An Angel Fund is a venture fund led by an angel investor.
Angel Funds raise capital upfront and make multiple investments. Legally and operationally they’re like any VC fund. The angel has sole control over investments and can write checks on the spot.
Angel Funds are completely private.
Investors only receive information that you and AngelList disclose. Most angels provide high-level portfolio updates once or twice per year.
AngelList makes the process seamless.
AngelList handles everything through the lifetime of the fund including set up, legal review for investments, taxes, financial reporting, wire transfers and distributions. Angel Funds are backed by institutional investors who've vetted their structure and reporting.
Angel Funds invest broadly in venture capital opportunities.
Angel Funds can invest in venture opportunities ranging from pre-seed through growth-stage companies. They’re able to invest in anything where traditional VCs can invest (i.e., nothing cannabis-related, no pass-through corporate structures, etc.).
Investing from an Angel Fund is as easy as writing a personal check.
You tell AngelList the target company, investment amount and disclose any conflicts of interest. AngelList reviews the financing documents before you sign. Wire transfer to the company is initiated same-day or next-day.
There’s no limit on the number of deals or per-deal investment amount.
You call the shots. Construct the portfolio however you’d like.
Angel Funds complement syndicates.
Investors can run Angel Funds concurrently with syndicates.
You must invest in the fund.
AngelList usually requires a commitment of at least 2.5% of the fund size. Exceptions are made for angels who are less liquid.
All of your on-thesis deals must be done with the fund.
Even if you have a small allocation in a hot deal, you must invest from the fund rather than taking it personally.
You must satisfy regulatory obligations.
Because you make investment decisions, you must satisfy obligations with the SEC. Typically this involves filing for Exempt Reporting Adviser (ERA). This is a lightweight filing that every VC maintains. AngelList can connect you with a third-party to set up.
Angel Funds charge net carry on the entire portfolio.
You set the carry you earn. Backers pay an additional 5% carry to AngelList. Net carry is calculated based on the performance of the entire portfolio. Learn more about net carry and deal carry here.
AngelList reduces carry for backers you bring online.
AngelList reduces its carry to zero for backers you bring to the platform. You can reduce or waive your carry on an investor-by-investor basis.
Backers pay out-of-pocket administrative costs.
There are no setup costs, but backers pay their proportionate share of administering the fund over its lifetime (1%/year for 10 years). This cost may increase if complex financial reporting is required.
Angel Funds are reserved for notable angels and exceptional operators. To qualify for an Angel Fund you must either:
1. Receive a commitment from Maiden Lane, CSC Upshot or E-Merge to anchor your fund
2. Secure over $500K in commitments from other investors
Typically, Maiden Lane, CSC Upshot and E-Merge will only commit to angels who they've backed across many of their syndicate deals. Alternatively, you can send over a comprehensive track record of your angel investments for them to evaluate (kept entirely confidential). If you've advised successful companies or referred them to VCs, that can be counted towards your track record too.
Learn more about syndicates and criteria for deals that work best. Syndicates are also great for investors who don’t want to commit to a fund or prefer the flexibility of raising capital on a deal-by-deal basis.