Brad Feld, co-founder of VC firm Foundry Group, has taken to his personal blog to talk about his experience in running a syndicate on AngelList. Feld announced earlier this week that they were ending their FG Angels Syndicate experiment.
AngelList launched their syndicate option in 2013 creating an ecosystem that is similar to a VC fund. Syndicate leads receive a carry, similar to VCs, but minus the management fee. For investors in the syndicate, you get to benefit from the expertise and engagement of the lead investor. This approach has been called the “killer app” of crowdfunding.
For Feld and his team at Foundry – they initially set pretty steep objectives. Their plan was to invest in 50 companies during the year using an angel strategy that has been effective for Feld over the years. The strategy continued through 2015 with a total number of investments with FG Angels hitting 59 (a bit short of the target).
- A greater understanding of how AngelList, syndicates and online investing works
- The opportunity to invest outside their wheelhouse “themes”
- An expansion of their network of entrepreneurs
- Generate additional returns. This will take a bit more time to “mature”, as early stage is not a game of quick money
And why are they moving on? It is a question of time vs. effort. Early stage companies take a lot of effort from an engaged investor. While Feld stated they may make occasional investments from FG Angels their attention is better served with the Foundry Group portfolio companies. Feld remains a huge fan of AngelList and believes in the Syndicate concept. As for AngelList they continue to iterate and move forward as a leader in the internet finance space. The post by Feld is worth a read. Be certain to read the comments at the end of the missive.