Foundry Group is a VC fund focused on early-stage IT, internet and software startups. The firm has just announced the formation of FG Angels, an AngelList Syndicate that aims to funnel $2.5 million in funding into 50 companies between now and the end of 2014.
The announcement was recently made on the Foundry Group’s blog.
We recently reported on AngelList Syndicates, a feature that allows angel investors to bring other angels along with them in early-stage investments. FG Angels will pledge $2.5 million of their own funds in the initiative, which plans on providing seed-stage funding for 50 companies.
Syndicates allow other angels to follow-on when an investment is made, and each of the 50 deals will be capped at $500,000. This represents up to $25 million in funding for these 50 companies. The balance of the funds will be generated from follow-on funders in the syndicated deals, and FG Angels will charge a 15% carry.
We will make these seed investments using the same strategy that we’ve made in the past as angel investors. The money will be coming from Foundry Group and all of the economics associated with the investment, including any carry on our FG Angels syndicate, will go to our fund. For these seed investments we will focus on people over ideas (the idea is the price of admission), will decide quickly, and will run in a pack with other angels as we don’t have to be the lead investor. We will be acting like angel investors in these investments – it’ll be unlikely that we’ll follow on in later rounds, unless the company specifically fits in one of our Foundry Group themes, and we won’t be taking board seats in these companies.
Syndicates like the FG Angels only serve to add to the power of AngelList’s new, socially-driven approach to angel investment. It provides a huge opportunity for the companies that list deals on AngelList.