investor). How AngelList Syndicates (and FG Angels) Works.

7 Seed-Stage Funding Sources To Finance Your Startup

Startup Professionals Musings

I challenge any entrepreneur, for example, to define the difference between "seed-stage" and "early-stage" financing. million and is normally syndicated from one to three institutional seed investors or larger VC funds.

Three New Types of AngelList Syndicates I Hope to See

Hunter Walker

So far most of the top funded AngelList Syndicates look, well, not surprising. Additionally, funds such as Foundry Group and Google Ventures have taken their own approaches – the former creating a separate early stage entity , the latter encouraging their seed stage partners to create standalone personal syndicates. As part of my seed fund Homebrew , we were also one of the first VCs to co-lead an investment alongside an AngelList syndicate (see Shyp ).

Syndicate Funding on AngelList – A Company’s Perspective

VC Adventure

A few months ago AngelList announced Syndicates – enabling investors on AngelList to create fund-like groups of investors to invest together in AngelList companies (following a single lead investor). How AngelList Syndicates (and FG Angels) Works.

How to Evaluate Firms for a Seed VC Syndicate

Genuine VC

Term-driving investor approach – An entrepreneur finds a lead (quasi-)institutional venture investor to price and set the structure/dynamics of the round, working together to bring in additional syndicate partners (either/both other funds and individual angels). Active partner involvement level of lead partner post-financing – Venture firms approach involvement after a seed round wildly differently.

Equity financing: great for rapid growth startups

Berkonomics

We’ve spoken of financing a young company through friends and family, known as “inside angels.” And even though angel groups syndicate their best deals within their respective associated networks, it is always best to apply to the angel groups nearest your physical location.

Equity 101

Fifteen Personal Finance Tips For Making Sure You Are Better Off Four Years From Now

YoungUpstarts

by Eric Tyson, author of “ Personal Finance For Dummies “ Unless you’ve been living under a rock for the past few months, you know that the presidential election is just around the corner. When it comes to your finances, steady wins the race, no matter who is president.

Why Angelist Syndicates is Great For the Boston Startup Community

Rob Go

I continue to think that seed/angel investing is a pretty local endeavor, and even more so when one is hoping to lead rounds or be instrumental to catalyzing a financing or boosting the long-term prospects of a company. Which is why I’m pretty psyched about Angelist syndicates, especially in relation to the Boston startup community. Enter Angelist Syndicates.

UK VC trend points to smaller, less syndicated deals

Fred Destin

which is the lowest in 9 years Striking trend 2: syndication dropped below 60% to 54% for the first time in 10 years So many smaller deals done by single investors. The busiest investors were YFM (as a Group), Octopus Ventures, Amadeus and Finance Wales.See the impact of VCT and Regionals Levels of syndication dropped significantly to 54% (66%) of deals.

Early Seed Financing Terms Endure… Whether We Like It or Not

Genuine VC

Dharmesh Shah had a great post up last week about the lessons learned from raising a mezzanine round of financing. But the more meaningful reason that early financing terms endure into future rounds is that negotiation away from terms already in place are just that – negotiation. Earliest terms matter most, even and especially in the seed round, because they set not only the base literal structure, but also the “tone” for future financings.

The Importance of Robust Angel Ecosystems

VC Adventure

I’ve always felt that a robust angel financing market was important to startup ecosystems and the data on the next two charts really brings that home. AngelList Entrepreneurial Ecosystems angel capita angel investing angellist angellist syndicates FG Angels

Chronic Under-financing of EU Start-ups Driven by Mindset

Babbling VC

I personally believe that one of the major drawbacks to venture capital in Europe is chronic under-financing and people skirt around this issue. Hence, financing rounds have been smaller (roughly a ratio of 5 to 1 when comparing US to EU). You could say the entrepreneurs aren't thinking big enough and hence aren't selling a vision worth financing with larger rounds. Even Dropbox and Etsy have done far larger rounds to finance their growth.

5 Financial Professionals Every Entrepreneur Needs On Their Team

YoungUpstarts

Having the right team in place can make all the difference in how you manage your finances and allow your money to work for you instead of against you. Personal Finance Coach. Some will help analyze your big picture and help you set up a system for managing and reviewing your finances.

VC Seed Funding Example: Trada

Feld Thoughts

My partner Seth Levine has a detailed post up today titled Trada – from the beginning that describes the creation and financing of Trada. In this case neither Niel (nor I) had any interest in creating a traditional syndicate to fund the company. Instead we quickly put our heads together about a financing (we like to say it was over beers, but the truth is more mundane – we hammered out the details in a 10 minute conversation in the conference room of the Foundry office).

Understanding Different Types of Angel Investors

View from Seed

Pros of taking their angel money include the feeder system to venture financing of the next round and the vast network of portfolio CEOs which can be tapped into for connections and help. Cons: Potentially not much value-add beyond initial financing round.

Our First FG Angels Investment in OnTheGo Platforms Has Closed

Feld Thoughts

This morning we announced that we have closed a financing in OnTheGo Platforms via our FG Angels syndicate. On October 1st, 2013 we announced that we’d be forming an AngelList syndicate called FG Angels and making 50 seed investments through AngelList by the end of 2014. from our Foundry Group funds for this effort and decided to max out the syndicate at $500k / investment, or $25m total. would come from syndicate participants.

Where Do I Find Capital For My Startup?

YoungUpstarts

Once you learn about all of your financing options, you could choose the one best suited to help your business grow. SYNDICATES : Syndicates are single-purpose investment funds. Some business owners decide to self-finance their startup rather than seek out investors.

How I Think About Seed Investing As A VC

Feld Thoughts

At Foundry Group, we describe ourselves as being “syndication agnostic&#. Tags: Seed Financing seed VC Last week saw an explosion of discussion around seed investing, including plenty of negative comments around VCs as seed investors. While I agree that many VCs are crummy seed investors, I think there are some that are excellent seed investors.

Startup Data: 4 Strategies Changing the Speed & Size of Your Series A

View from Seed

Recently, we looked at our own portfolio at NextView Ventures to dig a little deeper on how startups actually raise that next round of financing. Startups with large, lifecycle VCs included in the seed round syndicate did not reach Series A faster than those who did not.

Pristine.io Raises $5.4M From S3 and Capital Factory

Austin Startup

million in Series A financing. Austin-based S3 Ventures led the oversubscribed round, which also included Capital Factory, HealthFundr, and a syndicate of strategic clients. This new financing enables the company to expand its R&D, sales, marketing, and operations teams, supporting the company’s rapid growth. Pristine, developers of the only HIPAA-compliant video streaming and checklist solutions for Google Glass, announced today that it has raised $5.4

It might not be a bubble but sure as hell the rent is too damn high!

Professor VC

It was a great product addressing a large market opportunity and was interested in seeing how the AngelList syndicate process worked. Due to confidentiality provisions, I can''t disclose details, but there are many very unhappy participants who invested through the syndicate.

Transparent Funding Announcements

Feld Thoughts

No understanding of the human dynamics behind the financing. No underlying metrics that drive the financing. Recently, the gang at SalesLoft told the detailed story of their $10m financing. Kyle followed the tradition of extreme openness about the financing process that I think Rand Fishkin started with his post three years ago titled Moz’s $18 Million Venture Financing: Our Story, Metrics and Future. None of them covered the financing in any way.

Seed Round Signaling Revisited: Myths, Truths, & Half-Lies

Genuine VC

Yet even today, whether or not to take a (relatively) small check in a seed round syndicate from a multi-hundred million or even billion dollar fund is still a decision which takes quite a bit of consideration and sometimes consternation. It seems as though it’s been talked about ad nauseum in the blogosphere, but we see first-hand as entrepreneurs we’re investing in at NextView Ventures work through building their seed round syndicates, it really is a tough issue.

Get Ready For Q115 Fundraising Insanity

Feld Thoughts

So – I’ll start with that – this is not a prediction, rather it’s a hypothesis, which is as long as there isn’t a cataclysmic macro event, Q115 financing activity is going to be insane. The number of large, “later stage” financings are remarkable – both in size and velocity. We are syndication agnostic and are happy to continue to finance strong, later stage companies in our portfolio with or without new co-investors.

5 Questions VCs Never Answer, Answered by a VC | #BOSSOI

View from Seed

Our investment size may differ slightly from one company to the next, but it tends to be driven entirely by situation-specific factors (needs of the company, syndicate composition, anticipated reserves, etc) … and not based on our belief.

Boston 305

Pari Passu or F.U.little guy

Professor VC

Another area where I''m not sure I stand is with some of the more formal referral and syndication programs that are emerging now. AngelList (which I remain a big fan) also recently launched a syndicate program.

A Choir of Angel Investors Sing Different Parts

Genuine VC

PROs of taking his angel money are the feeder system to venture financing of the next round and the vast network of portfolio CEOs which can be tapped into for connections and help. PROS: Industry-insider who serves as a validator for the rest of the investment syndicate, extremely helpful advice and network connections. CONS: Potentially not much value-add beyond initial financing round.

What Are Pre-Seed Rounds and Why Do They Exist?

View from Seed

With that in mind, let’s look at an illustration of these trends below, which demonstrates what’s been happening to early-stage financing rounds over the last 15 years or so. The reasons for the shift are: Late-stage financing froth.

How We Think About Values Versus Deeply Held Beliefs

Feld Thoughts

”) But at the end of 2013, when the JOBS Act became official and AngelList created Syndicates, we decided to understand the phenomenon better by participating in it. So, rather than sit on the sidelines, observe, and prognosticate about angel / seed investing, we created the FG Angels Syndicate on AngelList and have done around 60 seed investments in the last 18 months.

The Parlay

Haystack

Today, with more scout funds, syndicates, and newer funds forming weekly, those folks have parlayed whatever they’ve done before to get the chance to put money to work for others. Most GPs can’t actually make that commitment, especially younger ones, so either the firm or a bank will loan or finance those commitments against future cash flows. In gambling, particularly in sports, there’s a concept of “parlay.”

“Seed Is the New Series A” – Making Sense of the Confusion

View from Seed

A few weeks ago, Manu Kumar wrote an excellent post detailing the current state of the seed financing landscape. You may actually need to raise a few financing rounds just to get to a series A, so think about the syndicate you are constructing (will they be loyal to you?),

Venture Outlook 2016

Both Sides of the Table

Of course they built protection into many of their financings that allows them downside protection against IPOs if the price is lower than the price they paid. And what many people don’t realize is that most syndicates get what is known as “deal-by-deal” carry.

LP 428

A Primer On Google Primer

YoungUpstarts

Bootstrapping” is the strategy of growing your business through income – sales – or other personal or short-term financing (like credit cards) rather than going out and looking for investors or taking on significant debt.

When Should Startup Founders Discuss Valuation with Seed VCs?

View from Seed

Sharing these pricing expectations early with potential lead investors fundamentally qualifies your conversations, but it also runs the risk of prematurely losing a potential financing partner, or else it can reduce options to maximize your fundraise outcome.

35 at 15

OnlyOnce

First we announced a $35mm financing led by Vista Equity Partners, an exceptional private equity firm that I’d never heard of before the middle of the fundraising process a few months ago. This was a big week for Return Path.

5 Myths About Building A Successful Brand And Business

YoungUpstarts

Explore content syndication opportunities to expand the reach of your blog posts. Your finances and brand reputation may soar one year, struggle the next, and then make strides again after that. by Rachel Strella, founder of Strella Social Media.

Pro-rata rights: the good, the bad and the ugly

Fred Destin

The classic term you are going to see in a nasty seed term-sheet is a right to take [50%] of the next round of financing or a right to own [20%] after your next round of financing. Push your syndicate onto Angellist and make it all transparent. Investors Venture Capital financing pro-rata startup Fred Wilson posted an article to explain the concept and value of pro-rata rights , with his usual elegance in making the concept clear.

How Various Types of Startup Investors Affect Your Seed & Series A

View from Seed

Series A Dynamics: This is a middle-of-the-road outcome in terms of optimizing your next round of financing. This tends to be more common on the East Coast where there is more of a history of firms buddying up with the intention of doing the next couple rounds of financing together.

The Market Is Hot for Code Climate, NextView’s Newest Investment

Genuine VC

Today Code Climate is announcing that they’ve raised a $2M round of financing , led by us at NextView Ventures. Joining us in the syndicate are Lerer Ventures, Trinity Ventures, and Fuel Capital. When Chad Pytel introduced me to Bryan Helmkamp , CEO/Co-founder of Code Climate , I knew that I had to pay attention. Chad is the CEO of thoughtbot, a consulting firm that makes web + mobile apps for early-stage startups.

Chad 161

Goodbye Party Round, Hello Piggy Round: Should Seed Stage Founders Raise From Just a Single Investor?

Hunter Walker

d) AngelList Syndicates : I haven’t seen any Syndicate take the entirety of a seed round yet but I’m sure it’ll happen. And here there’s an aspect of ‘per deal’ economics that could serve as motivation since carry occurs on each deal and not the total dollars invested by the Syndicate lead. I guess it’s also appropriate to ask me whether Homebrew would ever do 80-100% of a seed financing round.

A Choir of Angel Investors Sing Different Parts

Genuine VC

PROs of taking his angel money are the feeder system to venture financing of the next round and the vast network of portfolio CEOs which can be tapped into for connections and help. PROS: Industry-insider who serves as a validator for the rest of the investment syndicate, extremely helpful advice and network connections. CONS: Potentially not much value-add beyond initial financing round.