AngelList Review: Venture Investing for Accredited Investors in 2022

AngelList lets you add angel investments to your portfolio – but only if you are an accredited investor. Learn if you should be investing in startups through the platform.

SustainFi   Updated February 24th, 2022

Rating: Excellent (4.5 / 5)

Minimum Investment$1,000 (for individual deals)
FeesRolling Funds: 1-2.5% management fee, 0.15% admin fee, 20%+ carry
AngelList Access Fund: 1% management fee; 20% carry
Syndicates: admin fee, ~20% carry
Non-Accredited InvestorsNo
ESG OptionsSeveral across Rolling Funds and individual investments

Pros

  • Invest alongside top-tier VCs
  • Good selection of investment opportunities
  • Several ways you can invest
  • Relatively long track record

Cons

  • High fees and carry
  • Startup investments are highly risky and illiquid
  • Accredited investors only
  • Additional approvals required to access individual deals
  • High minimums for some funds
  • Must commit to investing for at least 4 quarters for some funds

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What is AngelList?

Founded in 2010, AngelList lets accredited investors buy stakes in startups. Launched to connect angels and startups, AngelList has reinvented itself as an investment platform. It is not a crowdfunding platform like StartEngine but rather a way for sophisticated investors to get access to startup deal flow. AngelList also runs a startup job market, which we won’t review here.

The platform features over 15,000 funds and syndicates, which represent over $10 billion in assets. They’ve even backed 190 unicorns (startups worth over $1 billion.) AngelList investors have invested in companies like Brex, Postmates, Pillpack, Robinhood, and Discord.

Who can invest with AngelList?

AngelList only accepts accredited investors. To be an accredited investor, you generally need to:

  • Earn at least $200,000 a year for two years and expect the same this year ($300,000 if filing taxes jointly) OR
  • Your net worth must exceed $1 million, excluding the value of your primary home

To invest in individual deals, as opposed to more diversified funds, you need to jump through more hoops. AngelList believes that to successfully invest in startups, you need some startup or investing experience, not just the money.

So to make you eligible for picking individual startups, they ask that you’ve done one of the following:

  • Invested in a startup
  • Founded a startup
  • Worked at a startup
  • Advised a startup and received equity compensation
  • Worked as an investment professional

The application takes about five minutes to complete. You may need to provide evidence of your accredited investor status when making investments.

You can choose to invest as an individual, trust, firm, or fund.

Find Alternative Investments

Invest in impact startups

Fees

2.0%+

Minimum

$5,000

Invest in local businesses

Fees

None

Minimum

$100

Buy sustainable farmland

Fees

0.75%+

Minimum

$15,000

How can I invest with AngelList?

If you qualify, AngelList offers several investment options:

  • Rolling funds
  • Managed funds
  • Syndicates

Learn more about each way of investing.

AngelList Rolling Funds

  • Fees: vary by fund, generally a 1%-2.5% management fee and a 0.15% admin fee
  • Carry: varies by fund, generally 20%
  • Quarterly subscription: varies by fund, generally $10-$50k
  • Subscription period: generally between 1 and 4 quarters

Rolling Funds let you invest in hot startups without doing much legwork. You can subscribe to invest alongside VCs like Unpopular Ventures and Forefront Venture Partners. These investors will choose the startups for you.

Most funds make you commit to investing at least $10k per quarter for up to 4 quarters. You will also pay a management fee, generally around 2%, a 0.15% admin fee, and carried interest of at least 20%. Carried interest or carry is the percentage of the upside you give to the fund’s manager in return for picking the startups. AngelList provides a calculator to help you understand your returns and model different scenarios.

You only get invested in deals during the quarters you’re subscribed to a fund. You can’t opt out of deals you don’t like or unsubscribe early if the fund has asked you to commit for several quarters.

AngelList Managed Funds (AngelList Access Fund)

  • Fees: 1% management fee
  • Carry: 20%
  • Quarterly subscription: $50-$75k
  • Subscription period: 1-4 quarters

As an alternative to Rolling Funds, you can invest in a broad venture capital fund, the AngelList Access Fund. The Access Fund lets you invest in all the high-quality Rolling Funds selected by the investment committee.

You need to invest $50k per quarter for 4 quarters or $75k per quarter for at least one quarter. The fund charges a 1% management fee but no carry and no admin fee. However, the funds the Access Fund invests in do charge carry of around 20%, which will be passed on to you. (AngelList will keep around 5% of the 20% in return for their services.)

The Access Fund is advised by SAX Capital. Although past performance doesn’t guarantee future performance, the fund has had a good track record, returning 17%-23% for the funds that closed between 2015 and 2018. Of course, startup investments are very risky, so high returns go hand-in-hand with high risk.

The Access Fund is industry and geography-agnostic. You have no control over which deals they pick, and if your subscription is for 4 quarters, you can’t cancel your investment early.

AngelList Syndicates

  • Fees: admin fee of $8k / deal split among investors
  • Carry: 20% by default but can be changed by the syndicate lead
  • Minimum investment: from $1,000

If you are a more experienced startup investor, AngelList lets you invest in startups on a deal-by-deal basis. To get access to individual deals, you need to be a finance professional or to have worked for, invested in, or advised a startup. If you qualify, AngelList recommends joining 10-15 syndicates.

Deal specifics vary by syndicate. The minimum investment is set by the syndicate’s lead investor and can be as low as $1,000. Admin costs and carry will also vary by deal.

How do AngelList Syndicates work?

Syndicates are groups of investors that invest together. AngelList has over 160 of them. Syndicates show you their deal flow and let you invest in any of the deals. Unlike with Rolling Funds, there is no obligation to invest in each startup.

Each syndicate has a lead investor, who is responsible for making the deal happen. The lead investor earns carried interest, typically around 20%.

Once you’re part of a syndicate, you will get emails with deal invites. You will be able to view investment memos, the terms, the pitch deck, and who the other investors are.

Once approved by AngelList, you can search syndicates by investment stage (from seed to growth and secondary market), company revenue levels (from pre-revenue to profitable), geography, industry, and special interests.

How do you join an AngelList syndicate? 

You need to apply to join each syndicate. The lead will review your profile and decide whether to accept you or not. Including a note with your application may be helpful. AngelList recommends applying to at least 20 syndicates to get access to enough deals.

Find Alternative Investments

Invest in impact startups

Fees

2.0%+

Minimum

$5,000

Invest in local businesses

Fees

None

Minimum

$100

Buy sustainable farmland

Fees

0.75%+

Minimum

$15,000

Can I find sustainable or impact investments on AngelList?

Yes, though not if you choose to invest with the Access Fund, which doesn’t target sustainable investments.

If you want to invest with a Rolling Fund, you have several options, such as:

  • Footprint Coalition Ventures, which seeks to invest in technologies that address the world’s environmental challenges. For example, they’ve invested in a hot nuclear fusion startup Commonwealth Fusion Systems
  • Climate Capital, which invests in early-stage founders building products and services that reduce emissions or help with climate change adaptation 
  • TinkerBarn Impact Fund, which invests in startups that provide social and environmental impact

If you want to invest in individual deals, you can search for syndicates that focus on markets like “cleantech” and “social impact” or have special interests like “female founders” or “minority founders.”

💰 Should you invest with AngelList?

  • AngelList is the best platform for matching angels with startup investments. You can either co-invest with successful VCs or, if you are more experienced, join a syndicate. AngelList may be the best alternative to becoming a full-time angel and cultivating your own relationships and deal flow.
  • However, startup investing remains extremely risky and illiquid, and investments may take 7-10+ years to exit. AngelList is best for those who already have a solid portfolio of liquid assets like stocks and bonds and want to diversify further.

NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.

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