Ten years ago, entrepreneurs Naval Ravikant and Babak Nivi launched a blog, called AngelList, to help founders. It had helpful posts but also a member list of 50 angel investors. But since then, the business has grown and expanded into other categories. So, what does it look like today? Well, let’s get an AngelList review.
Note that currently there are three main business segments:
AngelList Talent: Your company can post job ads on the site. Not only are the salary ranges listed but also the equity compensation. There are over 130,000 listings for hot companies like Robinhood, Slack Technologies (NYSE:WORK), Stripe and Postmates.
There are also no third-party recruiters allowed on the platform. Rather, there is a direct connection between the candidates and the companies.
AngelList Venture: If you take a look at other reviews AngelList, they will often refer to the company as a crowdfunding platform. But this is actually a misconception. AngelList Venture takes more of a traditional approach to in startups, in which you need to be an accredited investor (this has certain annual salary and net worth requirements) or an institutional fund.
There is also a minimum commitment to invest $50,000 per quarter or $125,000 per year. And as for exiting a fund, there are some options with sales to third parties. Although, it looks like AngelList will be providing its own liquidity options within the next few months.
Then what’s the advantage? For the most part, you get the benefit of the site’s extensive network. In other words, AngelList allows you to invest alongside many top VCs like Sequoia Capital, Andreessen Horowitz, Khosla Ventures and Founders Fund in some of the hottest startups – and with just one check. In fact, over its history, there have been more than 4,000 deals funded.
Note that AngelList Venture has built an extensive system that helps to manage and track the investment process. Services include electronic closing of deals; detailed updates; valuations; real-time performance benchmarking; tax reports; audits; and financial statements.
Product Hunt: This came about from an acquisition of a community website, founded by Ryan Hoover. Its focus is on getting feedback and social media distribution for new products. Some recent examples include Blush (allows anyone to make an illustration) and Email Mastery (a learning center for email marketing).
AngelList Review: Final Takeaways
Angel investing can definitely be lucrative. In some cases, the initial investments – say $100,000 or so – could wind up being worth over $1 billion! This has happened with companies like Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) and Uber (NYSE:UBER).
But angel investing is also one of the riskiest investments. The reality is that most startups fail or just wind up being average businesses. Only few have the right teams, market opportunities and products to get escape velocity.
This is why AngelList Venture is such a big help. It allows investors to mitigate the risks by focusing on vetted deals that have strong backers. And yes, there is the benefit of diversification.
As for the Access Fund, its different vintages have logged strong performances (when compared to benchmarks from Cambridge Associates). For the past five funds, the IRRs (internal rate of returns) have ranged from 6.2% (this is for the most recent one) to 19%.
True, this may not get you to a billion-dollar return. But then again, given the advantages of the fund structure, you will likely avoid losing a substantial amount of your capital.
Tom Taulli (@ttaulli) is an advisor and author of various books and online courses about technology, including Artificial Intelligence Basics, The Robotic Process Automation Handbook and Learn Python Super Fast. He is also the founder of WebIPO, which was one of the first platforms for public offerings during the 1990s. As of this writing, he did not hold a position in any of the aforementioned securities.
