Yes. Using AngelList to raise money is legal. It doesn't impose any more legal burdens on a startup than raising money offline. In fact, hundreds of startups have used AngelList to raise money.
For more details, see the legal opinion that using AngelList is not a general solicitation and that AngelList is not a broker-dealer.
User profiles and public sections of startup profiles are visible to the general public and search engines by default. You can change your user profile to only be viewable by logged-in AngelList users on your privacy settings page.
Restricted sections of startup profiles, such as fundraising information, are visible only to people you select and are never visible to search engines.
If you're looking for a job, see Candidates: Who can see my profile? for more details about profile privacy.
If you have an AngelList user account, visit https://angel.co/settings/notifications to choose which email notifications you receive from AngelList.
If you'd like to permanently opt-out from all email communication from AngelList, please visit https://angel.co/unsubscribe.
To delete your account:
This deletes your account and closes your user profile. It does not delete any startup profiles you are associated with.
First, fill in all of the sections of your startup profile with concise, compelling information. Browse around AngelList, especially noting the featured startups, to find good profiles and learn from them.
Make sure you add all of your founders, employees, advisors, investors and so on. Your team members' followers get a feed update whenever a team member confirms a role.
Make sure you add the $ amounts for all investors in your current round. $ amounts for specific investors are displayed only to the startup's contact person and that individual investor.
Second, be proactive. Use search filters to find investors tagged with your startup's markets, in your location and that have invested in companies similar to yours. Use AngelList like a social network; follow people and companies, comment on posts and like others' updates.
If you think your startup followers will want to know about the post-pivot startup, edit your existing profile. If not, start a new profile.
For example, if the product and team are staying the same and you're just going after a different market, keep the profile. But if you're changing your product and market, and you've lost half of your co-founders, start a new profile. The case where you're keeping the team but changing the product and market is trickier — use your judgment. In either case, be sure to list the funding history of the company on the profile.
If your profile hasn't been published yet or is still in "Draft mode", you can delete it by going to company's settings tab and choosing "Delete Startup Profile".
Similarly, if you are the only person connected to your startup, you can delete it in the same way.
Each profile on AngelList can be connected to other founders, employees, advisors and investors. Removing one profile can remove important data from other profiles. We can't completely delete profiles from the site if they are connected to other users or profiles, but we will convert the profile to a "Community Profile" and remove some of the information you added when you created it.
If you're obviously fund-able (e.g. you previously started a company that made lots of money for its investors), you might want to consider adding less information to your profile. If you're not obviously fund-able, consider the risk of sharing your idea to be a cost of doing business. If you're not willing to take this risk, don't use AngelList.
Also, keep in mind that it is rare for someone to care enough about your idea to “steal” it.
Current Investors are investors that are investing on the same terms as this round, whether right now or have in the past. Previous Investors are the others, i.e. those that invested on different terms to those currently offered.
An investor does not have to have sent money or signed docs to be listed as Current, they just have to be committed to invest in the round and confirm the tagging.
Yes, AngelList Limited is authorised and regulated by the Financial Conduct Authority.
That means you can use AngelList both to find offline investors and to have an AngelList syndicate invest in your startup.
When you press "Yes, I'm Interested" or "Apply," the startup is notified. If they press Yes on your profile too, we make an email introduction. Press the pen icon next to the Yes button to add a note with a few words on why you'd be a great fit.
Press Skip or "X" to pass on the startup. You can find the startup in your Skipped list if you change your mind. You can press ☆ to add the startup to your Starred list and return to it later.
When you press "Yes" or "Get Intro," the candidate is notified. If they press Yes on your profile too, we make an email introduction. Press the pen icon next to the Yes button to add a note to the candidate.
Press Skip or "X" to pass on the candidate. You can find the candidate in your Skipped list if you change your mind. You can press ☆ to add the candidate to your Starred list and return to them later.
Violators will be permanently banned. More details are in our Terms of Service.
Go to Jobs to get started. Select "Create Profile" to set up your profile as a candidate. You can then browse through jobs and employers, or search using the filters along the top.
You can indicate your interest, and include a note, with any company that you see. Companies can also indicate their interest in you. If it's a match, you'll both get an email and can continue the conversation via email, the AngelList site, or our mobile app.
When you click Yes/Apply, the startup gets a notification including your full Talent profile.
You can see how your Talent profile looks to startups on the Preview tab. If you've uploaded a résumé, it's included in your profile.
By default, your AngelList profile is publicly visible. However, we will never indicate to your current or former employers and coworkers (as tagged on your profile in your Experience section) that you're looking for a job.
If you set your status to 'Secretly Looking,' only companies that you say YES/apply to will know you're looking for a job, and your profile will only be accessible to logged-in AngelList users (not search engines or logged-out users).
You can change your profile visibility settings on your privacy settings page.
You choose from your recruiting settings—Either all founders and current team members (as listed on your company's AngelList profile), or just the people you choose. Anyone with permission can post a job, view candidates, and take intros to candidates on behalf of your company.
By default, the person set as the recruiting contact for your company will be notified when candidates express interest in your company. You can also specify which team members receive notifications when you create or edit a job.
When you create or edit a job, you can specify which team members will receive notifications. You can have different people receive notifications only for specific job listings.
Startups are ranked on several algorithmic factors — the quality of your startup profile, your level of activity, and how candidates respond to your startup.
If you'd like to increase your visibility, you should:
Assuming you're logged into an account that has administrative privileges, you can click the "Settings" button at the upper right hand corner of the company profile page. As long as the person you're trying to add has an AngelList account that's confirmed as a part of the company, their name will show up in the dropdown menus for Profile Editor and you can add them there.
To remove someone, go to the same menu, but click the "X" next to their name.
Assuming permissions are in order, if you visit your company's profile page, there will be an "Edit Jobs" button underneath your job listings. Clicking that takes you to a management page where dropdowns will allow you to unpublish or delete any posted positions.
AngelList is a double opt in. A company says "Yes" to a candidate or vice versa and then the other party is sent a notification. The other party then has the option to respond. If they're interested and click "Yes" again, then a match is made. The company/candidate will be found under the Matches tab and an introduction email is sent to both parties to facilitate communication between them.
Once that happens, either party can reply to the email and it will go to the candidate or the recruiter from the company.
A-List is a new tool from AngelList that lets top engineers and designers fast-track their AngelList profile to hundreds of top startups. It offers a super-simple messaging interface that helps you directly find out what startups want to interview you — and then helps you schedule interviews & pass through rounds super quickly.
How It Works:
If you have other questions about the flow, email or chat us any time.
We built an algorithm that selects recently active candidates and gives them a score based on work experience, education, and skills. The A-List team then goes through the candidates with high scores and selects who to invite.
Good question (and you're right — AngelList Talent platform is awesome!)
A-List is by far the fastest way for top engineers and designers to start interviewing with top AngelList companies. We suggest using the AngelList Talent platform as you start thinking about what you might want next -- but to use A-List when you're ready to start interviewing.
Good question. A-List is pretty new, so we're only beta-testing it with candidates who our algorithms suggest are at least 90% qualified for A-List companies' open roles. Your friend may be selected one day — so feel free to have them email us if they are curious or have questions.
A-List currently works with well-funded startups and companies hiring for full-time top software engineering, data science, design, and engineering management opportunities in NYC or the SF Bay Area.
Nope, sorry. Companies can & do use A-List to indicate if they are willing to pay for your preferred salary down the line -- but you won't walk out with “offers” to show your boss. You can check out salary and equity data for thousands of startup jobs on AngelList though — just go to https://angel.co/salaries
It's super easy — just head to alist.co, connect with your AngelList profile and answer a few simple questions about your ideal job preferences.
Note: A-List uses your AngelList profile information instead of a resume, so we recommend polishing it up before making your profile live.
Your profile is live on A-List for up to two weeks. If you need to take your profile down before the two weeks are up, you can also change it in Settings >> Account.
Yes, because A-List message requests will expire in 72 hours (Note: this is partly how A-List connects talent and companies so quickly). Thus, be prepared to check out the company & decide if you're interested — otherwise the company will get auto-rejected.
Nope. We've automatically blocked them for you.
Nope. It's just the beginning of the conversation!
Yes, please ask your A-List point-of-contact in the chat feature!
Of course. But know that A-List is going to be time-consuming, so you may want to try it first before exploring other avenues.
Yes, you'll see the option to reactivate in the chat section!
Companies on A-List are currently only recruiting for full-time, local opportunities. We'll make an announcement when we expand to more flexible roles.
A-List is a platform that helps top startups quickly interview the top-ranked tech talent on AngelList.
How It Works:
If you have other questions about the flow, email or chat us any time.
Good question! You can and should use both — but they serve different purposes.
Generally, AngelList Talent is for building your startup talent brand, whereas A-List is for quickly interviewing top engineers or designers who will have a lot of options. You can still use AngelList to find top candidates — but you'll want to utilize A-List to reach those in-demand candidates before anyone else.
A-List was designed specifically for top engineers & designers, and so the design reflects the speed & convenience they want in a job search. It lets them privately get pitched by great companies when they're ready to listen, and lets them be upfront about what they want.
Worth noting: Unlike other platforms, A-List message requests hold top candidates accountable to respond to you within 72 hours. So they know by using A-List that they'll be respectful and cooperative with top startups like yours.
You only pay for A-List if you successfully hire a candidate, and have a 90 day cash-back guarantee. You don't pay anything until you hire someone — so browsing and messaging with candidates is totally free. Prices can be discussed with an A-List rep -- email firstname.lastname@example.org for more info.
If want to opt out of A-List emails, you can do so in your settings.
To edit or rename a stage, hover your mouse over the top of any stage, click the gear icon, and choose "Edit Stage Settings". This will trigger a popup with the options to change the stage name or enable interviewing and scheduling for that stage.
You cannot rename the Inbound, Matched or Hired stages.
To shift the position of a stage in your pipeline, hover your mouse over the top of the stage you'd like to move, click on the gear icon, and choose "Move Stage Left" or "Move Stage Right".
You cannot change the position of the Inbound, Matched or Hired stages.
To add a new candidate to a particular stage, hover your mouse over the top of the stage and click the "Add Candidate" button which appears. A new candidate card will be inserted at the top of that stage. You can then add the candidate's name and which role you're interviewing them for. Click "save" to to add the candidate to your pipeline.
Candidates that show up in Review are those that have been starred by your team. To source candidates, click on the Recruit tab and search for candidates that fit the role you're looking for. When you see someone that might be a good fit, click on the star icon to add this candidate to Review.
If you indicate interest in a candidate by clicking "get intro" and the interest is mutual (i.e. they also indicate they are interested in speaking with you), they'll appear in your Matched stage. Reach out to start the conversation!
Under the filters in the top left corner of the screen, select the position from the first dropdown. This will update the candidates on the board to just those applying for that job.
On the sidebar on the left side of the screen, click the chat bubble icon to open your messages inbox.
Click the "activity" button in the top right corner of the screen to open your activity feed.
Snooze is a great way for pausing candidates in your recruiting pipeline— perhaps they don't have time to continue the interview process, or have already accepted another offer. We'll send you a monthly reminder of snoozed candidates so you can follow up with them whenever you're ready.
You can view all snoozed candidates by selecting Snoozed from the second dropdown of filters.
Click on the "options" button in the top right corner of the screen and click "edit email templates."
First, open the profile of the candidate that you want to send a canned response to by clicking on their card in Track. Then, select the Email tab in the right panel of the pop up
If you already have a saved email template created, select the template you'd like to use in the Template dropdown. Confirm that the content of the email is what you intended, then hit Send!
If you haven't set up an email template yet, find out more info here.
Connections on AngelList reflect that the startup ecosystem is built on real relationships—investors backing founders, coworkers on teams, collaborators on open-source projects, classmates, mentors, and customers.
AngelList connections can include these relationships so you can find your strongest link to a candidate, job, investor or startup—and request introductions from your connections to meet the people you want to do business with.
Visit the Invitations section of your connection manager and click "Cancel" on any invites you'd like to cancel. We'll stop sending emails and reminders immediately.
You can directly message any investor who follows your startup.
You can request an introduction to any of your second-degree connections by clicking “Request Intro.”
No. Almost all deals on AngelList are private to accredited investors only. This means that they fall under the 506(b) regime and are not public fundraising under Reg A or general solicitation under 506(c). However, companies can elect to raise under general solicitation if they wish.
Public fundraising allows startups tell the general public they're raising money—on Twitter, Facebook, blogs, TV, advertisements, etc. The legal term for public fundraising is ‘general solicitation’.
Whether startups raise money publicly or not, they can only accept money from accredited investors.
Startups that raise publicly also have the legal burden of verifying that their investors are accredited.
If a startup that raised publicly closes their round on AngelList (via syndicates), AngelList will handle all 506c investor verification.
Adding your startup or funding round to AngelList doesn't affect whether you are raising publicly or privately. Fundraising activity on AngelList is only visible to logged in, accredited investors.
If you announce your raise publicly (for example, by social media or to your company's newsletter), you will need to collect evidence from all investors to verify their accredited investor status.
If you close the round on AngelList (via syndicates), AngelList will provide accreditation verification for all investors in your round, free of charge. If you close your round offline, your investors can still get verified for free by AngelList, and can provide our verification letter to you or your company counsel at closing to satisfy the SEC's requirements.
Good question. Public fundraising can be useful for companies with a customer base of accredited investors (e.g. service for physicians) or for companies with a large social media reach.
However, startups should be aware that enabling public fundraising will make it easier for press to disclose details about their fundraising efforts. Also, verifying that all investors are accredited takes time and effort, and may discourage some investors from participating in the deal.
By default, startup fundraising information is just available to investors. This prevents the general public from seeing fundraising information.
To avoid triggering the requirements of general solicitation, don't promote your raise publicly, and ask your employees, investors and advisors to refrain from public discussion also.
AngelList only supports fundraising from accredited investors (whether you raise money publicly or not).
The SEC has adopted “crowdfunding” regulations that allow startups to raise money from non-accredited investors on certain registered crowdfunding platforms such as Republic.
When you raise money publicly, you must have a higher standard for accreditation verification: you must take ‘reasonable steps’ to verify that your investors are accredited. For example, your investor could provide an income tax form. It is not enough for your investors to merely swear that they are accredited. Fortunately, AngelList will do the work of collecting the evidence that your investors meet this higher standard.
If you choose not to fundraise publicly, you can meet a lower standard of having a ‘reasonable belief’ that your investors are accredited. Historically, investors have sworn they are accredited in this case—although the SEC has stated that may not be enough.
If you are covering a startup that is fundraising on AngelList, you should avoid writing about financing details for companies that are not publicly raising money – also known as general solicitation. If you do write about them – even by mistake – it can cause them legal problems due to SEC regulations. Here's how to steer clear of trouble.
It is okay to write about company fundraising details on AngelList if:
All of the above are visible without being signed in to an AngelList account – in fact, this is how you should browse, since all you will be able to see is publicly available info.
If they're not meeting any of the conditions above, don't discuss or publicize their fundraising details. Only a small percentage of companies on AngelList have chosen to fundraise publicly. Unfortunately, doing so causes them to bear a lot of extra expense (and potentially lose investors) due to the need to collect a lot more information from potential investors. Publishing information about private companies would "break the seal" – automatically making them operate under the SEC’s 506c rule, which covers general solicitation.
Also: if you attempt to pose as an investor in order to get access to info about companies that are raising privately, we will permanently ban you from AngelList.
All the investors have stated that they are accredited. The vast majority of the investors have also made several angel investments.
You should verify that every investor you raise money from is accredited, whether or not you use AngelList. And you should treat each investor you meet on AngelList as if you just met them on the street. We give you information about each investor and display the source of that information, but we don't claim that they're good people.
You can message anyone you're connected to or who follows your startup. You can also message anyone who requests an intro to your startup.
You can also ask people on your team to forward your messages to their connections. And the AngelList team may also give you permission to message certain people.
Finally, you can message anyone who messages you first.
Companies are valued with industry-standard methods. For early-stage companies, valuations are generally marked up or down to a company's latest priced financing round, as disclosed to us by portfolio companies or other investors. While AngelList’s valuation sources are believed to be reliable, we do not undertake to verify the accuracy of such valuations. Companies that have not received investments in a priced round since the last mark are held at the last mark or marked down at our discretion according to our valuation policy. Our valuation policy typically calls for marking an investment to zero upon news of impairment or a significant pivot. Our valuations typically do not account for liquidation preferences and other non-financial terms that may affect returns. Investments in later-stage companies may be sent to a third-party for valuation if (i) the company’s estimated value is over $100M, (ii) the investment is estimated to be worth over $10M and (iii) 24 months have passed since the last investment. Smaller investments in later-stage companies are valued using the same methodology used for early-stage companies.
The valuation of a fund is determined by aggregating the valuation of the underlying portfolio companies.
Accredited investors meet standards defined by the US Securities and Exchange Commission which allow them to invest in certain private securities offerings. Most startups raising money do so from accredited investors only.
The SEC web site contains the full definition. In general, any of the following would meet the standard:
• Individuals with annual income over $200K (individually) or $300K (with spouse) in each of the last 2 years and an expectation of the same this year
• Individuals with net assets over $1 million, excluding the primary residence (unless more is owed on the mortgage than the residence is worth)
• An institution with over $5 million in assets, such as a venture fund or a trust
• An entity made up entirely of accredited investors
As of September 2013, the SEC requires companies that publicly discuss their financing to take steps to verify that investors are accredited. This involves providing documentation that shows you meet one of the accredited investor thresholds.
Yes. The regulations governing general solicitation require evidence from all investors, not just U.S. investors.
If you are accredited based on income, you will need to provide documentation of income for the past 2 years. This can be in the form of tax returns, W-2s or other official documents. This is usually the fastest way to get accredited.
If you are accredited based on assets, you can provide recent brokerage, bank account or similar statements clearly showing your name, the date and the value of your account(s). In this case, we will also pull your credit report and deduct any non-mortgage debts shown from the value of your assets to arrive at net assets.
You can also provide a recent letter from a third party verifier like a licensed CPA, attorney, investment advisor or investment broker. Our accreditation verification process will allow you to trigger an email to your verifier using acceptable language.
Documents you upload as evidence of accreditation are kept private and are only used to assess your accreditation status. Licensed attorneys and CPA's review these documents to ensure that the relevant accredited investor thresholds are met.
If you claim that you are an accredited investor because you have over $1 million in net assets, then the company you are investing in is required to verify your debts in order to confirm that your net assets are greater than $1M. AngelList requests this credit report and includes only total debts (excluding mortgages) when verifying your accredited investor status.
No. We perform a "soft-pull" credit report, which will not affect your credit.
A syndicate allows investors to participate in a lead investor's deals. In exchange, investors pay the lead carry.
Here's an example: Sara, a notable angel investor, decides to lead a syndicate. The syndicate investors agree to invest $200K total in each of her future deals and pay her 15% carry.
When Sara makes her next investment, she offers to invest $250K in the company. She personally invests $50K and offers the remaining $200K to her syndicate.
If the investment is successful, the syndicate investors first receive their $200K, after which every dollar of the syndicate’s profit is split 80% to the syndicate investors, 15% to Sara and 5% to AngelList Advisors. AngelList Advisors is a venture capital exempt reporting advisor with the Securities and Exchange Commission, and a subsidiary of AngelList.
Investors get access to deals, leads get carry and startups get more capital with fewer meetings.
Startups don’t pay for syndicate investments. Investors pay 0-25% deal carry to the syndicate lead, and 5% deal carry to AngelList Advisors.
Investors also pay the out-of-pocket costs for each deal—currently $8K in the US and £8,300 in the UK. These costs are paid to third parties such as state regulatory agencies, payment processors and accountants—AngelList or AngelList Advisors does not profit from these fees.
The lead and AngelList Advisors do not receive carry until the syndicate investors’ investments and out-of-pocket costs are returned.
Syndicate investors don't invest directly in a company. They invest in a special purpose fund that is created specifically to invest in the company. The fund is formed as a series LLC.
The fund is managed by Assure Fund Management and advised by AngelList Advisors. The lead also serves as a contractor of AngelList Advisors.
The lead usually does not invest through the fund but is required to disclose to AngelList Advisors how she votes, or if she buys or sells shares.
If there is a lead, the fund will usually vote with the lead unless she has a conflict of interest or there are other unusual circumstances. If there is no lead, the fund will usually vote with the majority of other shareholders.
Carry is a share of the profit of an investment that is paid to the managers of the investment. It is short for ‘carried interest’.
In a VC fund, the limited partners of the fund pay carry to the general partners if the entire fund is profitable. This is called fund carry or net carry.
In syndicates, investors pay carry to the lead for any profitable investment. This is called deal carry. Syndicates use deal carry so investors can opt out of any investment or stop investing anytime.
Syndicates receive pro rata rights if the lead negotiates them with the startup. If a syndicate has pro rata rights, syndicate investors in the initial round may have the opportunity to invest their pro rata allocation in subsequent financings. Any remaining allocation may be offered to other investors or funds. The pro rata may not be offered to syndicate investors if the lead does not participate, if it is unlikely that a reasonable amount of the pro rata will be filled, or for other reasons. Pro rata rights vary in strength and enforceability. Pro rata rights may be waivable by a majority of investors in the round or waived as a condition to a new financing round.
The fundraising information of a syndicate deal is visible to accredited investors, while general information about the company is visible to the public.
A syndicate lead can also restrict the fundraising information to investors who have been accepted into her syndicate. In this case, she may also restrict general information about the company to these same investors. Furthermore, the company may limit the information visible to investors.
Yes, but only if they are invited by the syndicate lead. Syndicate investors generally have priority for investments that are oversubscribed.
There are three institutional funds that primarily invest in syndicates.
As a group, these funds are referred to as platform funds. Some of these funds may receive more information from companies, syndicate leads, AngelList employees and AngelList affiliates than other investors in a syndicate.
To create a syndicate, click the ‘Syndicate’ button on your user profile. You can then enter information about how many deals you expect to syndicate each year, your typical investment size and so on.
You can then market your syndicate to investors who can agree to invest in your future deals.
To syndicate a deal, select the ‘Manage Syndicate’ button on your user profile, then select the ‘Deals’ tab and select the ‘Syndicate a Deal’ button.
Yes. Individuals and VC funds can both form syndicates.
If your fund has LPs, you should confirm that your LP agreement allows you to form a syndicate.
Any carry from a syndicate deal can be distributed to your fund’s GPs, LPs or split between them.
There are no requirements to simply start a syndicate. Your commitments begin when you syndicate your first deal. You must:
Leads are not required to syndicate every investment they make.
Any accredited investor can apply to invest in your syndicate. You can then accept or reject the application. You can also remove investors at any time. You should only accept into your syndicate investors whom you trust and want to work with.
Generally, no. Leads usually invest directly in the company. The syndicate investors invest through a separate fund advised by AngelList Advisors. AngelList Advisors typically advises the fund to follow the lead’s votes and other decisions related to the investment (e.g., sales, pro ratas).
The minimum investment for a lead who is investing her own money is generally 2.5% of the amount that the syndicate raises from individual investors. The minimum investment for a lead who is investing out of a fund raised from limited partners is generally 20% of the amount that the syndicate raises from individual investors.
This minimum only applies to capital raised from individuals. Syndicates can raise an unlimited amount of capital from institutional investors such as platform funds.
For example, if a lead puts $5K of her own money in a startup, she can raise an additional $195K from individual investors in her syndicate. She can also raise an unlimited amount of capital from a platform fund like CSC Upshot.
The minimum investment may be reduced if a notable investor is making a significant investment in the round. It may also be reduced in pro ratas and other special situations. Investors in the syndicate will be notified if the minimum is reduced.
Investors can also view the lead's investment amount in any deal and opt out of the deal, for any reason.
Learn more about the economics of syndicates.
Each investor’s commitment will be reduced pro rata if your allocation is smaller than the total commitments from syndicate investors.
Here's an example. Sara has a syndicate with 10 accepted investors. Each investor has committed $10K to the syndicate, for a total of $100K. Sara personally invests $20K in the deal and asks for an additional $100K for her syndicate. However, the startup is only able to allocate $50K to the syndicate. So each of her syndicate investors will invest $5K instead of the $10K they requested.
If an investor‘s reduced amount is less than the minimum investment for a deal, the investor will invest the minimum investment. In this case, if the reduced amounts still exceed the syndicate's allocation, the lead will use her judgment to reduce investors’ amounts for that deal. The lead will likely favor backers who have expertise in the company‘s markets or have large investment amounts.
In some deals, a maximum may be placed on aggregate commitments by the platform funds.
Yes. Pro rata rights are important for AngelList and syndicate leads to invest additional capital in winning investments and generate larger returns. For syndicate leads this is especially valuable, since they can still earn carry in follow-on rounds. Leads should negotiate for pro rata rights on all deals.
The lead's carry in a pro rata is the same as the initial round, as long as her investment is greater than or equal to either her pro rata allocation or her investment in the initial round, whichever is smaller.
The lead's carry in a pro rata will be reduced by 5% if her investment is less than either her pro rata allocation or her investment in the initial round, whichever is smaller. AngelList Advisors, the fund's investment adviser, will receive this additional carry in addition to its usual 5% carry. This is due to the added work and risk, and since AngelList Advisors is less able to look to the lead’s decision when advising the fund.
In both cases, if the lead does not provide access to the pro rata and provide relevant information, she will not earn any carry and AngelList will receive a total of 10% carry.
Most leads use their full name for their syndicate because they expect investors to join the syndicate on the basis of their personal reputation.
If you are investing on behalf of a firm or if you focus on a specific type of investment, you may wish to choose a different name for your syndicate.
Investors should be able to clearly tell who is running the syndicate from the syndicate's name. The name should also not be generic or contain the word ‘syndicate’.
“FG Angels” is a good name for a syndicate. “Angel” is not.
“Hardware Investments by Vinod Khosla” is a good name for a syndicate. “The Hardware Syndicate” is not.
By default your deals are not public and must be compliant with 506(b) of Regulation D. These deals may not be marketed publicly.
You may market syndicated deals subject to section 506(c), commonly referred to as general solicitation. You must notify AngelList prior to launching your syndicate if you are operating under 506(c) so that AngelList can comply with all relevant regulation.
If one of the AngelList-affiliated funds invests in your deal, the AngelList team will offer to feature it. Your deal may also be featured if one of these funds approves of featuring the deal. The AngelList-affiliated funds automatically consider every syndicate deal for investment.
Featuring happens with the permission of the founder. The AngelList team may feature your deal to a relevant segment of the investor base only.
You are committing to invest in the syndicate’s deals, on the same terms as the lead. You also agree to pay the lead and AngelList carry on those deals as well as the out-of-pocket costs of each deal.
This is not a legally-binding agreement and you can opt out of any agreement or stop investing at any time. All of your existing investments remain intact if you stop investing.
When the next deal is syndicated by the lead, you will be notified and given the opportunity to invest or opt out of investing, depending on the terms of your commitment. The lead will also provide her investment rationale and disclose conflicts of interest.
Syndicate investors receive less information than direct investors. An AngelList entity or the lead will distribute the following documents to investors when they invest in a syndicate deal:
You will generally receive returns, if any, when the company is acquired or has an IPO. There may also be other opportunities for the syndicate to sell its shares.
When there is an exit opportunity, AngelList Advisors, in consultation with the lead, will advise the syndicate fund regarding the best time to sell the syndicates’ shares. The decision to sell the shares is then made by Assure Fund Management. This will generally happen soon after the shares become liquid. If there are any profits, they are distributed to the syndicate investors.
The syndicate fund, like all investors, is bound by agreements with the company and can only sell shares in certain situations.
No. You can opt out of any deal. Many leads indicate whether they expect investors to participate in every deal.
Investors can increase or decrease their investment in a particular deal. Any change is subject to approval by the lead. Investors can also opt out of any deal.
The lead may also reduce an investor’s investment in a deal, particularly if it is oversubscribed.
Investors that regularly lower their investment amounts or frequently opt out of deals may be removed by the lead.
Syndicates are intended to complement, not replace VC funds. Differences include:
Raising the minimum investment would cause some leads to stop syndicating their investments. Instead, they would start or join venture capital funds, which typically have no minimums.
The partners of a VC fund typically provide 1-5% of the fund's capital, but also take out 15-25% in management fees. In effect, they don't make a contribution to the fund.
The minimum for leads investing their own money in a syndicate is 2.5%. And the minimum for leads investing out of a fund is 20%. Except in rare cases, leads receive no management fees from the syndicate.
So, for the vast majority of leads, syndicates are already more expensive than venture capital funds. Raising the minimum would cause some leads to stop syndicating their investments. They would instead invest through a venture capital fund.
Raising the minimum would also cause some leads who are new to investing to stop altogether, because it is already a significant portion of their net worth. This would lead to less diversity of investment opportunities from new leads.
Investors who are unhappy with a lead's contribution can always opt out of an investment. They can also invest in AngelList Funds, which make investment decisions on behalf of investors, for no additional cost or carry.
Learn more about the economics of syndicates.
You sign documents to invest in a special-purpose fund that invests in the company. This signature is provided by simply checking a box.You do not sign the company’s financing documents. The company's financing documents are signed by Assure Fund Management for the special-purpose fund.
For each syndicate deal, investors become members of a special-purpose fund formed to make the investment. That fund will purchase preferred shares, convertible debt or other instruments issued by the company. Certain taxable events may result in income or losses flowing through the special-purpose fund to its investors. Investors with taxable income or loss will receive K-1s.
If the fund holds an equity interest in a portfolio company, there is a taxable event on exits or when the company is dissolved or files for bankruptcy. In rare instances, there may also be a taxable event if the fund receives a dividend or distribution.
If the fund purchases convertible debt, prior to conversion into equity, there may be a tax consequence for your portion of the interest on the debt or in connection with the cancellation of debt such as in a bankruptcy.
Be sure to consult your tax advisor.
For each syndicate deal, investors become members in a special-purpose vehicle, structured as a US series LLC. Each syndicate will typically send out IRS Forms K-1 to all its members, both foreign and domestic, in any year in which it has taxable income or deductible expenses.
We understand from informal consultation with tax counsel that, generally, income and distributions from AngelList syndicated deals to non-US investors without substantial US business involvement are exempt from US tax and withholding requirements, provided that such investors have submitted the appropriate FATCA Related Forms.
AngelList is not qualified to provide tax advice and the above should not be read as tax advice. There are many important exceptions to the generalization stated above, so please be sure to consult your tax advisor and relevant international tax treaties before making an investment.
Syndicate investors don't invest directly in a company. They invest in a special-purpose fund that is created specifically for each investment. This fund then invests in the company. The corporate form of the fund is a series of an LLC.The fund is managed by Assure Fund Management and advised by AngelList Advisors, a subsidiary of AngelList. The lead serves as a contractor of AngelList Advisors, providing certain information related to the investment. AngelList Advisors and the lead each receive carry from the special-purpose fund
A management fee is a quarterly or annual fee added onto a deal, meant to compensate the lead for their time and expenses. Leads may charge management fees for hiring employees, maintaining an office, paying salaries, etc. This is similar to how venture capital firms operate. However, in the case of an AngelList syndicate, because investors can opt in or out on each deal, all economics (including management fees) are calculated on a deal-by-deal basis.
This is a new feature AngelList is exploring. To start, only leads who incur substantial costs running their AngelList syndicates will charge management fees. Right now this only applies to Gil Penchina. AngelList will determine if other leads qualify for management fees in the future.
For each deal, the lifetime total management fee (ex. 3%) is collected upfront and drawn down by the lead over time (ex. 0.25% quarterly, for three years). If there's an exit before the entire management fee is drawn, undrawn capital is returned to investors. If there's a profitable exit, the lead must return the entire amount raised (including the management fee) before earning any carried interest.
Management fees allow leads to hire staff, maintain offices, and be competitive with venture capital firms that have fees at their disposal. Many of the world's top investors are VC General Partners. By introducing management fees, AngelList is better equipped to support this cohort of investors and attract them to share their deals online.Over time, many of the current syndicate leads will face financial pressure to start or join venture capital firms where they can earn fees to offset their costs. They may choose this instead of syndicating. Management fees help mitigate this financial pressure and retain leads on the AngelList platform.
Management fees are displayed on the deal page alongside the setup costs that you pay on each deal. There is clear disclosure on deals with management fees. No additional work is required from you to participate in these deals.As always, you should review deal terms before participating and opt out on deals where you don’t like the terms. There are dozens of leads on AngelList with quality deal flow and no management fees.
First, you must have a syndicate lead.
You must also be a U.S. C corporation, S corporation or LLC (only if the LLC is issuing debt in the financing). U.K. corporations also qualify.
Other types of entities may also be syndicated—please contact email@example.com to discuss an exception.
The syndicate will generally invest on the same terms as the syndicate lead.
You can post an update by selecting the ‘For Investors’ tab on your startup profile.
You are not required to share any information or communicate with your syndicate. But many companies choose to post monthly updates and ask investors for help. Syndicate investors are often experts in your market and can provide advice and introductions.
Although investors are under NDA and forbidden from forwarding confidential information, you should only share information at your own risk.
Syndicate deals can accept investments for 30 days after launch. Most deals close within 3 weeks of launching.
If you are provided with access to a syndicate deal, review information provided by the company and the deal lead carefully. AngelList and its affiliates as well as their agents take no responsibility for and do not endorse any information concerning companies or deal terms. Should you decide to invest after performing your own diligence (including reviewing the relevant private placement memorandum, subscription agreement and operating agreement), you will provide various information in the subscription process and execute a copy of the subscription agreement and the operating agreement online.
An investor account is a repository for funds. You can transfer funds from your bank to your investor account and use those funds to invest in startups and syndicates.
You can also use the account to receive distributions when one of your investments has an exit.
You create an account when you invest in a startup or fund a syndicate.
There are no tax consequences. Your funds do not earn interest and are not considered an investment.
As an investor in the fund, we are required to send you a K-1 from the fund when it has a filing requirement. We also send the information to the IRS. Whether or not you need to file a US tax return depends on many factors. Since we are not tax advisors, we suggest that you contact a CPA or tax attorney who can give you personalized guidance.
We do not shut down SPVs or write off the investments before a bankruptcy or other official proceeding has run its full course.
Fund X neither received income nor incurred any expense during the year and therefore had no tax filing requirement. As such, no K-1s were issued for the fund.
The assets held by the funds are accounted for at their cost basis. As these funds are only passive investors, we do not mark to market. Only active dealers and traders in securities may elect the mark-to-market accounting method.
The due date for furnishing K-1s to investors is the same as the due date for filing the Fund's tax return. The initial deadline for the 2016 tax year is March 15. However, if additional time is required to file an accurate return, an extension of time to file may be granted. Once an extension has been filed, the deadline becomes September 15. By virtue of the unavailability of certain required information, this was the earliest we were able to issue the K-1s.
Under tax current law, capital gains are not taxable to foreign investors and therefore we do not withhold. However, there are provisions of FATCA (Foreign Account Tax Compliance Act) and Regulation § 1.1473-1 which state that capital gains will become a withholdable payment. Currently, this is set to be enforced starting in 2019.
As we are not tax advisors, we are not in a position to aid you in filling out the form. Please click on the links below for instructions to the forms. If your require any additional guidance, we suggest that you contact a CPA or tax attorney who is familiar with your situation and can provide you with individualized advice.
AngelList Funds are a convenient way for accredited investors to build a diversified portfolio of startups. One up-front investment gets you exposure to each fund's target number of startups.
AngelList Advisors (an AngelList entity) invests each fund's capital in select syndicated deals on AngelList. We return capital when any company in which the fund invests exits. This is not like a traditional VC fund with professional, compensated GPs; this is a no-fee fund of funds that broadly invests in syndicates on AngelList. This is suited to investors taking a diversified approach to investing rather than picking individual companies or syndicates.
Funds are designed to give broad market exposure, either to the early-stage market generally or to a specific sector (depending on the fund in which you invest).
There is a multi-stage selection process that includes, among other things, evaluating co-investors, conflicts, concentration in any one syndicate and non-arms length transactions. We may not apply the same process to every deal.
AngelList Funds do not charge any management fees.
A small portion of the capital will be used to cover the out-of-pocket costs of setting up and administering each fund over its lifetime. Each individual investment also has out-of-pocket costs (and in rare cases a management fee payable to a lead) that are covered pro rata by the investors, which will include the fund.
The total out-of-pocket costs for each fund are estimated to be $50,000 or more.
The investment period depends on the amount of deals and follow-ons done by the Fund, and the amount per deal. We currently estimate that it may take 2 or more years to invest $5M.
Thereafter, the fund will continue to hold the investments until each position has been exited, liquidated or closed, and realized net profits, if any, have been distributed to investors. We estimate that this may take up to 8 years, or more.
You can't opt out of an individual investment. You can invest more in specific companies by clicking the Invest button on that company's profile, where available.
Funds may exercise pro-rata rights to make follow-on investments in deals where there is a VC firm leading the round, the valuation is higher than the previous round, the total amount raised is higher than the previous round and/or there are new investors in the company.
Funds will disclose fund investments after they are finalized, and may provide qualitative updates to investors when available.
Funds will not post audited financial statements. Funds will not mark valuations to market each year given the extreme difficulty of doing that in an accurate manner for early stage investments.
We plan to distribute proceeds from any exits as we receive them but may bundle distributions together to reduce administrative costs.
We plan to distribute any public company stock and cash received as it is received. We may distribute stock or cash on a quarterly basis if the volume of receipts is very high. We plan to hold private company stock until it is liquid.
Maiden Lane is designed for institutional investors, like endowments and formal family offices, whereas AngelList Funds are for investors committing as little as $20K. Maiden Lane leverages AngelList and Syndicates but it is legally independent and professionally managed by two general partners.
|Maiden Lane||AngelList Funds|
|Who's it for?||Institutional LPs||Individual investors and funds|
|Fees||Actual costs for LP reporting, audit, insurance, legal, accounting, etc.||Same as investing directly in the syndicated deals|
|Carry||30% (net of syndicate lead carry)||Same as investing directly in the syndicated deals|
|Minimum LP Investment||$1,000,000||$25,000|
|Targeted deal volume||100||At least 100 deals|
|Approximate investment per deal||$200,000||$25,000|
|Deal composition||Syndicates that will take $200K and non-syndicated companies that raise through AngelList||Syndicated deals selected by AngelList Advisors, sometimes restricted to specified sectors|
|Access||No difference; Syndicate Lead chooses backers.||No difference; Syndicate Lead chooses backers.|
First you need to create a "company" profile for your firm. If you don't have one already:
In the header of your profile, click "Edit" to reveal a control to set your company type. Enter "Incubator", "VC Firm", or whatever label is appropriate. You're all set.
After you have created a company profile and set the Company Type to "Accelerator", visit the "Applications" profile tab and click [Add an Application].
Email us at firstname.lastname@example.org.
If you discover a security vulnerability, please email us confidentially so we can fix it. Please do not discuss it publicly. Also, please don't use it to destroy the site.
We'd like to thank the following for reporting vulnerabilities to us:
Yes, you can use it to contact people, hire, manage your company's profile and fundraise offline.
Online fundraising products are available to EU startups but there may be restrictions on accepting investors from your home country. Contact email@example.com to discuss specifics.
Public fundraising is not permitted in most European countries. Check with your lawyer about your country's rules.
Yes. However, investors from the same European country as the company may not be able participate in the syndicate.
Under US law, you can as long as you meet the US tax & legal obligations:
UK syndicates use a different legal structure to allow UK investors to benefit from EIS and SEIS tax breaks. Backers co-invest into the startup alongside the Lead. We use a nominee, Capita IRG Trustees Limited, to hold shares in the startup on behalf of the Backers.
Investor based in the EU who meet UK accreditation standards can invest in UK Syndicates. If you meet US accreditation standards you will qualify as an accredited investor in the UK.For questions regarding investors who are based outside the US and EU please get in touch with us at firstname.lastname@example.org
The Syndicate Lead will invest directly into the startup. Backers co-invest alongside the lead on the same terms by signing a co-investment agreement. This co-investment agreement allows our Investment Manager, Larpent Newton, to invest in the Startup on behalf of the Backers. Backers agree to pay the Lead and AngelList carry.
Yes - if the company is a qualifying investment and the Backer is a UK tax payer. Please note that the tax treatment of your investments may change and you should always seek tax advice when investing in Startups.
AngelList Limited is authorised and regulated by the Financial Conduct Authority.
Some Syndicate leads have opted into using the existing US based structure to run their syndicate.
UK investors can invest in all syndicates on AngelList, regardless of location and currency denomination.
The Jobs by AngelList app is an iOS app that makes it easy to swipe through opportunities, connect with potential companies and employees, chat with your matches, and manage your process.
The app features:
To turn on recruiting:
It can take a little while before companies start matching with you. When a company that you've expressed interest in says "yes" to you, you'll receive a notification via the app, as well as an email. You'll be able to chat with that company to set up a time to meet. You can reply to the emails, or in the app -- they will remain in sync.
To increase your chances of getting a match:
Currently, messages between you and your matches are exchanged via email or the in-app chat. The messages feature on the site is not currently used for messaging with your matches.
A "one-to-many" job application service for software engineers. You complete an online coding quiz. If you pass, you'll receive recommended companies from the AngelList platform that match your preferences. You then get warm introductions to companies that you're interested in and skip past recruiter and technical phone screens.
To give yourself more high-quality options as you search for your next job.
If you pass our quiz, you get warm introductions at 100 top technology companies. These companies are vetted based on things like team quality and company traction. Warm introductions are better than applying directly.
You complete an online quiz. This consists of 16 multiple choice questions covering coding skills, data structures, and algorithms. At the end, there's a practical question where you write code in an development environment and run it. If you pass that, you move onto the technical interview. Then, we recommend companies for you to get introduced to.
Approximately 100 top technology companies from the AngelList platform. All of these companies are hand-picked by the AngelList team based on strength of engineering culture, and strong business fundamentals. The companies span a variety of stages (seed, series A and later stage).