How AngelList Is Shaking Up Startup Funding

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Oct. 22 (Bloomberg) -- AngelList co-founder and CEO Naval Ravikant discusses how the company is shaking up angel investing with Deirdre Bolton on Bloomberg Television's "Money Moves." (Source: Bloomberg)

Glad to have you with us.

This new feature lets a trusted investor basically invite other angels to piggyback on the deal.

What gave you this idea to add this particular feature.

The number of companies out there has exploded.

There are lots of companies out there.

We have the world's largest record of loop chips, so we created a co-vester for startups.

They can do it in a different way than venture capitals.

Their own money and taking risk alongside you.

When you speak about the lead angel, what role does social proof play?

I can just invest along with that person?

That is correct.

You can invest as little as $1000 in a syndicate.

What does that mean force -- for famous ones?

Are people going to pay to see the investment list?

How does it work?

Angels can charge a carry which is a per centage -- a percentage of the profits.

He does not charge any carry.

He just wants his friends and fans to be able to coinvest with him.

There are others charging on the profits.

As i mentioned, there are no fees for the model.

Angelist will take five percent.

We get paid on the profit and cover a lot of the costs.

Can amateur angel investors the patient?

This whole system is being tested.

I know angels who are willing to wait 10 years for a company to mature.

You think the people coming onto angelist have realistic expectations as far as profit?

It is a good question.

These are highly liquid, highly risky investments.

We actually educate people.

When you come onto angellist we make sure you are not just sophisticated that are accredited.

Hopefully you have lost money before so you know what that feels like.

You crash the car on someone else's watch, basically.


And we run you through an education process where we show you how dangerous it is.

It is only suitable for a small percentage of your net worth and you really have to go with eyes wide open.

The good news about angellist is you have syndicates to choose from right now.

You have tons of disclaimers there.

A lot of people are saying this is one of the most disruptive things to happen.

I've even heard people say, basically, you are going to lockout the bottom tier.

Do you see that happening?

I do not think we are locking anybody out.

The market is exploding.

There are so many more startups today than there were a few years ago.

There are nearly 100,000 start up companies on angellist.

We are just making the market a little more efficient.

Thank you for the time.

I appreciate having you with us.

The cofounder and ceo of angellist with us there.

This text has been automatically generated. It may not be 100% accurate.


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