AngelList has transformed from an SPV provider to a comprehensive software platform for fundraising, investing, and talent acquisition.
AngelList leverages technology, including AI-powered language models, to automate operational workflows and manage a large volume of funds and portfolio companies effectively.
AngelList's vertical integration and technology-driven solutions provide end-to-end solutions, simplify processes, reduce costs, and increase leverage per person.
Deep dives
AngelList's transformation over the years
AngelList started as an email list connecting startups with angel investors, but it has since evolved into a comprehensive platform for fundraising, investing, and talent acquisition. The early focus was on finding product-market fit and overcoming challenges of adverse selection. This led to the creation of the syndicates model and additional features like AngelList Talent and Product Hunt. In 2018 and 2019, AngelList began spinning off these different product lines into separate companies to enhance focus and scalability. Through continuous innovation, AngelList has become a powerful financial platform for managing funds, SPVs, and portfolio companies.
The role of technology in AngelList's success
AngelList's success is driven by its sophisticated use of technology to automate and streamline processes in venture capital. By translating LPAs (Limited Partnership Agreements) into code, AngelList can efficiently manage complex financial reporting, tax reporting, portfolio management, and more. Leveraging tools like AI-powered language models (LLMs), AngelList is able to automate operational workflows and increase accuracy. This technology-driven approach has allowed AngelList to handle a large volume of funds, SPVs, and portfolio companies effectively and earn the trust of both GPs and LPs.
Vertical integration and high leverage
AngelList's vertical integration and technology-driven solutions have enabled high leverage and improved customer experiences. By providing end-to-end solutions, including cap table management, fundraising tools, fund administration, and more, AngelList eliminates the need for multiple service providers and reduces costs. For GPs, AngelList's administrative fee model simplifies processes and allows them to focus on investing and supporting founders. The platform's ability to automate complex workflows through bots and AI-driven tools ensures accuracy and scalability. Furthermore, AngelList's focus on increasing leverage per person aligns with the belief in individual exceptionalism and the transformative power of technology.
The evolving landscape of SPVs and funds
SPVs (Special Purpose Vehicles) have evolved from a mechanism for individual investors to participate in specific investment opportunities to a flexible and elastic scaling tool for funds. GPs can use SPVs to amplify their investments from the fund, enabling deal-by-deal economics and increased flexibility. The rise of roll-up vehicles and normalized fundraising tools has educated founders about the benefits of SPVs. This shift in perception has led to more founders embracing SPVs and their ability to bring in smaller checks from a diverse group of supporters. AngelList's platform and expertise in managing SPVs and funds have positioned it as a leader in this changing landscape.
The revenue models and future of AngelList
AngelList has three main customer groups: GPs, LPs, and founders/startups. The revenue models vary depending on the services provided. For GPs, AngelList charges an administrative fee for managing funds and SPVs. LPs pay broker fees for primary or secondary investments facilitated through AngelList. Founders and startups pay a SaaS fee for using AngelList's cap table management and fundraising tools. AngelList is continuously expanding its product offerings and exploring new revenue models to serve the venture capital ecosystem. The company aims to increase leverage, simplify processes, and provide value across its diverse customer base.
Since joining AngelList as CEO in 2019, Avlok Kohli has presided over perhaps the most unexpected and astounding transformation in the venture ecosystem: taking AngelList from an SPV provider to a company that is quickly becoming the software platform for the entire industry.
Today, AngelList provides investors and founders with the infrastructure they need to launch and scale a startup or fund, and supports over $15B of assets (including David’s own Kindergarten Ventures!). We sit down with Avlok to discuss how it all happened (and happened so fast), and - also unexpectedly and astoundingly - how generative AI is about to transform their entire business and the venture ecosystem again. Tune in!
