Innovating on Innovation with AngelList's Naval Ravikant | Disrupt NY 2017

Transcript

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Summary

Navall Ravikant, a serial entrepreneur and investor, discusses the new funding model introduced by AngelList. The platform now allows angel investors to run small venture funds, democratizing the access to venture capital. Ravikant also explains the importance of scaling venture capital to meet the growing industry demand, and the need for smaller investors who can provide relevant advice and support to startups. He mentions the VC firms and LPS involved in this effort and how it can help companies to find the right investors. Additionally, Ravikant talks about the future plans of AngelList, including expansion to different countries, the acquisition of Product Hunt, and the focus on recruiting.

Questions & Answers

Q: What does the new funding model introduced by AngelList allow angel investors to do?

The new funding model allows angel investors to run small venture funds, making venture capital more accessible and democratized.

Q: What is the main objective of the new funding model introduced by AngelList?

The main objective is to scale venture capital to meet the growing industry demand and provide smaller investors the opportunity to support and advise startups.

Q: How does the new funding model work for venture funds on AngelList?

Angel investors can start with a small fund of half a million to a million dollars. As they build their track record and demonstrate success, they can get access to larger funds. The funds are short-lived and allow backers and limited partners to evaluate and commit to the budding venture capitalists.

Q: Are these new small venture funds available for everyone on the platform?

No, currently these funds are available for the most proven individuals on the platform. However, AngelList aims to scale and provide funding opportunities to more early-stage entrepreneurs.

Q: Which VC firms and limited partners are involved in this funding effort?

The VC firms involved include accomplice, Foundation Capital, Bain Capital, and Crosslink Capital. In addition to that, there are traditional limited partners like CSC Upshot Fund, as well as thousands of accredited investors and family offices on AngelList.

Q: How does AngelList help companies to find early-stage customers and investors?

AngelList offers a network and access to investors, allowing companies to connect with those who can provide funding and expert advice. It also provides a platform for startups to launch and promote their products, such as Product Hunt.

Q: Is there any risk of signaling if the lead angel's fund doesn't want to get involved in future funding rounds?

While signaling risk is a concern, most lead angels have multiple limited partners and they are not contractually obligated to show every deal to their LPs. It's more of a relationship and friendship-based process, minimizing the signaling risk.

Q: Why did AngelList introduce the new funding model now and not earlier?

It took time for online fundraising to become legal, and for AngelList to have enough good angels on the platform. With the success of syndicates and the growth of the platform, they could now introduce these small venture funds.

Q: Is AngelList planning to enter the secondary marketplace business like Cedars?

AngelList is always exploring new opportunities, but currently, the secondary market for early-stage companies is not very liquid. They are looking at ways to make the data they have on the platform useful, but it's not a focus at the moment.

Q: How many investors are currently on the AngelList platform and is it still mainly Silicon Valley-based?

There are about half of the deals on AngelList that are Silicon Valley-based, but the platform has expanded to other regions such as Canada, New York, LA, and Seattle. They are also planning to roll out in India. The number of investors on the platform is not mentioned.

Takeaways

AngelList has introduced a new funding model that allows angel investors to run small venture funds. This model aims to democratize venture capital and scale up the industry to meet the growing demand. It provides smaller investors with the opportunity to support startups and offer relevant advice. AngelList is also focused on expanding to different regions and has plans to enter the recruiting market. The platform aims to be self-sustaining and profitable in the long run, through various revenue-generating services.