In collaboration with Masterworks...
One of my favorite investing apps.
Masterworks is one of my favorite investment apps. The company securitizes some of the world’s most beautiful paintings and lets you invest in them. You get access to multi-million dollar works of art that may appreciate in time. As the company has grown, I’ve continued to invest.
First one painting. Then two. Then three. Before I knew it, I had five beautiful pieces in my portfolio. (With more to come 😊)
Here’s why I invest with Masterworks:
- They’ve built a solid track record: Since 2017, Masterworks has offered over 100 paintings and sold 3, each realizing a net annualized gain above 30%.
- They offer exclusive products: Masterworks launched a first-of-its-kind “collection product” that lets you invest in a diversified pool of paintings.
- You get interim liquidity: Masterworks has a secondary market where you can buy and sell shares of their offerings.
Want to join me? Say I referred you or click here to skip their waitlist*
If you only have a couple of minutes to spare, here's what investors, operators, and founders should know about AngelList.
- Defining "AngelList" is tricky. AngelList isn't just one company. Technically, three separate entities leverage the brand: AngelList Venture, AngelList Talent, and AngelList India. That's without mentioning businesses that spun out from the company, including Republic and CoinList. Or, indeed, Product Hunt, which AngelList owned between 2016 and 2020.
- AngelList Venture is an efficient unicorn. According to an exclusive shared by AngelList's Venture team, the company is now worth $4.1 billion, thanks to a recent $100 million funding round. Its targeted spending means it has achieved that outcome with relatively little capital.
- Spinning out aligns incentives. Companies like Republic exemplify a crucial component of AngelList's playbook: some innovations are best served by going solo. AngelList founder Naval Ravikant believes it produces more effective teams, largely thanks to better alignment of incentives.
- Hiring founders increases leverage. AngelList hires an unusual number of former entrepreneurs, especially those with an engineering background. The company looks to build around individuals who understand how to leverage their labor and can take a product from zero to one.
- AngelList's most important products are just getting started. Ask Naval Ravikant what products he believes are most important to AngelList's future, and he'll point to Rolling Funds and software suite, Stack. Both have been around for less than two years.
At the beginning of our conversation, I asked Naval Ravikant a simple question: What is AngelList?
Implicit in that inquiry were others: Is it a recruiting platform? A capital management service? A fundraising tool? If you were to describe AngelList to someone that had never heard of the company, how would you account for its complexity?
Ravikant responded with classic concision. "We innovate on the infrastructure of innovation," he said.
It is a neat appraisal and an interesting one, not least, linguistically. Usually, companies inhabit the domain of nouns. Uber is a ride-hailing service. Twitter is a social network. Google is a search engine. We can describe these businesses in other terms, and massive marketing campaigns exist to embroider these definitions. But if your aim is clarity, the noun works best; X is.
It is telling that to Ravikant, AngelList is a verb, a collective doing. Over months of researching the company, I have come to feel that this choice reveals something poignant. AngelList is more a methodology than a business – a way of building and experimenting that manifests commercial enterprises. In the course of its life, it has produced dozens of different products. Today, at least six major entities can be considered partial outputs of this approach: AngelList Venture, AngelList Talent, AngelList India, Republic, CoinList, and Product Hunt. At least two of those have almost certainly reached unicorn status with AngelList Venture’s new round valuing the business at $4.1 billion.
Ravikant's description implies something else about AngelList: there is no center. To rely on the verb is to elide the vacancy. That is not a criticism but an observation. The reason we can condense a behemoth as multivariate as Google into a three-word description – "a search engine" – is because we intuit a focal point. AngelList doesn't work this way. While we might suggest that the company's Talent and Venture arms seem to shine most brightly, it's not obvious why we would think so.
If we are to push AngelList into the world of nouns – after all, "nouns name the world," the poet Anne Carson wrote – we might think of it as venture capital's constellation. Each star shines alone, but with a squint and a bit of imagination, we can find a shape to them.
Today's piece is an attempt to outline this figure and apprehend what may be one of the world's most intriguing, influential, and impactful businesses. In doing so, we'll delve into the following:
- Starting as a newsletter. AngelList emerged from a newsletter called Venture Hacks. It took three years for the founding team to find a winning formula.
- Evolving into a multi-faceted behemoth. Over its twelve-year history, AngelList has matured into a broad offering spanning private market investing, fund administration, startup tooling, and beyond.
- The benefits of spinning out. If you want to go fast, you must go alone. AngelList seems to believe that adage, given it has spun out several businesses in pursuit of maximum efficiency.
- A culture of leverage. AngelList has created massive value with little funding. In part, that's because the company spends as little as possible on sales and marketing, focusing on more leveraged investments.
- The value of AngelList's ecosystem. Depending on how you parse it, AngelList has co-founded two unicorns and played a vital role in three further businesses worth hundreds of millions of dollars.
- What the future may bring. No one could have predicted the path AngelList has taken to its current state. The future is likely to bring further experimentation. Building products for the crypto ecosystem seems like a good place to start.
AngelList's origins can be traced back to one of the dot-com era's buzziest startups, Epinions. It's a tale of fast growth, bright minds, and corporate intrigue. Though AngelList is a singular business, the energy and experimental spirit that animates it predates its inception.
It was the people that struck Kevin Laws. Three years out of business school, the MIT graduate had built a career at consulting shop Booz, Allen & Hamilton. Based in the firm's San Francisco office, Laws enjoyed being staffed to technology projects and might have stayed there had one of his former colleagues not left for a new startup: Epinions.
Founded in 1999, the e-commerce review site boasted an $8 million Series A, led by some of Silicon Valley's most prestigious investors, Benchmark and August Capital. That sum was a reflection of the idea's potential, certainly, but also of the team's caliber. Though much of their success would arrive later, Epinions' founders proved an all-star cast.
The initial team included Nirav Tolia, the future founder and CEO of Nextdoor, Ramanathan Guha, a major contributor to Netscape and the creator of web standards like RSS, Mike Spieser, the legendary steward of Sutter Hill Ventures, and a young operator named Naval Ravikant.
Laws' former colleague kept pestering him to visit the Epinions office. There was something special about this group, he told Laws. You had to see it to understand.
By coincidence, Laws was stationed at a client's office across the street from the startup. After working late one night, he called his friend to see if he could stop by, expecting the team to have departed already. Instead, he was told to head on over.
He walked into an office filled with conversation. And not just mindless chatter or perfunctory dialogue – indeed, it seemed closer to a symposium, freewheeling but intellectual. Austrian economic theory passed into Keynesianism, which bled into a disquisition on art and design. Laws was struck by the sense that this was an unusual group of people. "They were really smart," he noted in our conversation, "in a kind of Renaissance-type way." That broad curiosity was allied with a good-spiritedness which Laws suggested stemmed from one founder in particular: Naval Ravikant.
While the content of the conversation stayed with Laws, so did its context. Not only was the Epinions team talking about big ideas, they were doing so late into a work night. This wasn't the kind of behavior he'd come to expect in the consulting world, nor did it seem the norm at other startups of which he was aware.
Laws left Epinions at 1:00 AM. Shortly after, he migrated across the street permanently, joining as the startup's VP of Product Management.
What followed was a testament to the promise and perils of running a high-growth, venture-backed startup. Epinions found explosive product-market fit with online buyers grateful for a destination that compiled trustworthy user reviews. As Eric Jorgenson, author of The Almanack of Naval Ravikant and one of AngelList's finest unofficial historians explained, Epinions "blazed the trail for latter-day companies such as Yelp and Quora" with its user-generated functionality. An innovative model added fuel to the fire, with Epinions giving users a portion of its advertising revenue. Nearly 6 million users had flocked to the platform by 2003, with 1 million reviews written. Such rapid growth had convinced investors to pour a further $37 million into the business.
Despite its traffic, Epinions struggled to monetize. A contemporary article described the company's revenue as a "small fraction" of eventual acquirer Dealtime's $30 million. Tolia, then CEO, noted that the company had a "little problem…We needed a viable business model." Indeed, only Tolia remained of the existing founding team by that time. Ravikant had left in 2000, and Speiser departed in 2001, with Laws leaving the same year.
Affected by the comedown of the dot-com crash, Epinions agreed to join Dealtime as part of an all-stock arrangement. The purchase valued the company at $30 million, less than the $45 million the company had raised, meaning that the common stock held by Epinions's former founders came to nothing. Only Tolia received a share in the newly combined business, Shopping.com, as did investors.
The tension this arrangement created came to a head in 2004. Shopping.com enjoyed an impressive IPO that saw the firm end its first week of trading at a $750 million valuation. Tolia's stake was valued at $20 million, while Benchmark and August Capital held $60 million positions.
Ravikant, Spieser, Guha, and a group of former Epinions employees sued, alleging they were misled about the value of the business they had created. Bill Gurley of Benchmark, John Johnston of August Capital, and Nirav Tolia were named in the suit. It was an audacious move. Silicon Valley runs on personal relationships – openly criticizing a former backer could have resulted in the plaintiffs being blackballed from future investments. An article written after the fact memorably suggested that the move briefly turned Naval Ravikant's name into "radioactive mud."
In the summer of 2005, eBay acquired Shopping.com for $634 million. Not long after, fifty-one former employees – including the former founders mentioned – agreed to settle the lawsuit in exchange for compensation.
Though it ended in acrimony, the Epinions journey would prove portentous. For one thing, the company seemed to share the same intellectual, experimental DNA with Ravikant's later creations. Perhaps more importantly, the tumultuous journey demonstrated the hazards of the venture capital industry and the need for a more open, transparent alternative.
Naval and Nivi
Between Epinions and his next big act, Ravikant dabbled in other entrepreneurial and investing activities. He served as a venture partner at August Capital after he departed Epinions in 2000 (presumably making the lawsuit extremely awkward). During this period, he contemplated different business ideas and shared his thoughts on entrepreneurship and venture capital via his blog, Startup Boy.
Among his readers was a young founder called Babak Nivi. Working on a startup of his own, Nivi was relatively new to Silicon Valley – though he'd done an impressive job of networking his way into a valuable circle of friends. After meeting Michael Arrington at a conference, he persuaded the TechCrunch founder to let him stay at his house. "I didn't have any money," Nivi told me. "I was effectively sleeping on his couch."
While sitting at Arrington's dining room table one day, a visitor arrived:
One day, Naval came in and I was sitting at the dining room table eating my lunch or something. I'm like, 'Oh, this is great. This is Naval. I've been reading his blog.' And Naval ends up pitching Mike basically the same exact startup that Mike himself is working on.
The business Ravikant pitched was Vast.com, a verticalized search platform. Vast would go on to have an interesting journey of its own, becoming the holding company for CarStory, a tool leveraging artificial intelligence to analyze used cars. In 2016, the business raised a $14 million round; four years later, it sold to Vroom for $120 million.
About a week after being a fly on the wall for Ravikant and Arrington's "awkward" encounter, Nivi ran into Ravikant again. Nivi's friend Jared Kopf – an entrepreneur that would go on to found AdRoll – invited him to a party hosted by Ravikant himself. Nivi took advantage of the opportunity, asking Ravikant for his advice on a pressing issue: the startup he was working for, Songbird, was in the middle of a fundraise, fielding interest from both Benchmark and Sequoia. What should the team do?
"Naval gave me a huge brain dump on raising venture capital," Nivi remembered. "He introduced me to a great lawyer as well…at the party."
The meeting made such an impression on Nivi that shortly after he left, he decided to find a way to share Ravikant's thoughts with a broader audience, even if it meant a career change. "Once we're done raising money for this company, I'm going to leave," Nivi told himself, "I'm just going to write down all this stuff that Naval was teaching me…because I thought it would be a disservice to humanity, not to try and document this."
Though neither man could have known it at the time, an enduring partnership was about to commence.
Nivi came good on the promise he made to himself. Via a blog called "Venture Hacks," he shared Ravikant's brilliance with a broader audience. As Nivi tells it, the two fell into an easy collaboration. Nivi would ask questions over email or in their in-person meetings, transcribing and distilling Naval's answers into a post. Before publishing, he'd send it back to Naval for review. The setup suited their personalities. "I want to have a lot of control and deal with the details," Nivi said, "And Naval wants to be high level and just work with good people and point them in the right direction." Venture Hacks quickly attracted an audience, becoming a reference point for new founders trying to understand how to raise money.
Though Ravikant was happy to share what he'd learned, his focus was elsewhere. The same year that Venture Hacks launched, Ravikant founded Hit Forge. Though it began as an incubator, Ravikant quickly pivoted to a more traditional fund model after recognizing he faced adverse selection. A few visits to Y Combinator's Demo Days, where Paul Graham apparently viewed him as a pseudo-competitor, may have also hastened the maneuver. A contemporaneous Hacker News comment from Ravikant outlines Hit Forge's refreshed strategy.
So I'm the guy behind Hit Forge…
We're a straight early stage seed-investment fund. We invest in social-media early-stage web startups, putting in between $100-$500k. We maintain specialist resources to help with SEO and Viral Marketing. We provide free office space to our companies, if they want them. We have a one-page no-hassle termsheet, where we buy something that looks a lot like common stock. We don't try to control the company. We help with future fundraising (see my blog at http://www.venturehacks.com). And we decide very quickly.
Again, the seeds of AngelList can be seen in vignettes like this one. Though Ravikant had yet to productize his solution, it was clear he understood the problem – entrepreneurs needed advice and support, delivered simply. It proved a winning formula over the coming years, with Ravikant acting as a proto-solo capitalist, securing access in Twitter, Uber, Notion, Wish, and Postmates.
As Ravikant refined Hit Forge, Nivi experimented – with one of Ravikant's ideas as inspiration. A few months after he'd started writing Venture Hacks, Ravikant had lit up with a new company concept. "We've got to figure out how to make a stock market for [venture] investors," Nivi remembered Ravikant telling him, adding, "And I know how to do it."
It turned out to be a thornier challenge than Ravikant's conviction may have suggested. Nivi recalled that period, saying:
We tried at least three times from 2007 till 2010. We tried doing something on Yammer, we tried a Google group. We tried writing custom software.
As a bit of trivia, the project wasn't called AngelList in those days. Nivi and Ravikant burned through several names, including "The # Deal Network." None of the products took off.
Losing steam, Nivi met Ravikant for a coffee one Friday with the expectation of ending the experiment. Venture Hacks had turned into a revenue-generating business through advertisements and Nivi's sale of affiliated ebooks. That was where he saw his future. "I think I told him, 'You know, I'm not going to do this…anymore. It's not working. I'm just going to try and sell some PDFs.'"
Ravikant understood. But in the car ride after their coffee, Ravikant came up with an idea. It sounded rather simple, with Nivi recalling Ravikant saying:
Let's just make a list of investors and how much they want to invest, where they are, location, dollar amounts, markets that they're interested in, a picture of them, their name, their firm, etc. And let's just send that out.
It was worth a shot, Nivi thought. The next day, he sent a Wufoo form out to a few prominent angel investors, asking if they were open to being featured in front of entrepreneurs. He was surprised to learn that many were enthusiastic about the idea, keen to increase their deal flow. Three days later, on February 2, 2010, Venture Hacks published a piece, and a new business stepped into the light.
"I'm psyched to announce AngelList," Nivi's blog post began. The new product did what its name suggested, compiling a list of some of the world's best angel investors. The inaugural group included familiar names like Jeff Clavier and Brad Feld. In total, the fifty or so investors on the platform represented "$80M that will be invested in early-stage startups this year," Nivi wrote – a sign of venture capital's nascency.
To access this cohort, founders were encouraged to send 150-word elevator pitches, but only after they'd built an MVP and gotten a sense of their customer base. "Don't send them nonsense," Nivi noted. If you wanted to be listed as an angel investor, you had to have made two $25,000 investments in 2009, with plans to do the same in 2010.
Though its traction might not have been meteoric, AngelList demonstrated its value. The platform handled fifty investments within its first seven months of operation, facilitating many more introductions and new relationships. A few months after AngelList's launch, Kevin Laws joined as COO, reuniting with the newly focused Ravikant. Both would play vital roles in the years that followed.
With the benefit of hindsight, it's remarkable to think of what arose from this humble beginning. From a blog, a survey, and a web page, AngelList has grown into one of tech's most influential platforms and a constellation of businesses that seem to have their best days ahead. It has upended the venture capital ecosystem several times over and has done so with admirable efficiency. To understand how such an outcome is possible, we need to look closely at what AngelList has become.
AngelList is not a monolith. Depending on how you look at it, you might see six entities or, indeed, a dozen. To understand how that has come to pass, we must chart the parent's evolution.
Experiments in social media and beyond
"The initial vision was let's help companies get funded," Ravikant said in our discussion. Though AngelList might have demonstrated its potential in 2010, it took time for the team to truly fulfill that deceptively tricky mission. After establishing itself as a newsletter and web page, AngelList grew into a verticalized social network. Entrepreneurs could review investor profiles that featured "representative investments," criteria, and key connections.
By early 2011, AngelList had added a feed to that matching capability, showing what topics and profiles investors and founders were following and what kind of introductions had been made. The company tinkered with different ways to surface this information in the years that followed, even if by Kevin Laws' account, they had "no clue" how they might be able to monetize mindshare.
The next year brought a flurry of activity and experimentation. Throughout 2012, AngelList experimented with a tool to create standardized pitch decks, a platform for accelerators to manage applications, standardized legal documentation for fundraises (AngelList Docs), a recruiting portal (AngelList Talent), and a way for accredited investors to participate in startup financing (AngelList Invest).
Not all of these tests worked. When I asked Ravikant about some of AngelList's mistakes, he responded, "Oh, we have so many of them…I would argue that it has just been a large set of failures along the way." Still, some landed.
Today, one of AngelList's obvious strengths is its ability to absorb complex legal operations – a strength that can be traced back to AngelList Docs. Perhaps even more importantly, AngelList Talent and AngelList Invest would develop into major pillars.
As with AngelList itself, Talent began as a mailing list that sent impressive operators to venture capitalists. The idea was investors would be positioned to direct this talent toward portfolio companies. "They were ecstatic," Ravikant told me before adding, "That's when we discovered they were incredibly lazy. They wouldn't even forward the email." Once again, a platform was created to facilitate better matching.
The JOBS Act and Syndicates
AngelList Invest represented the company's first foray into handling investment on the platform. Accredited backers could deploy as little as $1,000 into buzzy startups – a meaningful shift in the status quo.
This improvement, along with others, contributed to dizzying growth. By the end of 2012, AngelList reportedly hosted 100,000 companies and 5,000 accredited investors. Future growth would depend on more than just product innovation, though. Beginning that year, AngelList had started lobbying for the passage of the JOBS Act, with Ravikant and Laws spearheading the effort.
Their first big break came with the passage of Title II in 2013, which allowed startups to openly advertise funding rounds as long as they took "reasonable steps" to ensure investors were accredited. This shift massively benefitted AngelList, allowing the company to serve as the home for open fundraising activity, especially as it took care of accreditation checks. AngelList would capitalize further by adding new products to its offering.
On the first day the SEC permitted "general solicitation," AngelList launched twelve syndicates, with Tim Ferriss and Naval Ravikant among the organizers. As many will know, this structure allowed investors to negotiate an allocation into a startup, then accept co-investors to join them. Ravikant noted that syndicates were one of the first additions that showed "some product-market fit." That may be underselling it. In Nivi's recollection, the launch of syndicates "felt like a punch in the face to the company," a sharp jolt to the system, buoyed by the fact that for the three days after launching, it felt like the world was "tweeting about this every five minutes."
At the same time that AngelList opened up this functionality, it announced a raise of its own: $24 million from Atlas and Google Ventures at a mooted valuation of $150 million.
Apart from a small $2.1 million top-up, AngelList hasn’t announced further funding until today. Ravikant noted that the company had raised in the intervening period, however, pulling in a total of $86 million prior to this round.
Bootstrapping capital supply
The company's Talent and Venture practices continued to grow over the next two years. AngelList began spinning up venture vehicles of its own to bolster its investing work. In 2014, the company launched Maiden Lane, a $25 million vehicle designed to invest in syndicates on the platform, along with prominent angels. Maiden Lane represented the beginning of a repeated tactic: increasing the value of the AngelList platform by bootstrapping capital supply.
Another version of this approach arrived in 2015 when AngelList partnered with CSC Venture Capital. The Chinese fund committed to invest $400 million in early-stage deals on the platform, a sum The Wall Street Journal referred to as "the largest single pool of funds devoted to early-stage startups–ever."
In 2016, AngelList's team created SAX Capital, a registered investment advisor. To begin with, SAX seems to have been used to purchase secondary shares on the platform – giving employees and founders of startups a way to realize the value of their equity. As AngelList eventually became home to full-featured venture funds – rather than just syndicates – SAX seems to have taken on another role. Based on AngelList's documentation, it looks like SAX serves as an "advisor" to vehicles that wish to focus on "non-qualifying" investments. In that respect, it may enable firms to invest in other funds or buy secondary shares, cryptocurrencies, or debt instruments.
That's been leveraged to good effect in recent years. Jumping ahead for a moment, AngelList launched its "Access Fund" in 2020, which backs investors on the platform. It's effectively a fund of funds, allowing users to create a startup index with a single check. This product is possible thanks to SAX Capital.
Bulking up, spinning out
Starting in 2016, AngelList began to push the boundaries of its structure, adding new components and spinning out its most promising experiments.
Once again, regulatory change partially catalyzed its expansion. In the spring of 2016, Title III of the JOBS Act went into effect, legalizing crowdfunding from non-accredited investors up to $1 million. No other company was perhaps as well-positioned to respond to the shift. Not only had AngelList actively contributed to the legislation's passage, but the company had developed the understanding and infrastructure to make a move.
In July, Republic opened its doors. There seems to be some disagreement about how, exactly, the crowdfunding platform came to fruition. Before founding Republic, Kendrick Nguyen worked as an attorney at AngelList. In our conversation, Nguyen noted that he started independently after recognizing the limitations of his former employer. "I knew that AngelList would not be able to do it with current infrastructure," he said. By his estimation, a business like Republic required a much more robust legal and business team than AngelList's engineering-focused staff.
Other sources suggested it arose more directly from AngelList, a view Ravikant confirmed. As proof of that, he mentioned that AngelList initially owned "like 70%" of Republic before a subsequent recapitalization. Whatever its precise origins, Republic relied on the support of AngelList, both in terms of capital and expertise. After initial struggles, the company has flourished, attracting $214 million in venture financing. Ravikant agrees that its success reflects the company's founder rather than its progenitor. "That's not an AngelList company," he said, "that's a Kendrick company."
A few months later, AngelList added a newcomer to its constellation, purchasing Product Hunt for $20 million. As Ryan Hoover mentioned in our discussion, the sale was motivated by a respect for AngelList and an appreciation for the hands-off approach Ravikant planned to take. Speaking of AngelList's then-CEO, Hoover said, "I think he just really understood the community aspect of what we were building."
Though initially, Ravikant and Hoover felt there might be synergies between their two businesses, it became clear that binding them too tightly might cause issues. "There's also a strong belief that we don't fuck each other up," Hoover said, describing the way both parties viewed the relationship. AngelList experimented with more closely tying in its Talent arm to Product Hunt, but it didn't seem to have much effect. Ultimately, Ravikant felt that when it came to synergies, "There weren't that many short of breaking it." That recognition culminated in Product Hunt spinning back out in late 2020.
Before that happened, however, two other entities would emerge. As crypto came to the fore in 2017 amid a wave of initial coin offerings (ICOs), AngelList was approached by Protocol Labs to pursue a joint venture. "To be honest, the whole thing was their idea," said Ravikant. Protocol Labs proposed creating a version of AngelList focused on the crypto space. Rather than investing in traditional startups, users would purchase tokens before they were listed on exchanges like Coinbase or Binance.
Ravikant felt the idea had promise, committing his team and software to the initiative – the new company, CoinList, also riffed on AngelList's brand. The project kicked off with Protocol Lab's own project, Filecoin. The decentralized storage network ICO'd in August 2017. Anyone lucky enough to have participated in that inauguration benefited from a jaw-dropping appreciation of more than 2,100%.
According to Nguyen, he initially helmed CoinList while simultaneously running Republic. In time, leadership passed to ex-AngelList employees Brian Tubergen and Graham Jenkin. CoinList has raised $119 million in outside capital.
AngelList's final consequential spin-off saw the light of day the following year. For years, customers had requested a version of the product for the Indian market. “It was a non-stop drumbeat,” Ravikant said. A previous experiment had made the company cautious of such an excursion. In 2014, AngelList had launched "AngelList Europe," an ambitious bet that failed to pay off. The regulatory, linguistic, and cultural heterogeneity of Europe made it difficult to design a consolidated, coherent system and curbed the company's most useful features. While users could network and connect via AngelList, spinning up syndicates and other investment products remained complicated.
If not for the entrepreneurial efforts of Utsav Somani, it is unlikely AngelList's Indian business would exist. The angel investor reached out to Ravikant in 2016 after hearing his discussion on Tim Ferriss' podcast. The two struck up a friendship and started discussing a potential play in India. Over the next year and a half, Somani worked with local regulators to clear the pathway for AngelList India. In 2018 it made its debut; the sub-company has continued to grow in the years since, leveraging AngelList's software.
For much of its life, AngelList has seemed a productively unstable entity. When exposed to new elements, it reacted, morphing, splitting, changing. In the last four years, the solution seems to have settled. Though the company has not lost its entrepreneurial streak, recent innovation sits neatly under existing properties.
In part, that seems to have been motivated by a leadership change. In 2017, Naval Ravikant stepped back from his position as CEO, handing over the reins to then-COO Kevin Laws. It represented a bold move – while AngelList was a household name in Silicon Valley, the business had yet to truly grow into itself. When I asked Ravikant why he had stepped back, he reflected on the journey he had been on, talking about where he had started – with a simple mailing list – and the toll the trip had taken. "I was just tired. I was exhausted. I'm a thinker and an investor," he said. The day-to-day requirements of the CEO role had taken him outside his zone of genius, forcing him to play manager, cheerleader, and therapist. "I was holding the company back," he told me. "I personally was no longer creative."
Ravikant's self-awareness was to AngelList's benefit. Laws ably steered the ship while Ravikant spent some of his newfound time recruiting a leader for AngelList's Venture arm: Avlok Kohli. Over "many, many jam sessions," AngelList's leadership convinced Kohli of the opportunity. "It was clear that there was something very unique that could be built," Kohli noted. It was an inspired selection. A twice-exited founder, Kohli reinvigorated the business. "He has led this pivot and it's not…a product pivot," Nivi said. "It's a pivot of intensity, speed, effectiveness. It's a re-flourishing of the company."
Freed from hands-on management, Ravikant returned to what he does best: dreaming up new ideas. CoinList was partially the product of this free-time, says Ravikant. So too was the idea to build a secondary marketplace, though that didn't go anywhere. In the shower one morning in 2019, Ravikant cooked up one of his most impactful creations: Rolling Funds. (As an aside: Ravikant said he also came up with the idea for Syndicates in the shower, which begs the question – why does anyone let him come out?)
In February 2020, the disruptive new venture capital model debuted and quickly caught fire. Rolling Funds have since established themselves as one of AngelList's defining products. A year later, another step-change feature was released with Roll Up Vehicles (RUVs) launching. This structure allows founders to easily consolidate up to 250 angel checks in a single entity.
AngelList Talent has introduced its own initiatives with a focus on remote-friendly tooling. This year, the division rolled out "REMOTE by AngelList Talent," a suite of features designed for hiring worldwide.
In addition to reaping the rewards of a refreshed leadership team, AngelList seems to be benefitting from a sharper focus. Spinning out Product Hunt in 2020 allowed AngelList to stop fretting about potential synergies and gave new owners a chance to grow its value. Republic, CoinList, and AngelList India have matured to a stage where AngelList can operate like any other investor, freeing up further bandwidth. Taken together, AngelList looks to have entered a phase of maturation as early winners compound their advantage, more recent bets prosper on their terms, and an energized team leads the way forward.
Learn how the most successful businesses and teams operate. Join 55,000 others to receive powerful business analysis every Sunday.
It is time to make sense of the complexity, the involution we've just discussed. While AngelList has shifted and split throughout its history, today, its constellation is composed of six primary entities:
- AngelList Venture
- AngelList Talent
- AngelList India
- Product Hunt
Like all constellations, what should and shouldn't be included is subjective. Does it make sense to loop in entities that don't share AngelList's brand? What about those in which AngelList – or its initial investors – hold no more than a minority stake?
The shape I have chosen to draw focuses on those businesses that trace their origins – or a meaningful part of their lives – back to AngelList. These entities either sprung directly from the parent company or were brought into the fold in Product Hunt's case. As we'll discover, each has a subtly different structure and relationship to Ravikant's company.
Let's dig into each one.
If the name "AngelList" comes up in conversation, there's a good chance the speaker is referring to AngelList Venture. In the constellation of companies, this entity shines most brightly. Not only did it come first, with roots easily traced to the Venture Hacks mailing list, it is also the company's most prized entity. In an exclusive update, CEO Avlok Kohli shared that the business just raised $100 million at a $4.1 billion valuation.
AngelList Venture focuses its offering on three stakeholders:
- Fund managers
A comprehensive suite serves each constituency.
Fund managers have always been at the heart of the AngelList platform. As Sumukh Sridhara, a GM, said of the company's work, "We help founders by helping VCs give them capital." Three products are designed for managers: Venture Funds, Syndicates, and Rolling Funds.
The Venture Fund product, which launched in 2017, does what you would expect it to – allowing new managers to spin up and run venture capital vehicles. AngelList Venture's software makes it simple to receive capital from LPs, make investments, track positions, and manage fund administration. The depth of the offering is extremely impressive, covering tax and fund administration, accounting, and investor communications. So far, more than 380 funds have been created on the platform, with $2.5 billion in assets under management.
A 2020 report from the National Venture Capital Association (NVCA) estimated there were roughly 3,680 active funds in the United States managing $548 billion. If AngelList's figures are up to date and refer to active funds, this would suggest a solid grip on the domestic VC space, with the firm administering 10% of funds. "That's not surprising to me," Sridhara noted, suggesting it was probably an "undercount." The fact that AngelList manages just 0.45% of AUM through this product indicates that AngelList Venture has mostly succeeded with smaller investment firms.
AngelList Venture monetizes this product through a mix of SaaS fees and carried interest, charging 1% of a fund's size in fees, capped at $25,000 per year, and 5% carry on LPs the platform delivers. Assuming all 380 funds pay $25,000 per year, AngelList would earn $9.5 million through this business line. (Presumably, the figure is a bit lower. Though the average AUM per vehicle comes out to $6.5 million, there's undoubtedly a skewed distribution.) It's hard to know exactly how much the 5% of carry on AngelList LPs is worth to the business, though it's a clever way of capturing the upside.
More than $1.2 billion has been invested into AngelList Syndicates. As mentioned earlier, Ravikant considered Syndicates to be the company's first hit product, and it continues to be a popular offering. It leverages a similar monetization structure with a mix of fees and carry. It costs $8,000 to start a syndicate with AngelList taking the same 5% carry for LPs it delivers – potentially a more significant figure given the company reports 61% of syndicate funds come from AngelList LPs.
Rolling Funds is a more recent addition. As we'll discuss later, Naval Ravikant sees it as one of two features that will define the company's future. The vehicle allows fund managers to fundraise "publicly and continuously," a radical departure from traditional norms in which a GP might open up allocation once every three years or so. That's because a rolling fund is really a series of quarterly vehicles rather than one monolithic structure. In essence, a new vehicle is raised four times per year with LPs' commitment auto-renewing.
To Ravikant, the changes unlocked by Rolling Funds "cannot be understated." Managers can accept new money on the back of a productive coffee meeting, sending over a URL to would-be LP. Similarly, an investor that sees a manager back a company can deploy capital based on a track-record unfolding in real-time. It is, in essence, a venture fund that acts like a software subscription.
AngelList monetizes Rolling Funds through the same carry structure and a 0.15% fee on annual committed capital. Intriguingly, AngelList doesn't seem to put a cap on this administrative fee, meaning a GP might reach a point where a Rolling Fund is more expensive than a traditional one.
Though founders have always been key stakeholders for AngelList, the past couple of years have seen the business double-down on serving this group. Sumukh Sridhara explained why that was the case, saying, "The stakeholder that really matters at the end of the day is the founder…If founders don't like AngelList, that's a problem for our GPs." AngelList operates two core products to win founder affection: Roll Up Vehicles (RUVs) and Stack.
RUVs are so self-evidently useful you kind of can't believe they didn't exist before. Rather than managing allocations from hundreds of individual angels, founders can use this structure to bundle small checks into one entity. Managing hundreds of signatures and provisions is distilled down to a URL and a single line on the cap-table.
AngelList offers this service for free (except pass-through filing costs) unless a custom version is required. In that case, it charges $2,500. Such a generous fee structure reveals how the company courts founders, making it a no-brainer to use its services.
An interesting quirk of RUVs is that they exhibit some tension with AngelList's Syndicates product. After all, both are ways to agglomerate smaller checks into a single entity. The difference is that syndicates have a lead with an economic interest; they earn carry on the capital they collect. There is no such relationship with RUVs, meaning that the underlying investors get a better deal. Could this new addition eventually cannibalize AngelList's Syndicates business?
Sridhara doubts it. To his mind, the two products pull from different pools of capital. By definition, a syndicate has earned access to a specific deal and is managed somehow, whereas an RUV is founder-led. Moreover, both syndicates and funds can invest in an RUV.
It will be interesting to see how this plays out. Syndicate leads that do no better than offering access to deals available via RUV may see some of their capital bleed out, though it may take time for angel investors to familiarize themselves with the newer structure.
The second product Ravikant identified as a pillar of AngelList's future was Stack, calling it "the single most important thing we've done in a long time." Sridhara was kind enough to give me a demo of the product that bills itself as an all-in-one tool for venture-backed businesses. Stack combines entity formation, cap table management, banking, hiring, and fundraising tools in a single package. It is an impressive package with deceptive depth. As Sridhara explained, Stack looks like an agglomeration of existing tools at first glance — a version of Stripe Atlas, Mercury, and Carta rolled into one. In speaking about the product, Ravikant talked through this approach, asking, "Where do you unbundle to solve the pain point, and where do you rebundle?" The team clearly believes founders are served through Stack's rebundling.
What's interesting about the platform isn't just that it lumps products together but that it unlocks a more frictionless experience by doing so. For example, once incorporated on the platform, a company can start to collect capital from investors in a matter of clicks without needing to navigate elsewhere. With money in the bank, a business can advance a hiring offer to a desired candidate and show the options that individual would earn and what that would be worth. AngelList can draw on its data set to let a candidate experiment with different exit outcomes and how that might impact the value of their options, giving guidance when a user might be overly optimistic, for example. The result is a company OS that is in conversation with itself and the broader market.
As with RUVs, AngelList takes a very soft approach to monetization. Incorporation costs $500, with all other features available for free. Clients that use the banking product deliver revenue through transaction fees, and in time the company expects to charge for its cap table management. Though Stack is in its early days, it constitutes a major upgrade in AngelList's founder tooling and gives the company many avenues to expand.
The final constituency AngelList serves is investors themselves. This group plays an essential role, deploying capital into traditional venture funds, syndicates, and rolling funds. While managers and founders could still benefit from AngelList's tooling without access to on-platform capital, its presence increases the likelihood of successful transactions. More managers can raise a fund, allowing more startups to get financed. In addition to investing in these three vehicle types, investors can choose to back one of AngelList's native funds, the largest of which is the Access Fund.
This product is administered by SAX Capital, giving it the ability to invest in funds alongside syndicate offerings. In that respect, it operates as something like a venture fund and fund of funds hybrid, charging a 1% annual management fee. In total, the company estimates that it manages $1 billion in its "AngelList Capital Network," a group it defines as "LPs who discover syndicates and funds via AngelList." Many may do so via the Access Fund given its ease of use – with a single commitment, investors get an index of the venture capital ecosystem.
The Demo Day Funds (DDF) tweak this approach to offer an index on Y Combinator's ecosystem. With one investment, LPs get access to four funds led by a "YC alumnus or insider." Each is tasked with backing companies in the accelerator's latest batch. DDF appears to be a recent innovation and is certainly an intriguing one. Entire funds have risen to relative prominence by heavily deploying capital into Y Combinator. Yuri Milner of DST Global launched the Start Fund in 2011 in collaboration with SV Angel to this end. Younger firms like Liquid2 Ventures and Soma Capital have done something similar. If AngelList selects its leads well, DDF could prove an impactful investment product. Outside of these native funds, AngelList has co-created a suite of other venture vehicles. This began in 2014 with the launch of Maiden Lane, followed by the larger CSC Ventures collaboration.
In 2019, Ravikant teamed up with Jeff Fagnan of Accomplice to create Spearhead, a vehicle that gives $2 million or more to founders that want to start their own fund. To date, the project has backed 68 entrepreneurs. Notably, recipients of Spearhead don't have to invest in companies on the AngelList platform though they do use the company's underlying software.
Last year, AngelList launched the Early Stage Quant Fund with WorldQuant Ventures. The $25 million fund will use data gleaned from AngelList's platform to invest, picking companies that show strong investor demand and perhaps even hiring data.
Why does AngelList offer these products? What value does it get by spinning up internal and external vehicles?
The best way to answer that question is to walk through AngelList Venture's flywheel. The more companies on the AngelList platform, the more fundraises there are likely to be. The more fundraises that are available, the more investors will hop aboard. As more investors sign up, the platform's capital base grows. The larger the capital base is, the more attractive AngelList Venture is to companies looking to raise. This is a powerful virtuous cycle, and it's obvious how many of AngelList's products exist to accelerate its movement.
For example, while founders already come to AngelList for capital, RUVs and Stack provide further reasons to hop aboard. These act like power boosts, pushing the flywheel even faster.
The same can be said of the AngelList funds. By offering an Access Fund or bringing in investment via CSC, AngelList adds capital to the system, hastening the process. Spearhead is interesting because it arguably brings more founders to the platform – or at least deepens the relationship with them – and injects funding.
In sum, AngelList Venture is a complex business but not a convoluted one. Despite serving a triad of stakeholders with an extremely deep feature set, it remains a legible, rational machine with a clear point of view.
You might not realize it, but the moment you move from angellist.com to angel.co, you migrate from one company to another, moving from AngelList Venture to AngelList Talent. Though the two companies leverage the same brand, they are separate businesses with different leaders at the helm. While Avlok Kohli leads AngelList Venture, Amit Matani runs the Talent ship.
As noted earlier, Talent launched as a mailing list that morphed into a platform. According to Kevin Laws, "It was based on a particular insight that turned out to be wrong and it worked anyway." AngelList's initial thinking was that of the companies on the platform, only around 3-5% were raising money at any given moment. Moreover, only some of those that did so would prove successful. How could the business serve the other 95% and help those that struck out find their next challenge?
The team discovered that founders who had failed to raise didn't want a job. Many already had day jobs they were looking to escape from, while others simply moved on to their next best idea. Instead of Talent serving and engaging entrepreneurs already on the platform, they found the service attracted an entirely new swathe of users looking to break into tech. The team honed in on that insight, building tools for companies and job seekers.
The offering quickly took off. Rather than trying to monetize immediately, AngelList was patient with Talent, protecting its ability to maintain a startling growth rate. As Laws explained, the team knew it was valuable and would, one day, produce revenue – there was no need to rush it. Even in these fledgling days, Ravikant, Laws, and the team saw Talent as its own business. "We knew that these were going to become separate freestanding companies," Laws said.
While Talent initially served early-stage businesses, as its tooling matured, the companies it could serve did, too. Today, companies like Amazon and Stripe use the platform though Matani noted that the platform's sweet spot was growth-stage startups. Matani managed this evolution with impressive capital efficiency. According to him, AngelList staked the Talent team initially but has not formally bankrolled it for several years. Since the product began generating revenue through SaaS fees and placement bounties, it has grown off its balance sheet. Talent now has more than 8 million users and is profitable.
Three core products make up the Talent platform:
Recruit allows hiring companies to list jobs, filter applicants, message candidates, and manage interviewing. Businesses can pay to promote their job and increase its visibility with an advanced version of the platform available for $250 per month. This "Recruit Pro" offering unlocks more candidate filters and adds features like instant scheduling.
Businesses looking for more of a white-glove service graduate to Curated. Rather than searching for a candidate, companies outsource the task to AngelList's team. A dedicated representative vets applicants, surfacing only those they believe fit the hirer's more detailed brief. The service is limited to engineers, product managers, data scientists, designers, and sales reps. It charges $250 per month with a success fee of 20% of the candidate's base salary – in line with other recruiting firms.
Recently, Talent has rolled out a variation called Curated Global focused on hiring beyond the borders of the United States. Still in early access, Curated Global advertises a price of $6,000 per hire for upfront payment or $12,000 per hire once a seat has been filled. Clients can secure additional support for $2,000 per month.
Talent's newest addition seems to be Remote, a suite to hire global employees. The product has several nifty features, including filtering by timezone, willingness to work US hours, and performance on various tests. These assessments are completed by candidates on the platform and focus on engineering skills, including front-end, back-end, Android, and iOS development abilities. Candidates can also record two-minute video or audio "resumes" to detail their skillset.
The Remote product reveals where Talent's future may lie. Now that the tech industry extends across domains, there's an opportunity to specialize the core offering for certain use cases. Remote work is a crafty horizontal approach, but Talent could run the same playbook for specific verticals like crypto or healthcare. Each of those sectors has quirks that could support a specially designed offering. The tricky part of such a maneuver would be to serve such needs without complicating the core product.
Perhaps the final point about Talent is how neatly it intersects with the Venture flywheel mentioned earlier. As more companies join AngelList Venture and raise money, the likelier they are to look for employees and list job postings. This leads to more talent joining the platform, attracting more companies.
It's worth noting that there appears to be some heat loss in this system. Though Talent and Venture are loosely linked by brand aesthetic and a few calls-to-action pointing in either direction, they are truly different businesses. While that has benefits, particularly regarding focus and execution speed, it stymies closer collaboration. For example, during my demo of Stack, I asked Sridhara if the tool's hiring feature pulled in data from Talent. Because such an integration is relatively non-trivial, it doesn't. Ultimately, these are small complaints, but as both Talent and Venture expand, the potential for overlap is likely to increase. Rebundling certainly wouldn't make sense, but more active collaboration might.
In April of last year, The Generalist conducted a deep dive on Product Hunt. With the benefit of time and new sources, we can add a little detail to that story and pick up where it last left off.
As we shared earlier, Product Hunt was acquired by AngelList in 2016. Initially, the two teams saw their union as mutually advantageous. Founder Ryan Hoover used the metaphor of a stool to explain high-level internal thinking. Venture was one leg of the stool, giving entrepreneurs a place to raise money; Talent was the second leg, helping those businesses scale their team; Product Hunt was the third, exposing companies to their first customers.
Such a construction made sense in theory but didn't manifest as coherently in practice – or at least not in a matter that created obvious synergy. Instead of forcing it, AngelList allowed Product Hunt to grow independently. Reflecting on the changes that occurred to his business after the acquisition, Hoover noted that beyond turning on revenue (Product Hunt would become self-sustaining) and reporting to AngelList management every once in a while, not much changed. "The only difference was meeting [Laws]" for updates and advice. Hoover added that there had been a kind of cultural exchange between the two companies, with Product Hunt taking on some of its parent's engineering and data-driven habits while AngelList strengthened its community chops.
Product Hunt began its next chapter when Josh Buckley approached the team about spinning the entity back out. As we discussed in our initial piece, given Buckley's venture capital bonafides, it made sense for him to shift its business model from a SaaS and advertising-based approach to an investment play. Product Hunt's new leadership followed through on that strategy, launching Hyper in the summer of 2021. The accelerator invests $300,000 in select companies four times per year in exchange for 5%. The organization promises to help with distribution and hiring for its portfolio companies.
In January of this year, Buckley and Co revealed Product Hunt and Hyper to be part of a larger plan. Along with Ashley Higgins, CEO of Product Hunt, and Shahed Khan, founder of Loom and CEO of Hyper, he unveiled Prologue, a modern holding company sitting above those existing properties. In a launch announcement, Khan described Prologue as a "venture and media flywheel for the next generation of startups."
It will be interesting to see how this new structure develops. Given Prologue's focus on supporting distribution and recruiting for founders, we should expect the team to add new vehicles in both areas. That might involve purchasing insurgent media brands (a move many traditional firms may want to consider) or tech-focused job boards.
It will not be lost on Prologue's three founders that what they're building bears more than a passing resemblance to AngelList. At least at this stage, it appears to be a loose conglomerate bound by a commitment to advance the startup ecosystem. It offers access to capital, recruiting support, and the ability to reach a large, valuable audience – though in a different composition. In that respect, it feels a little like Prologue is using the same ingredients as AngelList but following a different recipe.
As for AngelList itself, the Product Hunt chapter appears mostly closed. "At this point, we have more of a shareholder relationship," Ravikant said. Given the abilities of Buckley, Higgins, and Khan, such a stake may well prove extremely valuable.
Since its founding in 2016, Republic has developed into a leading crowdfunding destination with considerable reach.
In some respects, it's surprising that Republic exists as a standalone business. It appears to be a natural extension of AngelList's foundational goal of giving startups broader access to capital, focused on the non-accredited investor. Wouldn't AngelList be best positioned to execute on such an opportunity directly?
Founder and CEO Kendrick Nguyen explained why that isn't the case, noting that AngelList is an engineering-centric company light on traditional business, operations, and legal talent. That's precisely the sort of team needed to build Republic and overcome the particular legal challenges such a product invites. Nguyen himself was especially well-suited to tackle such issues head-on, given he had served as AngelList's General Counsel.
According to Ravikant, it wasn't an easy road for the business. Several times, he advised Nguyen to give up and move on to another project, but "Kendrick was…incredibly persistent." The founder's grit paid off. Today, Republic reports more than 1.5 million users with $700 million invested on the platform since 2016. In October, the company announced a $150 million Series B, taking total money raised to more than $200 million.
Republic can be a difficult business to parse, though it becomes more legible for students of AngelList. Like its progenitor, the company serves multiple stakeholders, experiments liberally, and spins-out successful experiments. Fundamentally, Republic serves two constituencies:
For founders, Republic's proposed value-add is simple: raise money while growing your audience and welcoming your customers. By opening up allocation to the everyday investor, businesses expand their capital base and have the opportunity to share their message. Republic offers a range of instruments, including debt and equity documentation. (The company also allows real estate developers to sell shares in their new projects.)
While Republic's core offering allows companies to raise $5 million, sub-brand Capital R raises the limit to $75 million. This advisory arm takes advantage of legislation that allows companies to raise more money from the general public if they file paperwork with the SEC. Capital R assists with this multi-month project. Republic monetizes its offering by taking a percentage of capital raised through successful fundraising campaigns. Specifically, the company takes 6% in cash and 2% via its "Crowd Safe," an equity equivalent opening up the potential for upside.
A similar service is offered to token-based projects through Republic's Advisory Services product. It bills itself as an "end-to-end consulting" product for fintech and crypto businesses. It supports tokenization, airdrops, public sales, and legal matters.
Republic's product is both more powerful and more complicated for investors. What began as a way for non-accredited investors to back startups has morphed into a broad alternative asset provider. Users can join fundraising campaigns for startups, real estate, local businesses, games, and crypto. Accredited investors can access a private deal room with exclusive SPVs – a product that directly overlaps with AngelList Syndicates.
Many of these business lines seem to have been added or bolstered via acquisition. After purchasing Compound in 2020, a fractional investing platform for property, the company rolled out Republic Real Estate. The same year, video game financing platform Fig joined the fold, serving as the basis for Republic's version. NextSeed's local business investment platform further expanded the offering, while the pick-up of RenGen Labs appears to have served as the basis for subsidiary R/Crypto.
Taking a page out of AngelList's playbook, Republic has spun up investment products to attract capital to the platform. Republic Capital is a $60 million flagship fund focused on the early-stage crypto market. Nguyen's company has bolstered this move by partnering with crypto exchange Huobi to launch an accelerator for the sector, backed by $30 million.
Republic has a range of publicly available native investment products, too. For example, if you want an index of games in development, you might choose to buy "Fig Portfolio Shares," a basket of projects raised on the platform. If you're more of a real estate person, you could deploy to one of Republic's "Cityfunds," which index different metropolises, including New York, Miami, and Dallas. Should your property tastes skew more ethereal, you might find yourself tempted by "Republic Realm," a vehicle dedicated to investing in digital real estate. The fund raised $75 million to purchase digital parcels of land in ecosystems like Decentraland and The Sandbox.
The rabid demand for Realm has prompted Republic's first fork. Janine Yorio, the founder of Compound, the real estate platform purchased by Republic, is spinning out Realm into a standalone business. Everyrealm will focus explicitly on the metaverse and has raised $60 million in capital from a16z, Coinbase, and Lightspeed. Republic is a minority investor.
The emergence of Everyrealm indicates that Nguyen's business may prove inventively fractal, not unlike the company from which it spawned.
Few emerged from the ICO mania of 2017 with any credit – CoinList is an exception. Created as an alternative to unregulated token offerings, the business has shone by building by the book. The result is a regulatorily-compliant platform for new token projects to debut or expand their holder base – similar value to that provided by AngelList Venture and Republic, though aimed at a different segment. Projects like Solana, Immutable X, Braintrust, Filecoin, Stacks, and NEAR have all used the platform.
As mentioned earlier, CoinList emerged as a joint venture between Protocol Labs and AngelList. Ravikant noted that his company was the "senior partner" in that arrangement, providing software and talent. CoinList has developed its own architecture and a suite of crypto-related tools in the years since. Users can participate in token sales, trade on CoinList's exchange, stake tokens to produce interest, or issue loans. For example, users can lend their Filecoin at a 9% APY for 180 days.
Under the leadership of former AngelList COO Graham Jenkin, CoinList weathered crypto's winter and reached a formidable scale. In October of last year, the company announced it had raised $100 million in a new funding round at a valuation of $1.55 billion. CoinList reportedly grew 40x over the previous twelve months, reaching 4.5 million users and a trading volume of $1 billion per month. About $2.6 billion in crypto has been staked on the platform.
While impressive, these figures trail major exchanges by some distance, with companies like Binance, Coinbase, and FTX handling many multiples of CoinList's monthly volume, daily. This is to say that it seems unlikely CoinList will close the gap on that product, which may be why it is reportedly investing much of its newest round in expanding its staking and lending capacities. If Jenkin can establish the firm as the safest, simplest place to participate in ICO equivalents and dabble in DeFi, catching up on traditional trading volume may not matter.
For AngelList, its bet is already paying off. What started as an experiment is a unicorn in its own right with room to run.
The final star in the constellation is AngelList India. Managed by Utsav Somani, the company brings AngelList Venture's products to the Indian market.
Founded in 2018, AngelList India exists thanks to Somani's on-the-ground work and the support of Naval Ravikant and his team. According to Ravikant, the Indian business is technically "still a subsidiary," though it has a separate, sub-cap table that has attracted outside capital. Somani licenses AngelList's software, giving it a huge leg up over a potential newcomer. Because of that, anyone that visits AngelList India's web page will notice an immediate resemblance to its parent business, both in brand and offering.
The company's main product is Syndicates, similar to AngelList Venture's. So far, AngelList India supports more than 50 syndicates invested in significant domestic companies like BharatPe and Dealshare. Additionally, Somani's business provides RUVs to founders, simplifying their cap table management. Both products have helped attract capital; Somani told me that his business has an AUM of $250 million, growing quickly.
AngelList India has also deviated from the American business's playbook. As Somani said, "We've relied on their innovations, but we've also done a lot of new things for India as well." In particular, he pointed to EquityList, a cap table administration tool for local startups. This "Carta for India," as some have called it, comes at no cost, giving founders an extra reason to join the AngelList India ecosystem, just as Stack does for AngelList Venture.
Somani has also spun up native investment vehicles to bring capital aboard. The Collective acts as AngelList India's version of the Access Fund, backing syndicate leads with up to $150,000 per deal. Last month, Somani added another entity to the mix: Galaxy. The fund is "inspired by Spearhead," down to the web design, giving Indian founders $1 million to start their investing career and a further $2 million to those that do so successfully. The $45 million fund is backed by Naval Ravikant, Tim Ferriss, Lachy Groom, and others.
In many respects, AngelList India seems to be following in AngelList Venture's footsteps, but with the benefit of the parent company's hard-earned wisdom. It can skip failed experiments, plug in winning software, and build native equivalents of products that have succeeded in the United States. In tandem, it can address market-specific needs.
This approach prompts two questions.
Firstly, what features will AngelList India incorporate next? When I asked Somani if he could license Stack from AngelList Venture, he suggested it was an unlikely solution given the stark differences in banking infrastructure and regulation. Nevertheless, when talking about the company's future, he framed his response as a question: "How can we be the Startup OS of Indian Startups?" Any response to that question is likely to look similar to Stack, at least in part.
Secondly, if AngelList can succeed in India, where else might it work? It's a challenging question to answer. The United States is far and away the largest venture capital market, and other popular nations like China are likely out of reach for regulatory reasons. The creation of AngelList India feels anomalous, at least for the time being.
The job of the constellation is to reveal a divine architecture. Out of chaotic disaggregation, shape and sense and elegance emerge.
Though tricky, we must try to do the same now, linking AngelList's collected entities. While succeeding in this task doesn't change the constituent parts, it helps us understand what animates them, how they work together, and what they mean in some larger sense.
Before we embark on that exercise, we can survey the state of AngelList's ecosystem. Mapped out, it looks something like this:
Now, let's do our best to find sense in this structure.
Though no mental model fits AngelList perfectly, three structures best capture the entity as it stands:
- Venture studio
- Venture firm
From one vantage, AngelList looks like a conglomerate. It is a collection of companies with overlapping ownership and occasionally imbricated infrastructure. While it is openly hands-off, that does not necessarily invalidate this approach. After all, Constellation Software has grown to a $36 billion market cap in part by letting its constituent businesses operate freely.
The trouble with this analogy is that AngelList doesn't have a holding company. Formally speaking, nothing wraps these different properties in a single blanket. Babak Nivi noted that there had been an AngelList holding company previously, "but now everything has been spun out into its own entity." Those that held shares in the supra-entity now hold stakes in each business.
Perhaps, for that reason, AngelList is better understood as a kind of accelerator or venture studio. As we'll discuss soon, the company tries to recruit former founders because it believes they are best-suited to drive innovation. Though these employees work on AngelList, there's a pattern of allowing them to take their most disruptive innovations and fork them into separate entities. Ravikant noted that part of his pitch to potential recruits was that "when you're ready, we'll back you." AngelList equips those spinning out with capital and talent and sometimes allows them to leverage the parent brand. (In that final point, it resembles a franchise.)
The flaw in this framework is that none of this seems to be formalized. AngelList doesn't set out to start a certain number of companies a year or pursue building within some fresh sector. In that respect, it acts almost like a studio with no self-awareness – it keeps building companies without trying.
The neatest description of AngelList may be that it's a venture firm run by social networks and software. Sumukh Sridhara posed this as a potential descriptor, saying that to some, "AngelList is the world's largest venture firm with hundreds and hundreds of GPs."
This makes a kind of sense given that almost all of AngelList's entities amass equity, or an equity equivalent, in early-stage projects. AngelList Venture captures carry on the capital it directs and runs its native funds. A similar structure exists on Republic, CoinList, and AngelList India. Prologue, parent of Product Hunt, directly invests in startups through Hyper. The exception is, of course, AngelList Talent. If you wanted to stretch this metaphor to its limits, you could argue that Talent acts as a kind of "portfolio service" in this fractal firm, but the comparison is not altogether convincing.
Ultimately, AngelList remains a quixotic construction that has grown according to circumstance rather than a grand design.
However one chooses to parse AngelList's ecosystem, there's no doubting its pieces are extremely valuable. Though exact numbers are hard to come by for many of the entities, we can make some rough estimates. We should reiterate, of course, that when it comes to many of the companies mentioned, AngelList is simply a minority shareholder.
As noted, AngelList Venture is worth $4.1 billion. After years of being something of a "slow burn" per Babak Nivi, the company has caught fire in the past two years. Rolling Funds, RUVs, and Stack have fundamentally altered Venture's trajectory, and we can expect these products to compound in time.
Talent is harder to gauge. Matani noted the firm was profitable, serves 8 million users, and has a headcount of seventy. Vettery, a recruiting platform focused on the tech market, sold to Adecco in 2018 in a deal rumored to surpass $100 million. Exact candidate figures weren't released, but after Vettery bought Hired.com in 2020, the firm announced that the joint businesses served 3 million users. It doesn't seem unreasonable to think Talent could be valued in the nine figures.
Prologue raised a $23 million initial round and holds an established asset in Product Hunt. Given that Hoover's business was bought for $20 million in a chillier venture climate when it was much smaller and had no revenue, the refreshed edition is worth considerably more. The presence of elite talent like Buckely, Khan, and Higgins adds to that sum. Given current venture valuations and the caliber of the team, it would not be surprising if Prologue's round valued the holding company at $250 million or above. In response to a request for more information, Prologue's team confirmed their valuation to be in the "hundreds of millions."
Republic has not released valuation data, but given that the company recently tacked on $150 million in a Series B, it seems safe to assume it is valued at a minimum of $500 million. The company reported having $1 billion assets under management as part of that raise. However, it's difficult to gauge how this AUM should be valued given the circuitous and complex ways Republic might extract value from this sum.
In October 2021, CoinList was valued at $1.55 billion. That figure is recent enough to remain relevant and makes our task simple.
Finally, we arrive at AngelList India, which is the most challenging. We know that it is a subsidiary with external investors, but Somani's business has not announced a raise. With $250 million in AUM, the platform is about 2.5% the size of AngelList Venture. It is operating in a less competitive but much smaller venture market. We might expect the business to be valued at a fraction of AngelList Venture — perhaps around $50 million.
Ultimately, we'll likely never have a clear picture of exactly how much AngelList's constellation is worth. At the very least, two of its affiliated businesses are confirmed unicorns, and several others are likely valued in the hundreds of millions. Significant value has arisen from an unorthodox structure.
Despite AngelList's structural variety, it does seem to be governed by a coherent logic and set of cultural values. This forms the basis for a kind of playbook, a set of steps AngelList follows to create value for its different entities. It centers around hiring founders, encouraging experimentation, aligning incentives, maximizing leverage, and being long-term greedy. For simplicity's sake, we'll primarily focus on how these traits have manifested at original properties AngelList Venture and AngelList Talent.
"Naval and I were never great managers," Babak Nivi said. "We don't want to manage, don't know how." Perhaps because of this deficiency, AngelList has focused on hiring those resistant to oversight: former and future entrepreneurs.
The company emphasizes its flexibility and follows through on that promise. Candidates are assured they will be largely left to their own devices and permitted to explore interests outside their core role. Amit Matani, CEO of Talent, remarked that part of the reason he joined AngelList back in 2013 was that it felt like a "halfway house for founders." Several other sources shared similar thoughts. Entrepreneurial talent looking for their next challenge would hop aboard, expecting to last a few months, and end up staying several years. This remains a priority today, with Avlok Kohli remarking that 29% of those in the engineering, product, and design departments were former founders.
Part of the reason this approach worked is that AngelList primarily staffed engineers. The company explicitly values builders, not managers, and wants those who can actualize ideas themselves, with no additional help.
Even when hiring for roles outside software development, AngelList would try to find a candidate aligned with that ethos. Ravikant noted that when it was time to appoint a General Counsel, he looked for "the most innovative lawyer we could possibly find." They found Kendrick Nguyen, who went on to launch Republic. Similarly, Nivi noted that Graham Jenkin had joined the company as a designer, eventually stepping into the COO role and finally running CoinList. AngelList wants someone with a founder's mentality, whatever role it is filling.
According to Nivi, this approach allowed AngelList to compete on talent even when the company had yet to truly take flight. "We always managed to recruit high quality people," Nivi said. "Even when we weren't a Stripe…when we weren't exploding."
AngelList's laissez-faire approach to management did have its downsides, though. While recruiting those that operated like a "one-man startup or one-woman startup" gave the company firepower, AngelList didn't always have the managerial nous to direct it effectively. That seems to have changed in recent years. Sumukh Sridhara and several others emphasized AngelList's shipping speed. When we spoke earlier this week, Sridhara said, "We built a product last night that I think will be huge." In Sridhara's estimation, it had gone from 15% completed to about 90% done with just one engineer. Such is the power of the one-person army when properly directed and supported.
Because of AngelList's focus on founders, it has amassed an impressive alumni network. AngelList's "mafia" has gone on to launch impactful venture firms and venture-backed companies, even excluding those directly born from the parent company. Entities like Pioneer, On Deck, CommandBar, Leopard, Unsupervised, and Hack VC trace their origins to AngelList. "When people leave, they don't leave to go to another company generally," Sridhara explained.
Republic CEO Kendrick Nguyen gave an erudite description of AngelList, calling it a "culture and framework of rapid ideation." It feels like an apt summation of a company constantly pushing its team to explore and experiment.
To say that many of AngelList's leading products have arisen from this process understates the matter – the company in its entirety is an unbroken string of pivots, forays, and forks. What started as a newsletter turned into a vertical social network that became a venture administration software that blossomed into a tessellate of investment vehicles, crowdfunding features, accelerators, and beyond. This bizarre, peripatetic path could only arise through frequent and fierce experimentation.
Not all experiments have worked out, of course. As we've noted, AngelList scrapped Ravikant's idea for a secondary market – at least for now. Various attempts to build a compelling newsfeed and other social features fell by the wayside. As Kevin Laws said, "there were a lot of tries."
It is AngelList's willingness to try, of course, that has driven its success. Rather than constraining its creativity, it has given itself permission to experiment and innovate.
"Incentives drive everything," Ravikant told me. They have certainly played a pivotal role in how he conceives of his associated businesses.
Indeed, the primary reason AngelList spins out its most successful experiments is that the company believes this structure better aligns incentives. In Ravikant's view, it is preferable to have a team focused on a narrower problem for which their efforts are directly rewarded. Instead of having a staff jointly running a job board and venture platform, why not bifurcate them? Rather than ask your engineers to support a crowdfunding business, why not start from scratch? In the world of AngelList, the best way to move quickly is to start afresh with incentives suited to the task at hand.
Ravikant and his team also adjust incentives when circumstances demand. For example, during its early life, roughly 70% of Republic was owned by AngelList. Ravikant recognized that this structure made it difficult for the company to attract outside investors and may not have sufficiently rewarded the founding team. AngelList gave up a large portion of their stake, making room for new capital. Ravikant felt it was no accident that the company seemed to operate much more effectively after this maneuver – the incentives had been appropriately aligned.
If the subject of "leverage" has a contemporary poet laureate, it is Naval Ravikant. He has written extensively on the subject, describing our era as the "age of infinite leverage" and arguing that the leveraged worker can "out-produce a non-leveraged worker by a factor of one thousand or ten thousand."
It is unsurprising, then, that Ravikant seeks to maximize efficiency. This starts by hiring the one-person hacker army type mentioned earlier. AngelList Venture currently employs 132 people, according to Kohli. At a valuation of $4.1 billion that suggests a market value per employee of $31.1 million. This figure compares favorably to an adjacent business like Carta, which was valued at $7.4 billion in August of last year and employs roughly 1,600 people, per LinkedIn, producing a market value per employee of $4.6 million.
Another indication of AngelList's leverage is how effectively it has deployed its capital. According to Ravikant, AngelList had raised around $86 million before its most recent $100 million top up. This suggests the company has effectively transformed every $1 million in capital raised into $22 million in corporate value. Again, this compares favorably to Carta, which has raised $1.1 billion to attain a $7.4 billion valuation.
How does AngelList get its leverage? According to Ravikant, it can partially be explained by avoiding sales and marketing spending. "To this day, we hate sales and marketing," he said, emphasizing his distaste for "hand-to-hand" sales, in particular. Such activities are, to Ravikant, obviously low-leverage, proof that a business is failing to attract customers on its own accord.
Be long-term greedy
For a business constantly in a state of invention, AngelList demonstrates impressive patience. In a sense, this poise has been a prerequisite; AngelList's launch predates the popularization of venture capital by several years. To Babak Nivi, the Venture arm's recent success is in part down to the market catching up to the business. "The market didn't really materialize for five to ten years almost. We just managed to have enough capital to stay alive."
Strategically, this patience is born of AngelList's recognition of the benefits of being long-term greedy. There are so many instances in which Ravikant and Co seemingly could maximize short-term value but succeeded in keeping their eyes on the end goal. It must have been tempting to hijack Product Hunt's distribution to pump AngelList's products or sell off Talent once it started making some money. Another business might have meanly guarded the ICO opportunity or crowdfunding market, warding off interested parties. AngelList might have tried to juice or optimize or gatekeep in dozens of different ways, but it didn't.
Instead, the company has repeatedly recognized that more value can be created by letting others run at a problem. It is a textbook example of the boon of being long-term greedy.
When I asked Kevin Laws what he thought AngelList might look like in a decade, he said, "I have no clue. That's kind of the good part of it."
He has a point. How could anyone predict what this business might become, given how much it has changed in its first twelve years of existence?
With the deck stacked against us, we will do our best. The good news is that there's no shortage of potential options for AngelList to pursue. Again, we'll focus our thinking primarily on AngelList Venture, given its prominence and the accelerating independence of affiliated businesses.
The new $100 million round
Before jumping into what AngelList might build next, we should highlight how the company will finance its future.
On March 7, AngelList Venture shared an exclusive with The Generalist: the company has raised $100 million at a $4 billion pre-money valuation. The round was led by Tiger Global with participation from long-time collaborator Accomplice. According to Avlok Kohli, the deal closed just two weeks ago. Given that the market for late-stage financing has softened in 2022, the fact that AngelList Venture can command such attractive terms is testament to the company’s firm footing.
In a draft of a formal announcement I reviewed, AngelList Venture shared some updated figures. Close to 200 unicorns raised money from AngelList GPs with nineteen businesses entering the public markets – a demonstration of the deal quality on the platform. In 2021, 38,000 LPs backed 800 GPs resulting in $3.6 billion invested in 7,000 startups. That’s a deployment rate of which Tiger itself would be proud.
Additionally, AngelList Venture noted it was working on a (rather gorgeous) redesign, teasing this product shot:
The introduction of a more mobile-friendly interface is a reflection of how much the market has matured since AngelList started – we have reached the phase where processing a venture investment on your phone is not only possible but desirable. By making this move, and shifting towards a cleaner aesthetic, the company seems to be taking another step forward in capturing the bottom end of the market.
For a company that last announced a round in 2015, AngelList Venture’s financing carries more meaning than most. Not only is it an indication that the company is on a breakout trajectory but that we can expect big moves in the coming years. Let’s examine what those might be.
Ravikant's picks: Rolling Funds and Stack
If anyone might know what AngelList's future will look like, it's Naval Ravikant himself. As mentioned earlier, the company's founder believes Rolling Funds and Stack are "the only two products" that will matter in ten years.
What explains his ebullience concerning these products?
Ravikant's enthusiasm for Rolling Funds is partially informed by its traction. He noted these are expanding rapidly, with new managers hopping aboard and existing managers increasing their AUM. Kohli shared that Rolling Funds have $1.4 billion in committed capital, assuming a two-year deployment period. "It's growing fast," he added.
Beyond Rolling Funds' explosive traction, Ravikant's excitement is predicated on the cultural value of the product. "It makes us cool," he said, explaining what he meant by the term. "Cool isn't just a random made-up thing. My definition of 'cool' is that you can break the rules a little bit and get away with it." By upending the traditional fundraising cycle, Ravikant sees Rolling Funds as a compelling subversion.
Stack is earlier in its life. Still, Ravikant sees it as a key pillar of the business's future thanks to its utility. "It takes something that ten companies do today…and it collapses it all into one beautiful product," he said. "And it makes it basically free."
Perhaps because of its breadth, it's easy to imagine how Stack might morph over time, especially with the benefit of a fresh capital injection. Pick any one of its features – incorporation, banking, equity management – and you can think of a dozen additions. That includes advanced spending limits, sophisticated card issuances, legal documentation management, corporate credit, treasury services, and so forth. AngelList will need to pick what spaces it wants to own.
Given this broad scope, it's worth wondering: will Stack spin out into a separate entity? Ravikant mentioned it as a possibility, but it doesn't seem to be a priority any time soon. Project head Sumukh Sridhara said, "I don't see a world in which we're spinning out anything…because it's actually accretive." Reviewing AngelList Venture's flywheel reveals why that's the case.
If Stack looks like it's staying put, for now, might AngelList fork some other aspect of its core business? It seems plausible. Three initiatives might be especially interesting:
- AngelList Software
- AngelList Early-Stage Crypto Fund
- AngelList Crypto Syndicates
According to Kohli, AngelList Venture is exploring ways to unbundle what it has built. What might that look like? Given the depth of the platform, there are plenty of directions it might take. An AngelList Software tool might gather signatures around a fundraise, provide simple data-backed legal documentation, manage business reporting, or assist with accounting. Internally, much of this work is done by a group AngelList refers to as Belltower, its operations division. Productizing the tools this team uses – perhaps allied with consulting services – could prove popular and turn one of the company's cost centers into a revenue-generating opportunity.
Though Ravikant was quick to recognize the opportunity in cryptocurrency, AngelList Venture hasn't made a strong play yet. An attractive place to start would be by offering an Access Fund equivalent for cryptocurrency. Investors would effectively back a fund of funds. Given the extremely skewed distribution of outcomes and general sectoral complexity, this would undoubtedly get quickly filled. If AngelList wanted to bring greater expertise to bear, it might partner with an established crypto fund, not unlike it did with CSC Ventures. In either case, it would drive further capital to the platform and better position the business to catch the crypto wave.
Another sound move would be to experiment with crypto syndicates. Last year, Syndicate raised a $20 million Series A to create a version of this product. Structured as "investment clubs" for legal reasons, Syndicate enables users to turn "any wallet into a powerful web3 investing DAO," handling receiving funds from others and managing subsequent investments. While it might be considered a club, it acts similarly to a traditional syndicate or RUV, allowing a group of investors to pool funds and invest as a single entity into both on-chain and off-chain assets.
AngelList must be evaluating a version of its own or at least a substitute. For web3 natives, pooling cryptocurrency is likely easier and more attractive than converting it into USD and backing a syndicate. It is often the preferred way recipient projects wish to receive funds. Kohli suggested his business was looking at the space, examining what it would take for venture capital to "truly move on-chain." Without highlighting any project, in particular, Kohli suggested that many crypto investing platforms build with insufficient awareness. "Most are actually, in some way, shape, or form, not cognizant of regulation," he said.
Throughout its history, AngelList has found ways to democratize venture capital. Thanks to its product, lobbying, and legal work, it is much easier to invest in the startup world or raise money as a founder in that domain. It has perennially moved downstack.
It may wish to focus some of its energy further up the food chain. Earlier, we remarked that though AngelList Venture supported in the ballpark of 10% of venture funds, it managed less than 0.5% of AUM. Equally, we know that driving capital to the platform accelerates the company's flywheel. To keep it spinning, AngelList should find a way to serve larger firms. In time, it might dare to support the kind of mega-firms leading its latest round.
The easiest way to see the gap that AngelList needs to close here is to visit its marketing pages and compare its references and logos to competitors. AngelList's fund management page highlights exciting insurgent managers like Harry Stebbings of 20VC, Rahul Vohra, Todd Goldberg, and Julia Lipton of Awesome People Ventures. At least of those announced, Stebbings runs the largest fund at $140 million. All are impressive and may play key roles in venture's next wave.
Visit the page for Aduro Advisors, though, and you'll see firms that operate at a different order of magnitude. The Denver-based fund administrator counts Ribbit Capital, Cowboy Ventures, Obvious Ventures, and A.Capital as customers. All have raised north of a hundred million. Obvious Ventures' last fund was $271 million; Ribbit's was $1.2 billion.
Carta also appears to be doing better on this front. It serves Blumberg Capital, M13, Northern Light Venture Capital, Tribe Capital, and Boldstart. Again, all manage large nine-figure AUMs, with many managing more than $1 billion.
What explains this discrepancy? Some of it is a matter of focus – AngelList has historically served a different market segment. It may also come down to how the company likes to build and spend money. Creating a personal, high-touch experience may go against the company's obsession with leverage.
Sumukh Sridhara suggested it might have something to do with AngelList's product experience – to his mind, the platform may be too frictionless. An institutional LP might not feel entirely comfortable deploying $50 million after whipping through a few screens. "They're expecting a Docusign and a Microsoft share room," he said.
If AngelList can capture exciting insurgent managers like Stebbings and grow with them, it could catch up. If it wants to do so faster, it may wish to market a white-glove experience aimed at the upper echelons. Sridhara is betting the company will find a way to close the gap. "I don't think it's a particularly hard bridge to cross," he said. "We'll get there."
Something Kevin Laws said stuck with me. At the end of our conversation, I asked what people tend to misunderstand about the company. "There is an intentionality overlaid on what we did and it misses exactly what is magical about AngelList," he told me.
We could say the same of a constellation. In tracing a line around the stars, we give ourselves a pattern to contemplate, a story to tell – but lose something in the process. Through our imagination, we create meaning but neglect the beauty that first captured our attention.
AngelList and its ecosystem did not arise from some master plan. Even Naval Ravikant, one of tech's great contemporary thinkers, could not have set out to design something so studiously intricate. Yes, AngelList is a constellation, but only if we accept the truest sense of the term and the implications it carries. It is a constellation because we want it to be, because our imaginations must find a form on which to focus.
If we wanted, we could speak more simply: AngelList has no shape; it is beautiful.
Next up: the inside story on one of the highest performing funds of all time. Sign up to make sure you don't miss it.
*See important Regulation A disclosures
The Generalist’s work is provided for informational purposes only and should not be construed as legal, business, investment, or tax advice. You should always do your own research and consult advisors on these subjects. Our work may feature entities in which Generalist Capital, LLC or the author has invested.