In an earlier post, I wrote about how AngelList’s goal of making startup investments accessible to everyone has led to the creation of syndicates which let new investors co-invest with angel investors with a strong track record. The new investors pay the angel investors leading the syndicates a share of their profits in exchange for the selection and access services offered by the syndicate lead.
In the earlier post, I explained why syndicates would grow stronger over time and how some syndicates would gain the power to transition away from deal-by-deal fundraising to launch their own funds of dedicated capital (just like VC funds). In other words, AngelList would support the creation of new VC funds, thereby contributing to the very system it was looking to displace.
Syndicates are certainly growing stronger. I logged into AngelList this morning and all 5 of the investments that have raised the most money in the last 7 days are syndicates.
Another data point supporting the growing strength of syndicates is that all of the transactions from people I follow on AngelList that have taken place over the last 13 hours are also investments in syndicates. There aren’t any examples of direct investments in startups.
As for the second outcome of syndicate leads starting to raise funds of dedicated capital, this is also starting to take place. So far, we’ve been on the receiving end of two such offers by syndicate leads.