Venture Capital Slow to Embrace Online Funding Portals
Angel Investors like Gil Penchina are achieving massive success utilizing funding portals like Angel List. Which Venture Capital firm will be the first to recieve this same sort of notoriety? We reached out to Rob Go, a venture capitalist who has a syndicate at Angel List, to talk with us about his personal experiences investing in private equity offerings online.
Rob Go is a cofounder of NextView Ventures, a seed investment fund focused on internet-enabled innovation. Angelist syndicate:https://angel.co/robgo
Q: When did you start investing in equity online on sites like AngelList? Anywhere else beside AngelList?
A: I made one personal investment in a company through an angelist syndicate to see how it works. I tend to think that this is a network effect sort of business, so the biggest platforms tend to be the best. The other platform is FundersClub, that has also had some success and is tapped into the YC network. I also look at Kickstarter for non-equity "investments".
Q: What encouraged you to start investing online?
A: I mainly did it to learn. But again, I don't really invest online much.
Q: What kind of problems are you currently faced with your investment process?
A: Because we are seed focused, we care most about tracking people more than companies. We want to be the first investor of choice for founders in Boston and New York. So our biggest challenge (or opportunity) is finding scalable ways to extend our networks and add value to the lives of high-quality potential founders so that they think of us to partner with them when they start their next company.
Q: What problems do you face investing and building syndicates?
A: The best investments tend to be ones where you are "non consensus right" as Peter Thiel says. Which sometimes means that you need to search a bit harder to find a great coinvestor that believes in a non-obvious business. But for the most part, we have little difficulty in building great syndicates.
Mark Daniel, CEO & Cofounder at Strut, has raised $1.5 million in seed funding at AngelList led by Ben Ling and Khosla Ventures, with participation from Eniac Ventures, Sherpa Ventures, Slow Ventures, SK Ventures, FG Angels, Base Ventures, Kevin Rose, Rick Marini, Ryan Bloomer, Darius Monsef, Steve Jang, Dan Rose, Daniel Brusilovsky, Elliot Loh, Bo Han and Owen Van Natta. He also talked about what he experienced during the crowdfunding.
Q: Why do you choose crowdfunding rather than traditional funding ways?
A: We made commitment with AngelList to work with Venture Capitals and Angels.
Q: How would you describe your experience with angelList?
A: I think it's OK. We were running through everything well such as paper works. Overall it is quit easy because it is simple and straightforward as possible to use. Angelist is a great platform to build network with VCs and Angels.
Q: Are there any problems during the funding process?
A: There are no problems. Everything went well.
Q: If you need crowdfunding now, would JOBS Act Title III influence your decision?
A: Not really. I think it's a really good regulationary and revolutionary senario.
Both of them were satisfied with the experience with angelist and the syndication model. This model allows for investors to combine with other investors they may know, or who may know of them, to co-invest in businesses they deem worthy. Other investors in their network may choose to tag along in the lead investor’s decision based on such investor’s past track record, experience or otherwise. These advantages attracted venture capitalists to start using online equity investment and building syndications.