AngelList explained - What is AngelList? Crowdinvesting Equity Crowdfunding - Republic, StartEngine,

Crowd Investing platforms or equity crowdfunding shows strong worldwide growth. Brands in the market are Republic, StartEngine, Wefunder, Microventures or Netcapital. They all have common features. In this video we learn about the platform of AngelList.

AngelList is one of the largest Crowdinvesting platforms in the world and is based in San Francisco in the US. It provides equity management, banking, fundraising, recruiting and analytics for high-growth U.S. technology companies. In addition, investors can invest in Venture Funds which are publicly available on the Crowdinvesting platform. Fund managers can run Venture Funds or Syndicates on the platform. AngelList´s fund managers have invested in more than 280 startups that have become unicorns valued at more than $1B. Examples of these companies include Stripe, SpaceX and Epic Games. In the year 2022 AngelList counts more than 16,800 investors and 2,900 fund managers. Both, funds and Syndicates have invested more than $6B of capital in startups since AngelList´s inception.

The first business unit is about fund managers. This business unit is divided into the subcategories of Venture Funds, Rolling Funds and Syndicates.
In the Venture Funds subcategory, the fund manager can raise capital, close deals, and manage the portfolio. AngelList takes care of all the back-office services, so fund managers can focus on deals. In the next category, Rolling Funds, investors subscribe quarterly so fund managers can raise new capital regularly and fundraise continuously.
In the final business unit, Syndicates, fund managers raise capital on a deal-by-deal basis, leveraging the AngelList Capital Network and deploying it to a single startup. The process is similar to investing in a Special Purpose Vehicle. The next business line is for founders and startups. Roll Up Vehicles allow founders to raise capital from investors with a single cap table entry and bundle small checks into one entity. Founders receive a single link that allows investors to send money to the startup online.
Another service is Stack, which includes equity management, banking, fundraising, hiring and analytics. With these services, companies can get automatically updated cap table, managing checking accounts and physical and virtual debit cards, make free transfers, set up data rooms, manage equity rounds and get automatically generated financial reports and startup metrics in real time.
Investors can invest in syndicates in addition to lead investors. As mentioned earlier, this process is like investing in a Special Purpose Vehicle to buy startups. The investors can build a portfolio deal-by-deal, alongside lead investors and fund managers. With the option of Rolling Funds, investors have a quarterly investment plan for investing in selected Venture Funds. Furthermore, investors can calculate their Rolling Funds returns.

For Venture Funds, fund managers must pay a fixed amount between $3.5k and $35k and a variable amount between 0.15% and 0.75% of the fund size - depending on the Assets Under Management in the funds. If the fund managers lead a Rolling Fund, they must pay a fixed amount of $2.5k and a variable amount of 0.2% of the fund size, depending on the Assets Under Management in the funds.
If the fund managers manage a Syndicate, they must pay a fixed amount of $8k and indirect costs in the form of a carry of 20% of profits. In addition, each fund manager of Venture Funds, Rolling Funds or Syndicates must pay a regulatory fee.
For the Syndicates, investors have to pay a certain percentage of the fixed amount of $8k in relation to the proportionate investment share and indirect costs equal to 20% of the profit.
To better understand AngelList´s business model, a business model canvas is used. In this business model canvas, we focus on the Value, Revenue and Customer segments. AngelList generates value for investors through access to early stage projects and small amounts of funding from a few hundred to a few thousand dollars. Startups can also gain access to capital and a broad investor base. If we take a closer look on the revenues, AngelList charges fixed amounts and a variable amount as a percentage of the total invested capital from fund managers and investors. In addition, AngelList charges startups service fees.

The videos explain different fintech business models and refer to the book Fintech Business Models by Matthias Fischer published in February 2021.

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