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Student Name

MM/DD/YY
BBUS 470 Sec X
AngelList Case
1)
The founders of AngelList, Ravikant and Nivi, had been associated with several different
aspects of starting a business. Ravikant was the founder of several startups and was also an
active investor, and Nivi was also an investor, but brought the venture capitalist side to the
partnership. With Ravikants experience, he provided fundraising and negotiation advice to Nivi
while Nivi was working at Songbird as a co-founder. The two realized that entrepreneurs were
seeking advice about the same thing that the two talked about and many other concepts that
Ravikant had shared with others over time. From this, the two started a blog called Venture
Hacks to help entrepreneurs with their questions about the process of a startup, it also helped the
two give back to the startup community. They soon realized that entrepreneurs werent just
looking for advice, but ways to connect with investors. This provided the insight for the two to
start AngelList. They understood the problems that startups had with investors; investors would
tend to hoard a company to itself after making an introduction. This limited the companys
options and made them settle for something that was most likely suboptimal. AngelList made it
easy for multiple investors and companies to connect, all publically so investors couldnt lock
one company down. Connecting companies to investors historically was a slow and inefficient
process; AngelList allowed companies to free up their time by having the Angels come to them
through the website.
The business Ravikant and Nivi had produced was an attractive one. The two had found a
way to mitigate many of the problems entrepreneurs face during the investment process. It also
helped investors easily find companies they wanted to fund. AngelList provided a service that
automated much of the investment process, speeding up the turnaround on a potential deal, and
relieved much of the management and performance fees that were involved with fundraising.
The company also started Angel Talent, a byproduct of the fundraising process, which helped
alleviate recruiter spam and provide companies with potential talent. AngelList built a solid
reputation by providing high-quality leads for employees and employers.
2)
Typically, it would be very difficult for an angel investor to be able to fund a company
with a low amount of capital since venture capitalist usually had more capital to offer, but
Syndicate changed this aspect of investing. Syndicate allowed lower investments by more
investors through leads. Leads were investors that were able to contribute more capital to a
startup, which allowed the lower level investors (backers) to access in-demand startups, which
otherwise wouldnt be possible. Also, Syndicates offered no management fees and lower carry
fees, which attracted more investors. Angels were able to obtain a larger amount to invest
through Syndicates, and could then compete with venture capitalists. This was better for startups
since venture capitalists agendas usually didnt align with that of the startups. Angel investors
are known for being start-up friendly since they are investing their own personal capital and
want to help the startup succeed.
3)
I believe that the Syndicate service could be scalable in the future, but the current model
of the service doesnt seem to be. Ravikant expresses his concern about the Syndicates and what
it will take to scale the service. He realizes that the turnaround time on current deals between the

company and investor is too long, and will need to be quicker if the service is to be successful
when it is pushed further. One solution he proposes is for investors to preload bank accounts
specifically for doing business on AngelList. This process would ultimately speed up the
transaction once each investor completed the paperwork. That might not speed the process up
enough, though. It was mentioned earlier in the case that investors would get caught up on the
paperwork, and legal documents that was needed to finish a deal between a Syndicate and
company. He may be able to fix the problem of getting capital out quicker, but the process will
still have a bottleneck. A solution for this would be for each deal that is made between the
Syndicate and company, a short term contract would be included that specified the date the
Syndicate would have to be ready to disperse its investment. This means all paperwork would
have to be done by a certain time or else the company could break the deal and partner with a
new Syndicate that was next in line. To mitigate any possible problems with responsibility
issues, AngelList could include a rating of each Syndicate based on their ability to act in a timely
manner and stick to the short-term contract. Syndicates would be motivated to keep a high score
so they wouldnt miss out on the next up-and-coming startup.
The case mentioned that AngelList could be used for other markets outside of Silicon
Valley, and this is why I believe the service is scalable. What really stuck out was the
entertainment industry. This industry has very high barriers to entry since the equipment used is
very expensive. Startup entrepreneurs in this field could benefit greatly from a service like
AngelList. It could be used in the same way, but tailored to fit the needs of the investors and
companies within a certain industry. Just like Angel Talent (startup jobs), another tab could be
easily made that has different industries available.

Insight in starting AngelList


Behavior of angel investors
Syndicates scalability
Communicates information in
an easy to follow manner
Uses correct grammar,
spelling and punctuation.
Efficient maximum of 3
pages plus appendix and is
clear, concise & direct.
Avoids repetition &
wordiness.
Total Percentage

Percent
Awarded

Area

Percent
available

AngelList Case Questions and Grading Rubric

Comments:
Analysis and Plans
30%
30%
25%
Communication of Ideas
5%
5%
5%

100%

Note: Do not copy question in answer, but use the question number.
Case questions:
1) Describe the Insight approach that Ravikant and Nivi used to identify the need for
AngelList. Was it an attractive business opportunity? Why or why not?
2) How did the Syndicates product change the incentives and behaviors of early stage
investors?
3) Do you believe Ravikants vision that Syndicates is scalable? Why or why not?
Case Assignment format:
Cases will be 3 pages maximum, 1 margins with 12 pt. type, single spaced, and must
have the Student Name / Section in the header. You may have an additional 2 pages for
graphs, tables, or charts and 1 page for works cited. Submitted materials exceeding
these standards will lose points in grading.
Please do not include the questions in your answers, rather just include the question
number.