#24 - Rolling funds and tech-powered venture capital: Avlok Kohli, AngelList Venture
Apr 8, 2021
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Avlok Kohli, CEO of AngelList Venture, discusses the evolution of venture capital with initiatives like rolling funds and syndicates. He explores the benefits and differences between these models, best practices for engaging LPs, and the future of the VC industry.
AngelList Venture introduced syndicates and rolling fund models to modernize fundraising in the VC industry.
Despite rapid innovation, many VC firms are slow to adopt technology, creating a gap in the industry's practices.
Deep dives
Innovation Misalignment in Venture Capital Sector
Despite living in a software-driven world, the venture capital industry lags in adopting technology. This discrepancy is highlighted by the rapid pace of innovation contrasted with outdated practices in VC firms. Angelus Venture's CEO revolutionized the fundraising process by introducing syndicates and rolling fund models. These initiatives aim to enhance flexibility and accessibility in fundraising, shifting the traditional dynamics of venture funding.
Evolution of Angelus Venture and CEO Background
The CEO of Angelus Venture, Avlok, shares insights into his diverse background that led him to the CEO role. From a software engineering background to founding and operating multiple successful companies, his journey involved acquisitions by prominent firms like Square and Postmates. Naval's proposition to lead Angelus Venture sparked a pivot in Avlok's career towards reshaping the VC landscape.
Significance of Technology and Venture Capital
Technology's rapid advancement drives societal progress, escalating the pace of innovation. Venture capital, as risk capital, fuels these technological developments. AngelList's platform transforms the VC space by enabling the formation of numerous venture funds. This democratization of funding empowers investors to support startups that drive societal change.
Challenges and Evolution in Venture Capital Practices
While venture capitalists invest in technology and innovation, the fundamental structure of venture capital has remained largely unchanged. The enduring nature of VC practices can be attributed to factors like network effects, brand reputation, and the distinct skill sets required for VC success. Angelus Venture's innovative approach aligns with a software-first mindset, streamlining fund operations and decision-making.
We live in a software-powered world but many practices in the venture capital industry still lack the technology it invests in. We see innovation increasing at an accelerated pace, whereas many of the VC firms that finance innovation seem stuck in time.
Avlok Kohli has a few possible explanations for this irony, and a lot of propositions to offset it. CEO of AngelList Venture, he's been leading the platform that adds more flexibility and accessibility to the fundraising process.
Among its products, AngelList changed the game by introducing syndicates and, last year, the rolling fund model.
In this episode, we explore some of the benefits and details of these initiatives, including:
The main differences between syndicates, rolling funds and traditional venture funds