Fg Angels

After two years of a dedicated experiment, we’ve decided to stop making new investments via our FG Angels Syndicate. We’ve learned a lot, achieved some of our goals, but ultimately have decided that the effort required to maintain our investment pace on AngelList is too great for us, at least for now. More on that in a bit, but let’s start with some history. The Monday after AngelList announced their Syndicate product in September 2013 we decided to to jump in with both feet and start FG Angels . As a result, we were one of the very first syndicates and the first VC firm to create a syndicate. ...

Six weeks ago I wrote a post titled The Silliness Of Recapping Seed Rounds . I described a situation that occurred in one of our FG Angels investments that I thought was short sighted on the part of the VC involved and the CEO of the company. I characterized the situation as “silly” and specifically didn’t call out the people as my goal was to be instructive around the startup landscape, not to complain (we are big boys and will deal with whatever) or to try to generate a different outcome. I accepted what happened, wrote my post, and moved on. ...

Here’s the scenario. A company raises $2m of seed money from angels in a convertible note with a $6m cap. Assuming equity is raised at or above that cap, the total dilution, before the new money, is 33% (equivalent to an equity financing of $2m at a $6m post money valuation. The company spends the $2m building and launching their first product. The first release is underwhelming, but they iterate aggressively, with feedback and support from some of their angel investors. The product gets a lot better. They go out to raise a Series A, but there are no takers. The feedback is “come back when you’ve made more progress with customers.” They are running out of money. ...

Matt Blumberg, the CEO of Return Path, has an outstanding post up this morning titled The Difference Between Culture and Values . Go read it, I’ll be here when you get back. If you liked that, go get a copy of Matt’s book Startup CEO: A Field Guide to Scaling Up Your Business. It’s one of the books on my list of books all CEOs should read . Matt distinguishes between culture and values. His punch line, which he reveals early, is: ...

If you’ve been following along at home, you know that we recently created an AngelList Syndicate called FG Angels. Our goal is to make 50 investments through AngelList before the end of 2014 . We’ll contribute $50k to each investment; our FG Angels Syndicate will contribute up to $450k. Shortly after doing our first few investments, I got a really nice email from a member of Impact Angel Group , a Colorado-based angel group that organized an investment in the FG Angels syndicate. It shows a second order effect of what we are trying to accomplish with FG Angels. I thought it was worth sharing. ...

We recently funded Blinkfire Analytics using our FG Angels Syndicate. The CEO and founder, Steve Olechowski , was co-founder / COO of FeedBurner, which Google acquired in 2007. I was an investor and on the board of FeedBurner, which is how I got to know Steve. If you don’t know the FeedBurner story, there were four FeedBurner founders – Dick Costolo (now CEO of Twitter), Eric Lunt (now CTO of BrightTag and until recently a board member at Gnip, which Twitter just acquired), Matt Shobe (now at AngelList), and Steve. ...

Google dominates search. Sure, there’s a thing called Bing and a few other choices out there, but everything ends up being the blue and purple link thing curated mostly by machines. In an effort to experiment with a different approach, we recently led an AngelList syndicated investment in one potential search challenger, a Kansas City based startup called Leap.it who is taking a different approach based on the belief that machine-based algorithms can only get you so far. They hypothesize that by injecting social and real-time data, along with interactions with real people, your search results become much better. ...

Google dominates search. Sure, there’s a thing called Bing and a few other choices out there, but everything ends up being the blue and purple link thing curated mostly by machines. In an effort to experiment with a different approach, we recently led an AngelList syndicated investment in one potential search challenger, a Kansas City based startup called Leap.it who is taking a different approach based on the belief that machine-based algorithms can only get you so far. They hypothesize that by injecting social and real-time data, along with interactions with real people, your search results become much better. ...

When the JOBS Act was finalized, one of the rule changes that had a lot of fanfare around it was the increase in the number of shareholders a private company could have. Prior to the JOBS Act, it was 500, after which point the company had to register and report to the SEC just like it was a public company (even if it hadn’t gone public.) This was a major issue for many fast growing companies that either went through strange contortions not to have 500 investors, or filed with the SEC to get no-action letters. There were plenty of nuances around this rule and I was in the middle of several situations that structured around it legally. Each time it was a lot of overhead for the company in question, none of which added anything to the system except fees to the lawyers. ...

What better way to start off a new year than by closing a new investment. This morning we announced that we have closed a financing in OnTheGo Platforms via our FG Angels syndicate . On October 1st, 2013 we announced that we’d be forming an AngelList syndicate called FG Angels and making 50 seed investments through AngelList by the end of 2014 . We committed $2.5m from our Foundry Group funds for this effort and decided to max out the syndicate at $500k / investment, or $25m total. So $2.5m would come from us and $22.5m would come from syndicate participants. ...