The Ledger
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Kohli predicts all 15-minute delivery startups will go bust
“A hundred percent. Because the cost of capital goes up. And when the cost of capital goes up, you can't invest into launching new cities. And you can't invest into what typically ends up being the J curve of this type of a business where you end up losing mone…”
Gurley: Claims of Disrupting Traditional Venture Capital Have Been Proven False
“I think this whole notion that you're going to disrupt and fundamentally take over the business has just been proven false over and over again. AngelList is awesome, but it's not 20% of the industry, you know. Andreessen said, we're going to completely, you kn…”
AngelList data shows more check-writers leads to more founders and innovation
“Is that when you have more VCs in the ecosystem, you actually do get more innovation, which I know is against what most VCs think, but we're actually seeing it play out in our data that when you have more people writing checks, you actually end up getting more…”
Fontana: Programmatic sourcing of early-stage startups is a fool's errand
“The programmatic analysis of early stage companies, I think, is a fool's errand, and I have seen some of the best data in the world of AngelList. I've talked to all sorts of people experimenting with that data when I was there and since then, and it doesn't re…”
Teten: Traditional Two-Partner VCs Are Threatened by AngelList
“But I think that the modal VC, two partners, and an admin, and maybe an analyst, is under threat from AngelList, because they can't possibly have the level of granular knowledge of different sectors that individual angels do.”
Kohli: Secondary Deals for LP Fund Positions Commonly Clear at 40-50% Discounts
“So one LP will purchase another LP's position and the range of discount that we're seeing actually is anywhere from. But what's more common Is actually 40% or 50% from last round mark. And so you're talking about a pretty significant discount to last round val…”
Kohli: Market conditions do not support a rapid startup acquisition spree
“So I don't think the conditions are there for a rapid acquisition spree. Unless these are, like, rock bottom prices, and it's just like, you know, just, I mean, literally, you're getting an amazing deal, but I don't think that's gonna be good for employees or …”
Secondary VC fund positions are commonly selling at 40-50% discounts
“So one LP will purchase another LP's position and the range of discount that we're seeing actually is anywhere from. But what's more common Is actually 40% or 50% from last round mark. And so you're talking about a pretty significant discount to last round val…”
Startups can no longer raise successive leadless seed rounds
“So what you, what was happening in the heyday of 20, 21 and 20, 22 was that companies would just keep raising these successive rounds and we would see it like C, C plus C plus plus, right. It just keep going on and on and on and always just raising a little bi…”
AngelList expects to host a billion-dollar rolling fund very soon
“And we're actually seeing some rolling funds scale extremely quickly. And we do expect us to have the Equivalent of a billion dollar fund very, very soon under a rolling fund structure.”
Early-stage VCs cannot rely on executing pro-rata rights in breakout companies
“In reality, when you really are trying to invest your pro rata into the companies that are becoming really great, the assumption that it is going to be available for you is false.”
ICOs and token marketplaces will not replace traditional venture capital firms
“When we talk about disruption, I'm very skeptical that where we're going to be in 10 years is, you know, everything is initial coin offerings, and there's no VCs, and, you know, there's just sort of marketplaces like AngelList and Bitcoin, right? Like, I don't…”
AngelList-style platforms will become some of the top venture managers
“So we think some of the best managers, which I will actually be platforms like AngelList.”
Venture capital knowledge will become distributed rather than insider-only
“Maiden Lane is being built and AngelList is being built, you know, in the middle of a city center of a major city, and I think that's sort of the bigger trend of where venture is going. It is no longer going to be a skill set or knowledge of the very few. It's…”
Moehring: AngelList will not render traditional VCs obsolete
“I also don't think to your second point that AngelList will, you know, make the VC model obsolete because the VC model is very boutique you know, especially in later stage investments larger Large amounts are very well managed by the VC firms that exist.”
Teten: AngelList Is Becoming the Operating System of Venture Capital
“We are certainly monitoring AngelList because there is no question that they are working up the food chain to make themselves the fundamental operating system of this asset class.”
Kaji: $5M-$10M micro VCs will launch on AngelList over traditional funds
“The next generation of sort of these proof of concept funds that are, you know, five or ten million dollars are more likely to get down on Angelus than they are, you know, standalone LP funds”
Lemkin: AngelList charges a 3.61% annual management fee for USVC fund
“So AngelList charges 3.61% a year to manage this fund, right?”
Kohli: Individual LP commitments to venture funds fell 60% year-over-year
“When you compare it to venture funds the, and venture funds are the traditional structure and we have a pretty large venture fund business. Individuals are actually down 60% from like when we compare it to about a year ago.”
Time for venture funds to reach first close doubled to 6-7 months.
“We've definitely seen the time to first close has increased. It was three months in the boom times, and now it is six plus months. And when I say six plus months what I'm referring to is the timeline went from six and right now it's trending towards seven.”
Kohli: Distressed startup financings will surge in Q2 through Q4 2023
“And so what's happening is the cash out date was, has been pushed out for a lot of companies. And so our view is that these will start ticking up in Q two and then definitely Q three, Q four, because these startups, they have a brick wall, right?”
Kohli: Large language models automated a good portion of AngelList operations
“And a lot of the large language models and their advancements there have had a major impact on AngelList, just our own internal operations, right? It's been huge. And we've been tinkering on it for many months now, and it's actually automated a good portion of…”
Kohli: Capital markets are closed to startups without credible traction
“What we're seeing in our data is that only the companies that Actually have credible traction are raising now. So even if you put aside adverse selection, meaning the set of companies are raising from insiders and insiders are leading the rounds that we're def…”
Kohli: Series B deal volume and valuations are down over 50%
“I mean, you're talking about deal volume in Series B down more than 50%, valuations down more than 50% Series A is also down Series C is basically Gone, right? Like, I mean, you don't really hear of many late stage deals getting done anymore. It's very, it's r…”
Kohli: AngelList data shows 33% drop in startups raising capital
“And when you just take a look at that sample size of companies from today, sample size of companies in historical average, we're actually seeing a 33% drop in companies in terms of how many companies we expect would have raised by now, right? And so that's a p…”
AngelList data shows startup funding market experiencing largest drop ever recorded
“And so we're actually in the. The depth of the bear market, if you will, for venture right now, and that spread between where it was in the boom times and the bad times is the farthest distance it's ever been on, on everything that we track.”
Venture market contraction between 2022 and 2023 is fastest on record
“It's incredibly fast and it's actually incredible. That, that distance is also incredibly large. So typically, when you have these dots that collect and it's reported every quarter, they're all kind of collect, you know, pretty close to each other, right? It's…”
Avlok Kohli: Early-stage startups have zero defensibility on day one
“Definitionally, you don't have any defensibility on day one because you don't have a business or even day 30, unless you magically get the, you know, pretty large network effects. And even then I would doubt that because that means if you were able to get a la…”
Individual LP commitments to venture funds plummeted 60% year-over-year
“Individuals are actually down 60% from like when we compare it to about a year ago.”
Kohli: Large language models have automated a good portion of AngelList operations
“A lot of the large language models and their advancements there have had a major impact on AngelList, just our own internal operations, right? It's been huge and we've been tinkering on it for many months now, and it's actually automated a good portion of the …”
Venture fund time to first close has doubled to 6-7 months
“We've definitely seen the time to first close has increased. It was three months in the boom times, and now it is six plus months. And when I say six plus months what I'm referring to is the timeline went from six and right now it's trending towards seven.”
Kohli: Rapid startup execution requires hiring chronically dissatisfied, ambitious talent
“I think the most important thing we do is we've hired a group of very ambitious people. A group of ambitious people are very dissatisfied all the time, right? Like all the time. It's like, hey, why aren't we there yet? Like, why aren't we building something ev…”
AngelList data reveals a 33% drop in expected follow-on funding rounds
“And when you just take a look at that sample size of companies from today, sample size of companies in historical average, we're actually seeing a 33% drop in companies in terms of how many companies we expect would have raised by now, right?”
AngelList maintains overall platform gross margins above 80%
“Our margins are actually north of 80%.”
Venture market activity spread reaches largest distance in AngelList tracking history
“And so we're actually in the depth of the bear market, if you will, for venture right now. And that spread between where it was in the boom times and the bad times is the farthest distance it's ever been on on everything that we track.”
Institutional LP venture fund commitments have fully recovered on AngelList
“Institutions this is actually incredibly interesting, went down and then has in recent in recent weeks, spun right back up and has recovered in our data.”
Kohli: AngelList shut down European operations to focus on US
“And so I actually made the decision to scale back and shut down Europe. Because it was just splitting our resources.”
Kohli regularly cancels all his meetings to maintain execution speed
“Like I'll regularly go cancel all my meetings on the calendar because all that really matters is that you're shipping products that your customers love and anything that gets in the way of that and you drag, kill it, crush it, and just focus on Speed.”
AngelList tracked 48 pay-to-play venture rounds in Q1 2023
“So in Q one so far, we've seen 48. These would be these would be the pay to plays.”
Kohli: AngelList data shows strong first-time manager returns, personally invests as LP
“When you look at our data, first time fund managers are fantastic, right? Not all of them, but when you think, when you look at some of the returns, they can be great. So if you have a different way of diligence and first time fund managers, I think it's an aw…”
AngelList data: Series B deal volume and valuations fell over 50%
“Deal volume in Series B down more than 50%. Valuations down more than 50%.”
Shah: Emerging managers must build an AngelList track record before pitching LPs
“I think one is like on AngelList now, there's really no excuse not to have some kind of track record before you go talk to an institutional LP.”
Some established VCs intentionally forego fund reserves to use SPVs instead
“We have some fund managers, some established fund managers, actually, who don't have reserve strategy on purpose. They actually, exactly, they want to focus on just the first checks, and then for pro rata, they can go ahead and have a opportunity fund, or they…”
Destin: Naval Ravikant Created AngelList to Decouple VC Capital From Advice
“AngelList, the original vision of AngelList, because Naval hates VCs, was why don't I separate the skill set here between people who are good at investing and people who would be good advisors, and I'll break it open through a network.”
Naval Ravikant: Talent platform is AngelList's largest business unit
“And then I think the final one is, which came out a little bit in some of your questions, is that Angelus is mainly about fundraising, but the reality is that our talent platform is probably the biggest piece of what we do today.”