This month I finished investing my first angel fund, the LAUNCH Fund. It took 35 months to deploy the $10m fund in 85 startups. During that same period, my team and I have run the most active “angel syndicate” in history.
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So I’ve been a “professional angel” for about three years, with three years of “dabbling” in angel investing as a Sequoia Scout before that. It’s been extremely rewarding, personally giving back to fellow founders, and obviously hitting a home run every 50 investments has made it a financially sound decision (who knows, I might hit a home run every 20 investments — time will tell — Yum! Yum!).
Angel Syndicates Two Years In
For background, angel syndicates are a new phenomenon here in Silicon Valley, with SeedInvest, FundersClub and AngelList being the most notable platforms in the space.
A syndicate is a group of well-heeled investors (more on this later) acting as one corporate entity, commonly referred to as an SPV (special purpose vehicle), in order to invest their money into a startup. Typically, we’ll have 50 to 99 investors (the legal limit in an LLC structure) who have put in between $1,000 to $50,000 each.
We did one of the first, back on March 11, 2014, for a company called Calm.com, for which we raised $328k. They’ve done exceptionally well since then, and I’m optimistic we will return a multiple on our cash back to investors on this company, in which few people wanted to invest at the time (back then mindful meditation and paid Apps weren’t as proven; today the company is doing millions in revenue).
Calm.com is not a done deal, but I love that we did that deal when folks speculated we shouldn’t have.
That’s what I do for a living: really, really risky investments. That’s why I call our syndicate the “trench run syndicate,” after Luke Skywalker’s — spoiler alert — risky attack on the Death Star.
We are currently running our syndicate on AngelList (angel.co/jason) and we’ve done 45 syndicates to date, for a total of $12.2m, with many of them being oversubscribed (as in, people who wanted to invest were not able to because we filled our “allocation” which is given to us by the founder of the company).
There are 954 members of my syndicate, representing $3.9m per deal. Since only 99 people can invest in each SPV, we typically invest $200-300k per deal.
Included in the 45 deals are folks like: Calm.com ($328k), Brilliant ($258k & $207k), OneDrop ($408k & $489k), Butterfleye ($748k & $168k), Signpost ($499k), Wrapify ($309k & $134k) and Cafe X ($416k).
Continue reading Starting today “civilians” can be angel investors — should they?