Wayne is IN! And I’m thrilled to be along for the ride. Details below.
Let’s start with some non-controversial startup investment logic:
1) Critical elements to successful startup investing are staying on top of technology trends and having access to good deals
2) Smart entrepreneurs seek out as advisors/investors those successful role models who they can relate to (i.e., are the same age, travel same circles, have friends in common, etc.)
3) I have a limited amount of connections and knowledge, so the best thing I can do is get great scouts who see things (in both the access and perspicacity sense) that I never will.
All of which make me want to hop on the coattails of great young entrepreneurs once they take some of their well-earned cash and start reinvesting in the ecosystem as angels. How to do this? Guys, start an AngelList Syndicate!
I’m not the only one thinking this. This tweet came out a little after the Twitter IPO.
And I’m delighted to learn this morning that Wayne Chang, the co-founder of Crashlytics, has agreed to lead a syndicate on AngelList. And best of all, he’s agreed to syndicate everything he does, so there’s no anti-selection going on. Plus, as head of Twitter Boston, he is at the vortex of what’s going on.
I remember asking Wayne to take a look at two deals I was looking at given his expertise. I expected perhaps a “I like it” or “Stay away”, but instead he produced two dense pages of really incisive industry trends, probable snags I hadn’t envisaged, as well as where he thought the real killer app would come from in the field. I already knew Wayne was a fearless investor who didn’t rely on social proof(first check into Onswipe, for instance), but the level of investment blew me away, and I promised myself to follow Wayne however I could. And I was fortunate enough to have him let me into his own Crashlytics deal, for which I will be playing with house money for several years.
Who are the other investors I want to encourage to syndicate? How about this for a list: Jennifer Lum (co-founder of Adelphic Mobile, and a mobile ad expert with previous success at Quattro Wireless, with several angel investement wins via her vehicle Apricot Capital, including Crashlytics, Peekaboo Mobile, TribeHR…),
Phil Beauregard and Matt Grace (co-founders of Objective Logistics…who also invested in my company, BuysideFX; Phil already harangues me to invest in his favorite companies, ones I had never heard of, showing that young connected entrepreneurs have a lot of sourcing that us old angels never get),
Jeff Seibert (Wayne’s co-founder, former head of Box in Boston having previously sold another of his startups to Box, and like Jen, a bi-coastal presence giving him a wider perspective of what’s out there), and
Bowei Gai (founder of Snapture and CardMunch—see my earlier article on Why I Invested in CardMunch), who is recharging his batteries on his great World Startup Report. You think 500 Startups is going global? That’s nothing compared to what Bowei is seeing on the road full-time. Bowei has a special meaning for me relative to AngelList—he was the first company I invested in via AngelList, and forever will hold the best IRR record for an investment. Even though it wasn’t a great absolute return, LinkedIn made the offer for them 1 day after I got in, meaning I just sent the check in and got an immediate bigger check back. I’ve got the feeling that Bowei may be ready to start his 3rd company when he gets back, but I’m hoping he shares his knowledge via syndicating.
I think there’s beauty in the idea of investing in a syndicate of someone who is still an entrepreneur. (What I would give, for example, to be able to have an angel portfolio like Dharmesh Shah!) First, for them to stick their head up and take notice of something, it must be something special. Second, they are putting their own money in—and you know that as a startup person you don’t take out much salary, so it’s not just bloviating about money, it’s using real chips. And lastly, there are undoubtedly fewer bets going out compared to full-time spray and pray angels (like I used to be before I got a real job again), creating essentially a “best ideas” portfolio.
So Jeff, Bowei, Jen, Phil, Wayne: as far as I can tell, the hassle is minimum: AngelList takes care of the paperwork and recruitment. You get more wood behind your investment, you leverage up your returns, and you only charge your fans fees on successful carry. (Keep it to <=20% including AL’s 5%, though, please.)
Win win win win win win win win win! (PS: Naval, please connect up these other guys to start the bandwagon rolling.)