Ask HN: Is AngelList Legit?

I've invested in over 100 startups through syndicates on AngelList in the past few years. It's not possible for a syndicate lead to steal the money. AngelList collects directly from the investor and wires directly to the company. Plus I've been paid out 6 times from exits.

But you can definitely make bad investments, just like on Robinhood. Except in angel investing, odds are you're never going to see that money again (like 1 in 20 startups makes it).

Also try to remember that you and the syndicate lead are most likely a tiny check to the company, so you aren't getting information rights. You're essentially just along for the ride. Buckle up.

algo_trader · a year ago

> I've invested in over 100 startups through syndicates on AngelList

Good on you ;)

Are these startups there for the convenience, or are these slightly less connected founders?

thelastparadise · a year ago

> try to remember that you and the syndicate lead are most likely a tiny check to the company,

Also remember all the high quality startups have their pick of funding sources. They aren't going to be on platforms like this or secondary markets. And certainly not with good terms for investors.

GoRudy · a year ago

I don’t think this is accurate. It’s usually not the company directly raising on AL. Rather it tends to be a syndicate with partners who have a connection with the company that is raising.

There are various reasons why a hot company might still have a syndicate including the syndicate lead was an early investor in the company so the founder is giving them an allocation in the subsequent rounds.

rokhayakebe · a year ago

Would you mind sharing high level results?

bombcar · a year ago

From the post, invested in 100, paid out on 6, some will still be in flight and some have died.

Even if the other 94 are dead, 6% is not horrible.

In mid-2012, Naval Ravikant and Kevin Laws, AngelList's chief operating officer, were active in Washington in his support for the Jumpstart Our Business Startups Act (JOBS Act), a law that eased many of the United States' securities regulations with the aim of making it easier for companies to either go public or to remain private longer while continuing to raise capital.

Assets supported for investors on AngelList increased by 50% to $15 billion year-over-year in 2022.. [AngelList] turned to venture to fund its own growth — raising a $100 million Series B co-led by Tiger Global and Accomplice at a $4 billion valuation.. AngelList has 130 employees.

It was legit when it first came about, I know that much, and was started by well known and trusted people in the tech scene back then, but any platform that has money flowing through it will undoubtedly be found and utilized by folks who aren't legit, looking to scam, or to otherwise move money between hands.

I'm not saying AL has that, but it's old enough now to where I'd be surprised if it didn't have that. Same is true for GitHub Sponsors, Patreon, GoFundMe, etc.

These platforms are all ripe for laundering imo. Investment or sponsorship funds go in dirty, and come out the other side as clean income complete with year end tax documents. Again, I'd be more surprised if this isn't happening on these platforms, but that doesn't mean the platforms are not legit either.

dartos · a year ago

I feel like that kind of abuse would be easy to spot on GitHub.

wutwutwat · a year ago

Yet organizations like these usually have entire teams dedicated to combating such things, governments have entire departments or full organizations tasked with finding and prosecuting such people, credit card companies/banks have internal investigators tracking down who's messing with their money, and countless books and movies have been created to tell the story of unique, hard to catch perpetrators of such fraud.

You'd be surprised what lengths people will go to avoid detection, and the sometimes genius people who are involved in money laundering or other types of wire fraud.

> Online job marketplaces such as Freelancer.com and Fiverr, which accept funds from clients and hold them in escrow to pay freelancers. A money launderer can post a token job on one of these sites, and send the money for the site to hold in escrow. The launderer (or his associate) can then sign on as a freelancer (using a different account and IP address), accept and complete the job, and be paid the funds.

https://en.wikipedia.org/wiki/Money_laundering#List_of_metho...

UofA4161 · a year ago

walterbell · a year ago

Wikipedia mentions their impact on U.S. fundraising law, https://en.wikipedia.org/wiki/AngelList

Some stats, https://techcrunch.com/2023/07/28/angellist-expands-into-pri...

sixhobbits · a year ago

The platform itself is "legit" in the sense that it has real people well known in the tech community behind it. I personally would be very surprised if they are running a blatant scam in that they are lying about the SAFE investment.

However I wouldn't be at all surprised if the smallprint somewhere in a long chain of paperwork means that you will never get any financial return in your "investment". There are a few platforms and crowdfunding platforms that let retail investors put small amounts of money into startups and I have never heard of a single case, even from an anonymous netizen, of anyone getting money back from such a structure.

zh3 · a year ago

Certainly investors have seen returns from companies on Crowdcube [0] in the UK - or am I missing something about AngelList? (not having looked at it)

Disclaimer: I work for one of the companies currently raising money on Crowdcube.

[0] http://crowdcube.com/

throwaway2948 · a year ago

Actually I've had "money back" twice from AngelList. Once a startup got acquired (for like 3-4x), another one shut down and distributed the remaining funds.

But I did not withdraw it and just reinvested to other startups, so in that sense I've never received money from them.

rickydroll · a year ago

That feels like buying more lotto tickets with the winnings from previous lotto tickets :)

486sx33 · a year ago

I have seen investments come through, I don’t doubt that.

The company I know that got the funding I would not have invested that kind of capital in , ever.

Then again that’s VC for you, a long list of failed ventures and a shorter list of impressive huge returns on investment.

I subscribe to very conservative accounting principles, I get insanely fixed on burn rate, I cannot sleep at night if my company is in the red. If everyone thought like me innovation would be at a humanity level low. Huge credit to all founders, it is a big mind fuck.

I would try contacting the startup to confirm they have received investment via AngelList, but conveniently their terms forbid you from contacting startups directly.

mooreds · a year ago

That seems weird. Is it so that you don't invest directly and cause Angellist to lose income?

Seems to me like some line of communication between founder and investor should be enabled/encouraged.

tommoor · a year ago

It's to protect the startups from hundreds of tiny checks emailing and hassling them. There is a line of communication between the founder and the syndicate which is technically the real investor here.

darkerside · a year ago

Party of the benefit of funding through platforms like AngelList is not having to deal with questions from 25 different investors, and instead having one, freeing your time up to work on the business instead of having to respond to 25 different well intentioned but not fully plugged in investors.

stevengraham · a year ago

This would not be productive. Investors who come in throught mechanisms like this (SPV) do not appear on the companies cap table and would not directly interact with a startups IR team. This is normal for this type of investment.

gws · a year ago

I’ve withdrawn money from AngelList after distributions, the platform is legit.

tinyhouse · a year ago

I think you're asking two different things. AngelList is legit. They have a popular investment platform many legit investors use and many other products and features.

The private syndicates on the platform is a different story. I would be very cautious with my money. If you don't know and trust the people in charge, you better off investing your money somewhere else. I doubt most of them can make meaningful returns, yet alone not losing money.