NEAR APAC, the largest global blockchain conference in Vietnam, is set to take place on September 9th-10th, 2023, at Thiskyhall Sala Convention Center in Ho Chi Minh City. The event promises to be a global gathering, bringing together leading blockchain experts, developers, students, enterprises, and startups from the Asia-Pacific (APAC) region and beyond.
What is NEAR APAC 2023 and why you should attend?
Themed “Unlimited Future,” NEAR APAC will serve as a platform for exploring the latest advancements in blockchain technology and multi-chain decentralized applications within the APAC region. The conference will offer a diverse range of activities designed to engage and inspire participants beyond traditional panel discussions and keynote presentations.
Participants can immerse themselves in a virtual reality playground, explore the Web3 Dating zone tailored for startups and venture capitalists, witness cutting-edge technology demonstrations, and partake in thrilling NFT and gaming activities. NEAR APAC also aims to provide a dynamic and interactive environment that fosters networking, collaboration, and the exploration of emerging technologies.
With over 8,000 expected attendees, NEAR APAC is set to attract a wide array of participants, including 100+ global blockchain leaders as speakers, 1,000+ developers and students from 10+ universities, 300+ projects and startups, and representatives from 100+ enterprises.
Activities and Opportunities
Thinkhall convention – deep discussion about the development of Web3 in APAC (Source: nearapac.org)
The conference offers unique opportunities for each target audience:
Builders: NEAR APAC will host a Web3 Hackfest, Web3 Code Challenge, and Builder stage with the prize pool $110,000, providing developers with a platform to showcase their skills and engage in collaborative coding sessions. The conference will also feature a dedicated hacking area for participants to further explore their ideas. Learn more at https://web3hackfest.org/.
VCs and Start-ups: Wiziin is thrilled to partner up with GFI – the co-organizer of NEAR APAC in hosting The Greenhouse Program – which offers startups an opportunity to join 1:1 pitching sessions with top tier VC funds in the regions, whose main focus is on Blockchain, Web3 and innovative technology solutions. The Greenhouse Program brings venture capitalists on board as speakers, partners, and judges for the Hackathon. Start-ups can benefit from the guidance and support of experienced investors. Visit https://nearapac.org/the-greenhouse/ for more information.
Blockchain Community, IT Students, and Start-ups: NEAR APAC hosts the Web2 & Web3 Career Fair in collaboration with TOP CV, Vietnam’s largest recruitment platform. This unique opportunity allows start-ups and projects to connect with talented individuals and find suitable candidates for their companies.
NEAR APAC is further elevating the event experience with additional attractions designed to captivate and engage attendees. A Web2 technology show will feature fascinating displays such as robot beer servers, holograms, and flying motorcycles. A travel game with a substantial prize pool will incentivize participants to explore every booth, maximizing the benefits for booth sponsors. By completing tasks and collecting NFTs, participants will have a chance to share in the $15,000 prize pool. These activities aim to drive user engagement and provide booth sponsors with maximum marketing exposure during the event.
Register now and secure your place at the forefront of the blockchain revolution.
About NEAR APAC:
NEAR APAC is Vietnam’s largest blockchain/crypto conference entity, focused on showcasing the latest advancements in blockchain technology and multi-chain decentralized applications within the APAC region. With its “Unlimited Future” theme, NEAR APAC aims to foster networking, collaboration, and the exploration of emerging technologies in an interactive environment. For more information, visit https://nearapac.org/.
Blockchain technology is one of the most disruptive and innovative forces in the digital era. It has the potential to transform various industries and sectors, such as finance, supply chain, healthcare, energy, and more. However, not all blockchain projects are created equal. Some may have more value and utility than others, and some may have more risks and challenges than others. How can we evaluate blockchain technologies and business models in a systematic and rigorous way?
In this article, we will discuss a framework for the evaluation of blockchain technologies and business models, based on the Forbes article “Blockchain: How To Conduct Your Due Diligence And Evaluate Business Models” by Nitin Kumar. The framework consists of three tests: a decentralization test, a crypto-asset test, and a business model test. We will explain each test and provide some examples and insights for each one.
Decentralization is one of the core features and values of blockchain technology. It means that the network or system is not controlled by a single entity or authority, but rather by a distributed network of participants who cooperate and coordinate to achieve a common goal. Decentralization can foster innovation, trust, transparency, and resilience in the blockchain ecosystem.
To measure the degree of decentralization of a blockchain network or project, we can use some criteria and indicators, such as:
The number and diversity of nodes: Nodes are the computers or devices that run the blockchain software and validate transactions. The more nodes there are in the network, and the more diverse they are in terms of location, ownership, and affiliation, the more decentralized the network is.
The consensus mechanism: Consensus is the process by which the nodes agree on the state of the blockchain ledger. There are different types of consensus mechanisms, such as proof-of-work (PoW), proof-of-stake (PoS), delegated proof-of-stake (DPoS), etc. Some consensus mechanisms require more computational power or stake than others, which can affect the level of decentralization and security of the network.
The governance model: Governance is the way by which the rules and policies of the network are decided and enforced. There are different types of governance models, such as on-chain governance, off-chain governance, hybrid governance, etc. Some governance models are more democratic and participatory than others, which can affect the level of decentralization and accountability of the network.
Some examples of highly decentralized blockchain projects are Bitcoin and Ethereum, which have thousands of nodes around the world, use PoW as their consensus mechanism, and have mostly off-chain governance. Some examples of centralized blockchain projects are Ripple and EOS, which have fewer nodes that are mostly controlled by a few entities, use DPoS as their consensus mechanism and have mostly on-chain governance.
Advantages of Decentralization
The advantages of decentralization include:
Innovation: Decentralization can encourage creativity and experimentation among the network participants, who can propose and implement new ideas and solutions without relying on a central authority or intermediary.
Trust: Decentralization can enhance trust among the network participants, who can verify the validity and authenticity of transactions and data without relying on a central authority or intermediary.
Transparency: Decentralization can increase transparency among the network participants, who can access and audit the transactions and data on the blockchain ledger without relying on a central authority or intermediary.
Resilience: Decentralization can improve resilience among the network participants, who can maintain the functionality and security of the network even if some nodes fail or are attacked.
Disadvantages of Decentralization
The disadvantages of decentralization include:
Scalability: Decentralization can limit scalability among the network participants, who may face challenges in processing large volumes of transactions or data in a timely and efficient manner due to the high computational or bandwidth requirements.
Coordination: Decentralization can hinder coordination among the network participants, who may face difficulties in reaching a consensus or agreement on important issues or changes due to the lack of a central authority or intermediary.
Regulation: Decentralization can complicate regulation among the network participants, who may face uncertainties or conflicts in complying with different legal or regulatory frameworks across different jurisdictions due to the lack of a central authority or intermediary.
Crypto assets are digital assets that are issued and transferred on a blockchain network. They can represent various types of value or utility, such as currency, commodity, security, utility token, non-fungible token (NFT), etc. Crypto assets can enable new forms of exchange and interaction among the network participants.
To evaluate the value and utility of crypto-assets, we can use some criteria and indicators, such as:
The tokens: Token is the study of how crypto-assets are designed, distributed, used, and managed within a blockchain ecosystem. It includes aspects such as the token supply, the token allocation, the token distribution, the token utility, the token governance, etc. The tokens can affect the demand and supply of crypto-assets, and thus their price and value.
The market demand: Market demand is the level of interest and willingness of the network participants and external stakeholders to acquire and use crypto assets. It can be influenced by factors such as the network effect, network adoption, network innovation, network reputation, etc. The market demand can affect the liquidity and volatility of crypto-assets, and thus their price and value.
The regulatory environment: Regulatory environment is the set of rules and policies that govern the creation, issuance, transfer, and use of crypto-assets within a blockchain ecosystem. It can vary across different jurisdictions and sectors and can be influenced by factors such as the legal status, the tax treatment, the anti-money laundering (AML) and counter-terrorism financing (CTF) requirements, etc. The regulatory environment can affect the legality and compliance of crypto-assets, and thus their price and value.
Security and scalability: Security and scalability are measures of how well a blockchain network can protect and support the creation, issuance, transfer, and use of crypto assets within a blockchain ecosystem. They can be influenced by factors such as the consensus mechanism, the encryption method, the network architecture, etc. The security and scalability can affect the functionality and reliability of crypto-assets, and thus their price and value.
Some examples of successful crypto-assets are Bitcoin and Ethereum, which have high tokens, market demand, regulatory environment, security, and scalability. Some examples of unsuccessful crypto-assets are Bitconnect and OneCoin, which have low tokens, market demand, regulatory environment, security, and scalability.
Advantages of Crypto-assets
The advantages of crypto-assets include:
Efficiency: Crypto-assets can increase efficiency among the network participants, who can execute transactions or contracts faster and cheaper than traditional methods due to the elimination or reduction of intermediaries or fees.
Inclusion: Crypto-assets can increase inclusion among the network participants, who can access financial or digital services that may be otherwise unavailable or inaccessible due to geographical or socio-economic barriers.
Innovation: Crypto assets can foster innovation among the network participants, who can create or use new forms of value or utility that may be otherwise impossible or impractical due to technological or institutional limitations.
Disadvantages of Crypto-assets
The disadvantages of crypto-assets include:
Volatility: Crypto-assets can exhibit volatility among the network participants, who may face significant fluctuations in the price or value of crypto-assets due to various factors such as speculation, manipulation, hacking, etc.
Risk: Crypto-assets can entail risk among the network participants, who may lose their funds or data due to various factors such as theft, fraud, error, etc.
Regulation: Crypto-assets can pose regulation among the network participants, who may encounter legal or regulatory uncertainties or conflicts due to various factors such as ambiguity, inconsistency, enforcement, etc.
Business Model Test
A business model is the way by which a blockchain project creates, delivers, and captures value for its stakeholders. It includes aspects such as revenue streams, cost structure, customer segments, value proposition, channels, relationships, resources, activities, partnerships, and key metrics. Business models can determine the viability and sustainability of a blockchain project in the long term.
To assess the viability and sustainability of a blockchain-based business model, we can use some criteria and indicators, such as:
The revenue streams: Revenue streams are the sources and methods of generating income from the blockchain project. They can include fees, subscriptions, advertisements, donations, etc. The revenue streams should be clear, diverse, and stable.
The cost structure: Cost structure is the amount and type of expenses incurred by the blockchain project. They can include development, maintenance, operation, marketing, etc. The cost structure should be low, scalable, and efficient.
The Customer segments: Customer segments are the groups of people or organizations that benefit from or contribute to the blockchain project. They can include users, developers, investors, partners, etc. The customer segments should be large, loyal, and satisfied.
The value proposition: Value proposition is the unique benefit or solution that the blockchain project offers to its customer segments. It should be clear, compelling, and differentiated.
The channels: Channels are the ways by which the blockchain project reaches out to its customer segments. They can include websites, apps, social media, events, etc. The channels should be effective, accessible, and engaging.
The relationships: Relationships are the types of interactions that the blockchain project establishes with its customer segments. They can include self-service, automated service, personal service, community service, etc. The relationships should be trustworthy, responsive, and rewarding.
The resources: Resources are the assets or capabilities that the blockchain project utilizes to create and deliver its value proposition. They can include human, physical, intellectual, financial, etc. The resources should be adequate, qualified, and protected.
The activities: Activities are the tasks or processes that the blockchain project performs to create and deliver its value proposition. They can include research, development, testing, deployment, etc. The activities should be aligned, optimized, and monitored.
The partnerships: Partnerships are the alliances or collaborations that the blockchain project forms with other entities to create and deliver its value proposition. They can include suppliers, distributors, competitors, regulators, etc. The partnerships should be strategic, mutually beneficial, and synergistic.
The key metrics: Key metrics are the measures or indicators of the performance and progress of the blockchain project. They can include users, transactions, revenue, profit, etc. The key metrics should be relevant, quantifiable, and achievable.
Some examples of innovative and disruptive blockchain-based business models are:
Uniswap: A decentralized exchange that allows users to swap any two tokens on the Ethereum network without intermediaries or fees. It uses a novel mechanism called automated market making, which relies on liquidity pools provided by users. Uniswap generates revenue by charging a 0.3% fee on each trade, which is distributed to the liquidity providers. Uniswap has become one of the most popular and liquid decentralized exchanges in the crypto space, with over $3 billion in daily trading volume as of December 2021.
Axie Infinity: A blockchain-based game that allows users to collect, breed, battle, and trade digital creatures called Axies. It uses a token called AXS, which is used for governance and staking, and a token called SLP, which is used for breeding and earning. Axie Infinity generates revenue by taking a 4.25% fee on each Axie sale, and by selling land plots and items in its virtual world. It has become one of the most successful and popular blockchain-based games, with over 2 million daily active users and over $2 billion in revenue as of November 2021.
OpenSea: A decentralized marketplace that allows users to buy, sell, and discover digital assets such as NFTs, domain names, game items, etc. It uses a token called OPE, which is used for governance and rewards. OpenSea generates revenue by taking a 2.5% fee on each sale, and by offering premium features and services to its users and partners. OpenSea has become the largest and most diverse NFT marketplace, with over $10 billion in total sales volume as of December 2021.
We hope this article has provided useful information and guidance on how to evaluate in a systematic and rigorous way. Blockchain technology is an exciting and promising field that offers many opportunities and challenges for innovation and disruption. However, not all blockchain projects are created equal. Some may have more value and utility than others, and some may have more risks and challenges than others. Therefore, it is important to conduct due diligence and evaluate business models before investing or participating in any blockchain project.
Blockchain technology is a revolutionary innovation that has the potential to disrupt various industries and sectors. It is a distributed ledger that records transactions and tracks assets in a secure, transparent, and immutable way. Blockchain technology can enable new forms of collaboration, coordination, and value creation among different stakeholders.
One of the areas where blockchain technology can have a significant impact is angel syndicates. Angel syndicates are groups of individual investors who pool their resources and expertise to invest in early-stage startups. Angel syndicates play a vital role in the startup funding ecosystem, as they provide capital, mentorship, and network access to entrepreneurs.
However, angel syndicates also face some challenges and limitations, such as high transaction costs, lack of trust and transparency, low liquidity and diversification, and regulatory uncertainty. Blockchain technology can address these challenges and unlock new opportunities for angel syndicates by enhancing their efficiency, security, and scalability.
In this blog post, we will explore how blockchain technology can transform angel syndicates in the following ways:
Enhanced transparency and trust in investment processes
Smart contracts for streamlined syndicate operations
Tokenization of assets for increased liquidity and fractional ownership
Decentralized fundraising platforms and ICOs
Security and privacy considerations in blockchain adoption
We will also look at some real-world examples and case studies of blockchain adoption in angel syndicates, as well as the challenges and future perspectives for this emerging field.
Understanding Angel Syndicates
Before we dive into the applications of blockchain technology in angel syndicates, let us first understand what angel investing and syndicates are.
Angel investing is a form of early-stage financing where individual investors (also known as angels) provide capital to startups in exchange for equity or convertible debt. Angel investors typically invest their own money, have a high-risk appetite, and seek high returns on their investments. Angel investors also offer non-financial benefits to startups, such as mentoring, networking, and strategic advice.
Angel syndicates are groups of angel investors who collaborate to invest in startups. Angel syndicates can be formed by existing networks of friends, colleagues, or acquaintances, or by online platforms that connect investors with startups. Angel syndicates allow investors to share the due diligence process, diversify their portfolio, leverage their collective expertise and influence, and access larger deal sizes.
Angel syndicates have several benefits for both investors and startups. For investors, angel syndicates can reduce the transaction costs, risks, and time involved in finding and evaluating investment opportunities. For startups, angel syndicates can provide more capital, feedback, and exposure than individual investors.
However, angel syndicates also face some challenges and limitations that hinder their growth and performance. Some of these challenges are:
Lack of trust and transparency: Angel syndicates rely on trust among the members to share information, coordinate actions, and distribute returns. However, trust can be difficult to establish and maintain in a decentralized and diverse group of investors. Moreover, there may be information asymmetry or conflicts of interest among the members or between the members and the startups.
High transaction costs: Angel syndicates incur high transaction costs due to the legal, administrative, and operational aspects of forming and managing a group of investors. These costs include fees for lawyers, accountants, brokers, escrow agents, platform providers, etc. These costs reduce the net returns for the investors and the startups.
Low liquidity and diversification: Angel syndicates typically invest in illiquid assets that have long holding periods (usually 5-10 years) before they can exit or realize their returns. This limits the ability of the investors to cash out or reallocate their capital when needed. Moreover, angel syndicates may have limited diversification options due to the availability and accessibility of investment opportunities in different sectors or regions.
Regulatory uncertainty: Angel syndicates operate in a complex and evolving regulatory environment that varies across jurisdictions. There may be legal or tax implications for the investors or the startups depending on the structure and location of the syndicate. Compliance requirements or restrictions may also exist on who can participate in or lead an angel syndicate.
Overview of Blockchain Technology
Blockchain technology is a novel solution that can address some of these challenges and unlock new opportunities for angel syndicates. But what is blockchain technology and how does it work?
Blockchain technology is a distributed ledger that records transactions and tracks assets in a secure, transparent, and immutable way. A ledger is a database that stores information, such as who owns what, when, and how much. A distributed ledger is a ledger that is shared and synchronized among multiple nodes (computers) in a network, rather than being stored in a central location or authority. A blockchain is a type of distributed ledger that consists of blocks of data that are cryptographically linked together in sequential and chronological order.
Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a Merkle tree, where data nodes are represented by leaves). The blocks form a chain of data that can be traced back to the genesis block (the first block in the chain). The blockchain is maintained and updated by a consensus mechanism, which is a set of rules or protocols that the nodes follow to validate and append new blocks to the chain. The consensus mechanism ensures that the blockchain is consistent and coherent across the network and that no node can alter or tamper with the data.
Blockchain technology has several key features and advantages that make it suitable for various applications and use cases. Some of these features are:
Decentralization: Blockchain technology eliminates the need for intermediaries or trusted third parties to facilitate transactions or verify information. Instead, transactions are directly executed and recorded by the nodes in the network, without any central authority or control. This reduces the transaction costs, risks, and delays associated with intermediaries, and increases the autonomy and empowerment of the participants.
Transparency: Blockchain technology enables full visibility and traceability of the transactions and assets on the ledger. Anyone can access and verify the data on the blockchain, as it is publicly available and immutable. This enhances the accountability and trustworthiness of the participants, and enables auditability and compliance.
Security: Blockchain technology ensures the security and integrity of the data on the ledger by using cryptography and consensus mechanisms. Cryptography is the science of encoding and decoding information using mathematical techniques. Cryptography ensures that only authorized parties can access or modify the data, and that any attempt to do so will be detected and rejected by the network. Consensus mechanisms ensure that the network reaches an agreement on the validity and order of the transactions, and that any malicious or faulty node will be isolated or excluded from the network.
Scalability: Blockchain technology enables scalability and efficiency in processing large volumes of transactions and data across a distributed network. Blockchain technology can leverage parallel processing, peer-to-peer communication, smart contracts, and other techniques to increase the speed, capacity, and performance of the system.
Potential Applications of Blockchain in Angel Syndicates
Blockchain technology can transform angel syndicates in various ways by enhancing their transparency, trust, security, scalability, and efficiency. Here are some of the potential applications of blockchain technology in angel syndicates:
Enhanced transparency and trust in investment processes
Blockchain technology can enable angel syndicates to share information and coordinate actions in a transparent and trustworthy way. For example, blockchain technology can allow angel syndicates to record and track their investment decisions, due diligence reports, term sheets, contracts, cap tables, financial statements, etc. on a shared ledger that is accessible and verifiable by all members. This can reduce information asymmetry or conflicts of interest among the members or between the members and the startups. Moreover, blockchain technology can allow angel syndicates to monitor and evaluate the performance and progress of their portfolio companies in real-time by using smart contracts or oracles (external data sources) to trigger events or actions based on predefined conditions or metrics.
Smart contracts for streamlined syndicate operations
Blockchain technology can enable angel syndicates to use smart contracts to automate and simplify their syndicate operations. Smart contracts are self-executing agreements that are encoded on the blockchain and executed by the network. Smart contracts can enforce the terms and conditions of an agreement without human intervention or intermediation. For example, smart contracts can facilitate the formation and management of an angel syndicate by defining the roles, rights, obligations, fees, etc. of each member. Smart contracts can also facilitate the investment process by automating tasks such as escrow services, fund transfers, equity issuance, dividend distribution, etc.
Tokenization of assets for increased liquidity and fractional ownership
Blockchain technology can enable angel syndicates to tokenize their assets for increased liquidity and fractional ownership. Tokenization is the process of converting an asset into a digital representation (token) that can be stored, transferred, and traded on a blockchain platform. Tokenization can enhance the liquidity and diversification of angel syndicates by allowing them to sell or buy fractional shares of their portfolio companies on secondary markets or exchanges. Tokenization can also lower the barriers to entry and increase the participation of angel syndicates by allowing them to access more investment opportunities with smaller amounts of capital.
Decentralized fundraising platforms and ICOs
Blockchain technology can enable angel syndicates to use decentralized fundraising platforms and ICOs to raise capital for their portfolio companies or themselves. Decentralized fundraising platforms are online platforms that connect startups with investors using blockchain technology and smart contracts. ICOs (initial coin offerings) are a type of crowdfunding where startups issue tokens that represent a share of their project or service in exchange for cryptocurrency or fiat money. Decentralized fundraising platforms and ICOs can offer several advantages for angel syndicates, such as:
Access to a global pool of investors and startups across different sectors and regions
Reduced transaction costs and intermediaries involved in fundraising
Increased transparency and accountability of fundraising activities and outcomes
Enhanced innovation and experimentation with new business models and value propositions
Security and privacy considerations in blockchain adoption
Blockchain technology can also improve the security and privacy of angel syndicates by using cryptography and consensus mechanisms to protect their data and transactions from unauthorized access or manipulation. However, blockchain technology also poses some challenges and risks for security and privacy that need to be addressed before widespread adoption. Some of these challenges are:
Vulnerability to cyberattacks or hacking that may compromise the network or the data
Exposure to regulatory or legal liabilities due to data breaches or non-compliance with data protection laws
Trade-off between transparency and confidentiality of sensitive information or transactions
Ethical and social implications of data ownership and governance on the blockchain
Case Studies and Examples
To illustrate how blockchain technology can transform angel syndicates, let us look at some real-world examples and case studies of blockchain adoption in angel syndicates.
AngelList: AngelList is one of the most popular online platforms that connects startups with investors, including angel syndicates. AngelList has been experimenting with blockchain technology to enhance its platform and services. For example, AngelList has launched CoinList, a spin-off platform that helps startups launch compliant ICOs and token sales. CoinList also offers a secondary market for token trading called CoinList Trade. Moreover, AngelList has partnered with Republic Crypto, another platform that enables retail investors to participate in ICOs through a simple app.
Spice VC: Spice VC is an angel syndicate that focuses on investing in blockchain and digital asset startups. Spice VC has leveraged blockchain technology to tokenize its fund and offer liquidity and fractional ownership to its investors. Spice VC has issued security tokens that represent a share of its portfolio companies and are compliant with securities regulations. Spice VC has also listed its tokens on multiple exchanges, such as OpenFinance and tZERO, to enable secondary trading and price discovery.
Homerun: Homerun is a blockchain-based platform that enables individual investors to form investment clubs, pool capital, and evaluate potential businesses. Our goal is to provide a simple, safe, and transparent way for investors to participate in promising startups and more. With Homerun, investors worldwide can diversify their portfolios and make informed decisions through collaborative voting within their investment clubs.
Blockchain Capital: Blockchain Capital is a venture capital firm that invests in blockchain and cryptocurrency startups. Blockchain Capital has also used blockchain technology to tokenize its fund and raise capital from a wider range of investors. Blockchain Capital has issued BCAP tokens that represent a share of its fund and are backed by real assets. Blockchain Capital has also partnered with Securitize, a platform that provides tokenization and compliance services for security tokens.
Liquefy: Liquefy is a platform that enables angel syndicates and other investors to tokenize their assets and access liquidity and fractional ownership. Liquefy allows investors to create, manage, and trade security tokens that represent their equity or debt in startups or other assets. Liquefy also provides a suite of tools and services for tokenization, such as smart contracts, KYC/AML, custody, etc.
Blockchain technology is a revolutionary innovation that has the potential to transform angel syndicates in various ways by enhancing their transparency, trust, security, scalability, and efficiency. Blockchain technology can enable angel syndicates to share information and coordinate actions in a transparent and trustworthy way, use smart contracts to automate and simplify their syndicate operations, tokenize their assets for increased liquidity and fractional ownership, use decentralized fundraising platforms and ICOs to raise capital for their portfolio companies or themselves and improve their security and privacy by using cryptography and consensus mechanisms.
Blockchain technology is still in its early stages of development and adoption, but it has shown great potential for transforming angel syndicates in various ways. As blockchain technology matures and evolves, we can expect to see more trends and possibilities for blockchain-enabled angel syndicates in the future.
We hope this blog post has given you some insights into how blockchain technology can transform angel syndicates.
(Everything for the founder considering is in just one post)
As a startup founder, you know how challenging it can be to raise funds for your venture. You need to pitch your idea to multiple investors, negotiate terms, and deal with legal paperwork. But what if there was a way to simplify this process and access more capital from a network of experienced investors?
That’s where angel syndicates come in. Angel syndicates are groups of angel investors who pool their money and expertise to invest in promising startups. They are led by a lead investor who sources and vets the deals and then invites other investors to join the syndicate. By joining an angel syndicate, you can benefit from the collective wisdom, network, and resources of multiple investors who share your vision.
But raising money from angel syndicates is not just about getting a check. It’s also about building strong relationships with your investors, who can become your partners, mentors, and advocates. In this article, we will explore why founder-investor relationships are crucial for the success of your startup, and how angel syndicates can help you foster such relationships.
The role of angel syndicates
Angel syndicates are a relatively new phenomenon in the startup ecosystem, but they have been gaining popularity in recent years. According to AngelList, the leading platform for angel syndicates, there are over 2,000 active syndicates on its site, with over $2 billion invested in over 5,000 startups.
But what exactly are angel syndicates, and what do they do? Angel syndicates are essentially a form of crowdfunding for startups. They allow individual investors to invest smaller amounts of money in startups that they otherwise would not have access to or be able to afford. They also allow startups to raise larger amounts of money from a single source, rather than having to deal with multiple investors.
Angel syndicates are typically led by a lead investor, who is usually an experienced angel investor or a prominent figure in the startup community. The leaders are responsible for finding and evaluating potential deals, negotiating terms with the founders, and managing the syndicate. They also charge a fee or a carried interest (a percentage of the profits) for their services.
The lead investor then invites other investors to join the syndicate. These investors are usually accredited investors (individuals who meet certain income or net worth criteria) or institutional investors (such as venture capital funds or family offices). The investors can choose to participate in the syndicate on a deal-by-deal basis or commit to a certain amount of capital for a period of time.
The members of the syndicate share the risk and reward of the investment. They also share the due diligence, feedback, and support that they provide to the founders. By joining an angel syndicate, investors can diversify their portfolio, access high-quality deals, and leverage the expertise and network of the lead investor and other syndicate members. Here are some popular platforms commonly used by Angel Syndicates: AngelList, Homerun, and SyndicateRoom, among others.
Angel syndicates offer many benefits for startups as well. By raising money from an angel syndicate, you can:
Access more capital: It can provide you with more funding than individual investors. For example, according to AngelList data, the average deal size for an angel syndicate is $1.2 million, compared to $300k for an individual angel investor.
Save time and effort: Your fundraising process can be simplified by reducing the number of pitches, meetings, and negotiations that you have to do. You only have to deal with one lead investor who represents the interests of the whole syndicate.
Gain credibility and exposure: Angel syndicates can boost your reputation and visibility in the startup community by associating you with well-known and respected investors. This can help you attract more customers, partners, talent, and media attention.
Receive valuable feedback and support: They can offer you constructive feedback, advice, connections, mentorship, and resources that can help you grow your business.
Building strong founder-investor relationships
While raising money from angel syndicates can be beneficial for your startup, it also comes with certain expectations and responsibilities. As a founder, you need to maintain a good relationship with your investors throughout the lifecycle of your startup. This relationship is based on three key elements: Trust, Alignment, and Support.
Trust and communication
Trust is the foundation of any successful relationship. As a founder, establishing mutual trust with your investors by being honest, transparent, and accountable is crucial. You need to communicate effectively with your investors by keeping them informed of your progress, challenges, and milestones. Besides that, you can listen to their feedback, concerns, and suggestions, and act on them when appropriate.
Effective communication is especially important when you are dealing with a syndicate of investors, rather than a single investor. Let’s ensure that you are communicating consistently and clearly with the lead investor, who is your main point of contact and spokesperson for the syndicate. The key point to get their impression is to respect the preferences and expectations of the other investors in the syndicate, who may have different levels of involvement and interest in your startup.
Some best practices for communicating with your investors include:
Sending regular updates: Send your monthly or quarterly updates to your investors, highlighting your achievements, challenges, metrics, and goals. Other kinds of content can be any major news or events that may affect your startup, such as product launches, customer wins, partnerships, hires, or pivots.
Asking for feedback: You should solicit feedback from your investors on a regular basis, especially when you are facing important decisions or challenges. Let’s be open to receiving feedback, even if it is critical or uncomfortable. You should acknowledge and appreciate the feedback, and explain how you plan to act on it or why you disagree with it.
Scheduling meetings: Schedule regular meetings or calls with your lead investor, as well as occasional meetings or calls with the other investors in the syndicate. These meetings are an opportunity to discuss your progress, challenges, plans, and needs in more detail, and to build rapport and trust with your investors.
Being responsive: Respond promptly and professionally to any inquiries or requests from your investors. You should also proactively reach out to your investors when you need their help or advice, or when you have good news or bad news to share.
Alignment of goals and expectations
Alignment is another key element of a strong founder-investor relationship. As a founder, you need to:
Align your goals and expectations with your investors by identifying shared objectives, managing expectations, and resolving conflicts.
Identify shared objectives with your investors by understanding their motivations, interests, and criteria for investing in your startup, which is to ensure that you and your investors are on the same page about your startup’s vision, mission, and values, as well as the milestones, metrics, and timelines you are aiming for.
Manage expectations with your investors by setting realistic and achievable goals, and by communicating them clearly and frequently. Moreover, you also have to avoid overpromising or underdelivering your results and be prepared to explain any deviations or delays. The best advice here is don’t try to cover or hide anything, you should be transparent about the risks and uncertainties that you are facing, and how you are mitigating them.
Resolve conflicts with your investors by addressing any issues or disagreements that may arise as soon as possible. You need to respect the opinions and perspectives of your investors, even if they differ from yours by listening carefully to their concerns and feedback and trying to find common ground and solutions that work for both parties.
Some best practices for aligning with your investors include:
Sharing your vision: You should share your vision for your startup with your investors, explaining why you are passionate about solving the problem you are addressing, how you are differentiating yourself from the competition, and what impact you want to create in the world.
Defining success: You should define success for your startup with your investors, agreeing on the key performance indicators (KPIs) that you will use to measure your progress and performance, such as revenue, growth, retention, engagement, customer satisfaction, etc.
Setting milestones: You should set milestones for your startup with your investors, outlining the specific goals and deliverables that you want to achieve in each stage of your startup journey, such as product development, customer acquisition, fundraising, etc.
Updating projections: You should update projections for your startup with your investors, revising your assumptions and forecasts based on the latest data and market conditions. You should also communicate any changes or adjustments that you make to your strategy or plans.
Seeking alignment: You should seek alignment with your investors on any major decisions or changes that may affect your startup, such as pivoting, expanding, hiring, firing, partnering, acquiring, etc. You should explain the rationale and benefits of such decisions or changes, and solicit feedback and input from your investors.
Support and mentorship
Support is the final element of a strong founder-investor relationship. As a founder, receiving support and mentorship from your investors by providing guidance and expertise and creating a supportive environment is absolutely crucial.
The fact is that you can provide guidance and expertise to your investors by leveraging their knowledge, experience, and network to help you grow your business. You need to seek advice and feedback from your investors on various aspects of your startup, such as product development, customer acquisition, marketing, sales, operations, finance, legal, etc. From that, you are able to tap into their network of contacts to access potential customers, partners, talent, media, or other investors.
Moreover, you need to create a supportive environment with your investors by fostering a positive and respectful relationship. You need to appreciate and acknowledge their contributions and express gratitude and recognition for their support. Besides, you can share your successes and challenges with them and celebrate your achievements and milestones together.
Some best practices for receiving support and mentorship from your investors include:
Asking for help: Don’t hesitate to ask for help from your investors when you need it. You should be specific about what kind of help you need, such as introductions, referrals, feedback, advice, resources, etc. You should also be respectful of their time and availability, and follow up with them on the outcomes of their help.
Seeking mentorship: Let’s seek mentorship from your investors who have relevant expertise or experience in your field or industry. Asking them for guidance and insights on how to overcome challenges, improve their skills, or grow their business. You should also be open to learning from their mistakes and successes, and apply their lessons to your own situation.
Building rapport: By showing interest in them as individuals, not just as sources of funding, you can learn about their backgrounds, interests, goals, and passions. To be fair, you should also share some personal information about yourself, such as your hobbies, values, or aspirations. Then trying to find common ground and points of connection with them, such as shared experiences, interests, or values.
Giving feedback: Just be honest and constructive in your feedback, and focus on the positive aspects as well as the areas of improvement. You also can be receptive to the feedback that they give you, and show that you value their opinions and suggestions.
In conclusion, building strong founder-investor relationships is vital for the success of your startup. By raising money from angel syndicates, you can access more capital, save time and effort, gain credibility and exposure, and receive valuable feedback and support from a network of experienced investors who share your vision.
By building strong founder-investor relationships with angel syndicates, you can increase your chances of achieving your startup goals, and create lasting value for yourself, your investors, and the world.
If you’re a founder looking for early-stage funding, you might have heard of angel syndicates. They are an informal group of individuals who source and invest in startups together. They leverage special-purpose vehicles (SPVs) to invest as a single entity.
Angel syndicates can offer many benefits for founders, such as access to top deals, diverse expertise, network effects, and flexible terms. However, pitching to angel syndicates can also be challenging and competitive. You need to impress and persuade a group of investors who have different backgrounds, interests, and goals.
How can you stand out and secure funding from angel syndicates? In this blog post, we’ll share some tips on how to prepare and deliver a compelling pitch that will win over angel syndicates. By the end of this post, you’ll have a better understanding of how to pitch to angel syndicates and how to leverage them for your startup’s success.
What Startups should do for a successful pitching
Understanding Angel Syndicates
Before diving into the pitching process, it’s essential to understand what angel syndicates are and the benefits they offer. Angel syndicates act as a single entity, with a lead investor evaluating investment opportunities and inviting other syndicate members to participate. By leveraging the collective resources and expertise of the syndicate, startups can access larger funding amounts and tap into a network of experienced investors.
There are several platforms and resources available to connect and support Angel Syndicates in their management and operations, making it easier to find high-quality lead investors. These platforms offer a variety of services and tools that streamline the investment process and foster collaboration among syndicate members. Here are some popular platforms commonly used by Angel Syndicates: AngelList, Homerun, and SyndicateRoom, among others. These platforms provide a seamless experience for syndicates, allowing them to efficiently manage investments and find suitable investors for their ventures.
Research and Preparation
Thorough research is key when targeting angel syndicates. Start by understanding the syndicate’s investment preferences, focus areas, and past investments. Tailor your pitch to align with their interests and demonstrate a clear understanding of their investment thesis. Researching individual syndicate members can also provide valuable insights and help you personalize your pitch to their specific areas of expertise.
Crafting a Compelling Pitch
A compelling pitch is crucial for capturing the attention of angel syndicates. Start with a strong hook that immediately grabs their interest. Clearly articulate the problem your product or service solves and the market opportunity it addresses. Present a well-defined and realistic business model, showcasing your revenue potential and growth strategies. Emphasize your unique selling points and competitive advantages. Back your pitch with a clear and concise financial plan, including revenue projections, funding requirements, and potential exit strategies.
Building Credibility and Trust
Investors want to see a credible and trustworthy team. Highlight the credentials and track record of your team members, showcasing their relevant experience and expertise. Provide evidence of any existing traction, such as customer testimonials, partnerships, or early sales. Social proof, such as endorsements from industry experts or successful entrepreneurs, can further enhance your credibility. If you have any relevant intellectual property or proprietary technology, be sure to share that as well.
Communicating the Investment Opportunity:
Clearly communicate the funding requirements and the purpose of the investment. Outline the potential return on investment and the investor’s exit strategy. Address any potential risks and demonstrate how you plan to mitigate them. Transparency is crucial, so express your commitment to ongoing communication and updates with investors.
Presenting with Confidence and Conviction:
When pitching to angel syndicates, it’s essential to deliver a polished and well-rehearsed presentation. Demonstrate passion and enthusiasm for your business, as this can be infectious and make a lasting impression. Be open to feedback and engage in a constructive dialogue with the syndicate members, showcasing your ability to adapt and learn.
Following Up and Nurturing Relationships:
After your pitch, send a personalized thank-you note to the syndicate members. Follow up promptly with any additional information or requested documents. Keep the syndicate updated on the progress of your startup, maintaining regular communication. Building long-term relationships with syndicate members can open doors for potential future funding rounds.
Challenges of pitching to angel syndicates
Pitching to angel syndicates can be a nerve-wracking experience for many founders. However, it is also an essential step in securing the funding needed to grow and scale your business. Here are some of the challenges or difficulties that you may face when pitching to angel syndicates:
Finding the right lead investor: Finding a lead investor who is reputable, experienced, and trustworthy can be challenging for both founders and investors. The lead investor plays a crucial role in sourcing, screening, negotiating, and managing the deals, as well as representing the interests of the syndicate members. Therefore, it is crucial to do thorough research and due diligence on the lead investor before joining or raising from an angel syndicate.
Preparing a compelling pitch deck: Showcases your business idea, market opportunity, financial projections, and the team can be challenging for founders. You need to tailor your pitch deck to the specific interests and goals of the angel syndicate. You also need to make sure your pitch deck is clear, concise, and convincing.
Passing the screening process: This determines if your startup is a good fit for the angel syndicate’s investment portfolio can be challenging for founders. You need to demonstrate that your startup has traction, validation, differentiation, scalability, and potential. You also need to be prepared to answer questions and provide additional information as needed.
Doing due diligence: Doing due diligence on the angel syndicate’s terms and conditions can be challenging for founders. You need to understand and negotiate various aspects of the deal, such as valuation, equity stake, board seats, voting rights, etc. You also need to consult with legal professionals and experts before signing any agreements.
Waiting for the investment decision: You need to be patient and respectful while waiting for the decision. You also need to follow up and communicate effectively with the lead investor and the other members of the group.
Tips for standing out and securing funding
Standing out and securing funding from angel syndicates can be rewarding and beneficial for founders. Here are some tips on how to impress and persuade angel syndicates to invest in your startup:
Do thorough research on the syndicate members: Before pitching to an angel syndicate, do thorough research on the lead investor and the other members of the group. Check their backgrounds, track records, reputations, portfolios, networks, etc. Ask for references and testimonials from other founders or investors who have worked with them. Make sure they share your vision, values, goals, and expectations.
Tailor your pitch to their interests and goals: When preparing your pitch deck, tailor it to the specific interests and objectives of the angel syndicate. Highlight how your startup aligns with its investment thesis, criteria, and preferences. Show how your startup can solve its pain points or fulfill its needs. Use relevant data, examples, and stories to support your claims.
Demonstrate traction and validation: When pitching to an angel syndicate, show them that your startup has traction and validation in the market. Provide evidence of your customer base, revenue growth, user engagement, feedback, etc. Show them that you have a product-market fit and a clear value proposition. Explain how you measure and improve your key performance indicators (KPIs).
Showcase your team and culture: When pitching to an angel syndicate, showcase your team and culture. Introduce your co-founders and key employees, and highlight their skills, experience, and achievements. Explain how you work together, communicate, and collaborate. Demonstrate your passion, commitment, and resilience. Show them that you have a strong and diverse team that can execute your vision and overcome challenges.
Follow up and communicate effectively: After pitching to an angel syndicate, follow up and communicate effectively with the lead investor and the other members of the group. Thank them for their time and attention. Provide any additional information or clarification they may request. Keep them updated on your progress and achievements. Be responsive, respectful, and professional.
Pitching to angel syndicates can be a powerful way to raise capital for your early-stage startup. However, it can also be challenging and competitive. You need to prepare and deliver a compelling pitch that will win over a group of investors who have different backgrounds, interests, and goals.
Theo báo cáo từ ‘Southeast Asia Ecosystem 2.0’, Việt Nam đang được đánh giá là một trong những điểm đến hấp dẫn nhất đối với các quỹ đầu tư mạo hiểm tại khu vực Đông Nam Á. Hệ sinh thái khởi nghiệp tại Việt Nam đang phát triển không ngừng, và để hỗ trợ cộng đồng khởi nghiệp trong nước, Wiziin vinh dự được giới thiệu cuốn sách “Chiến lược huy động vốn mạo hiểm – Dành cho nhà khởi nghiệp nghiêm túc”, một trong những cuốn sách đầu tư mạo hiểm được đánh giá cao hàng đầu trên thế giới.
Cuốn sách được dịch bởi Tiến Nguyễn, General Partner của Earth Venture Capital, một quỹ đầu tư mạo hiểm tập trung vào công nghệ chống biến đổi khí hậu. Anh cũng là nhà sáng lập Wiziin Inc. và đã có nhiều kinh nghiệm làm việc cùng Dermot Berkery trong nhiều thương vụ.
Kết luận là…
Đây là cuốn sách gói tất cả những chắt lọc quý giá nhất từ trải nghiệm của các nhà đầu tư mạo hiểm. Nó không chỉ mang lại kiến thức cho các startup về khởi nghiệp, mà còn giúp bạn hiểu rõ hơn về quá trình cũng như góc nhìn của một nhà đầu tư. Wiziin rất vinh dự được đóng góp vào việc đưa cuốn sách này đến mọi người, vì chúng tôi tin rằng nó sẽ mang lại kiến thức và kỹ năng bổ ích cho những nhà khởi nghiệp nghiêm túc và những người quan tâm đến lĩnh vực khởi nghiệp và gọi vốn mạo hiểm.
Không những vậy, cuốn sách này cũng là một nguồn cảm hứng và tham khảo cho những nhà quản lý quỹ mạo hiểm và nhà hoạch định chính sách. Nó cung cấp nhiều kiến thức căn bản về việc chuẩn bị huy động vốn, xây dựng mối quan hệ với nhà đầu tư, định giá startup và đàm phán term sheet với các quỹ đầu tư.
Cụ thể thì “Chiến lược huy động vốn mạo hiểm” có gì?
Để cung cấp một cái nhìn tổng quan và sâu sắc về chiến lược gọi vốn mạo hiểm, cũng như những kỹ năng thực tế để áp dụng trong việc khởi nghiệp và tạo ra sự thành công trong việc huy động vốn mạo hiểm, Dermot đã chia cuốn sách thành năm phần, đi từ việc lên kế hoạch, hoạch định và phát triển startup cho đến các vấn đề trong đàm phán với VC, những điều nhất định startup cần lưu ý:
Phần 1: Nền tảng của phương pháp Đầu tư mạo hiểm
Phần đầu sách tập trung vào việc chuẩn bị huy động vốn và giới thiệu nhiều khái niệm quan trọng. Cuốn sách trình bày cách xác định các cột mốc (stepping-stones) mà doanh nghiệp có thể và sẽ đạt được nhờ vào nguồn vốn đầu tư. Tác giả Dermot Berkery chỉ ra cách các nhà đầu tư mạo hiểm thường đầu tư theo từng giai đoạn và tin rằng doanh nghiệp sẽ đạt được những mục tiêu cụ thể cho từng giai đoạn đầu tư. Cuốn sách cũng giải thích về khái niệm J-curves và những điểm đỉnh mà doanh nghiệp cần đạt được, điều mà nhiều doanh nghiệp chưa biết đến và cần xem xét.
Phần 2: Huy động nguồn tài chính
Phần này tập trung vào quá trình huy động vốn, bao gồm việc xác định số tiền cần thiết cho doanh nghiệp và cách viết một kế hoạch kinh doanh thuyết phục. Cuốn sách cũng giới thiệu cấu trúc của các quỹ đầu tư mạo hiểm, nguồn vốn của các quỹ đầu tư này và cách chúng thu lợi từ nhà đầu tư và các quỹ này. Phần này cung cấp thông tin quan trọng cho các chủ doanh nghiệp, giúp họ hiểu rõ hoạt động của các quỹ đầu tư trước khi tiếp cận nguồn vốn tiềm năng.
Phần 3: Định giá Startup
Phần này trả lời những câu hỏi phổ biến về việc định giá doanh nghiệp trước khi huy động vốn. Cuốn sách giải thích tại sao các phương pháp định giá truyền thống không hữu dụng và đề xuất cách tối đa hóa giá trị của một công ty. Đây là thông tin hữu ích đối với các chủ doanh nghiệp muốn huy động vốn hoặc đơn giản là muốn bán công ty trong tương lai.
Phần 4: Đàm phán đầu tư Startup: Term Sheet
Phần này giải thích cẩn thận về quy trình đàm phán các điều khoản đầu tư, bao gồm cả thuật ngữ phức tạp thường xuất hiện trong các bản term sheet. Cuốn sách cung cấp nhiều thông tin về cách phân bổ quyền kiểm soát giữa lãnh đạo công ty và nhà đầu tư, cũng như cách cân bằng quyền lợi của cả hai bên qua các công cụ như “option pools”, “founder stock” và các thỏa thuận khác.
Phần 5: Bài tập
Cuối cùng, phần này cung cấp các bài tập thực hành về các điều khoản đầu tư. Đây là tài liệu hữu ích cho các quản lý chưa từng tiếp xúc với các điều khoản đầu tư, giúp họ tìm cách đạt được nhiều quyền điều hành nhất có thể khi làm việc với nhà đầu tư. Phần này bao gồm nhiều tình huống thực tế với các điều khoản đại diện cho doanh nghiệp, và độc giả phải trả lời câu hỏi trong sách để hiểu rõ tình huống, mục tiêu của các bên đàm phán và những điều khoản cần được thỏa thuận.
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Hiện tại, bạn có thể đặt trước cuốn sách tại trang web https://www.goivonvc.com/ với những ưu đãi đặc biệt tới ngày 20/6/2023 như:
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Ngoài ra, trong thời gian tới, sẽ có các sự kiện ký tặng sách và gặp gỡ tác giả diễn ra, mang đến cơ hội giao lưu và trò chuyện trực tiếp với Dermot Berkery. Đây là dịp tuyệt vời để trải nghiệm cuốn sách và nghe tác giả chia sẻ về động lực cũng như insight về tác phẩm này. Hãy theo dõi fanpage của Wiziin tại https://www.facebook.com/WiziinInc để cập nhật thông tin nhanh nhất.
You have a great idea for a startup. You have a talented team, a working prototype, and some initial traction. But you need more funding to take your venture to the next level.
Where do you turn?
You could try to pitch to traditional venture capitalists, but they are hard to reach, slow to decide, and often demand too much control. You could try to bootstrap your way to profitability, but that could take too long and limit your growth potential.
Or you could try to raise money from angel syndicates.
Angel syndicates are groups of individual investors who pool their money and expertise to invest in promising startups. They offer many benefits, such as:
More capital and resources than you could get from a single investor
Valuable feedback and mentorship from experienced investors
Exposure and credibility in the startup community
Support and guidance in your chosen sector or industry
But don’t take our word for it. Here are three real-life examples of startups that raised millions from angel syndicates and achieved massive success.
You have probably heard of Uber, Airbnb, and Slack. These startups are among the world’s most successful and groundbreaking. They boast millions of users and customers across hundreds of countries. With valuations reaching billions of dollars, many of them have already gone public or have imminent plans to do so.
But did you know that these startups were once funded by angel syndicates?
Angel syndicates are groups of individual investors who pool their money and expertise to invest in promising startups. They can offer more than just cash. They can also provide valuable advice, connections, and credibility.
In this post, you will learn how three angel syndicates made huge returns from backing Uber, Airbnb, and Slack in their early stages.
Uber: The Ride-Hailing Giant
Uber is the world’s leading ride-hailing platform. It operates in over 60 countries and has over 75 million riders and 3 million drivers. But before it became a global phenomenon, Uber was just a small startup with a big vision: to make transportation as reliable as running water.
In 2010, Uber was a budding startup with a disruptive vision to revolutionize the transportation industry by providing a reliable and convenient ride-hailing service. However, to realize its ambitious goals, Uber required substantial funding. It turned to angel syndicates, specifically First Round Capital’s AngelList syndicate led by Rob Hayes, for financial support.
Angel Syndicate Investment:
Uber successfully raised $1.25 million from First Round Capital’s AngelList syndicate, with over 40 individual investors contributing as little as $5,000 each. This investment marked one of the earliest and most successful examples of online syndicate investing.
Benefits for Uber:
Access to Capital: The angel syndicate provided Uber with access to a significant pool of capital, enabling the company to fuel its expansion plans, develop its technology platform, and grow its user base.
Network and Expertise: The syndicate’s investors brought valuable expertise and connections to the table, helping Uber in areas such as business strategy, marketing, and scaling operations. The network of influential investors also helped raise awareness and generate buzz around Uber’s service.
Credibility and Validation: Securing funding from a reputable angel syndicate lent credibility and validation to Uber’s business model, strengthening its position in the competitive ride-hailing market and attracting further investor interest.
Returns for the Syndicate:
The angel syndicate’s investment in Uber proved to be highly lucrative. The syndicate’s investors realized substantial returns on their initial investment, highlighting the potential for significant financial gains through early-stage syndicate investing.
Uber’s experience with angel syndicates exemplifies the pivotal role such syndicates can play in the success of early-stage startups. The syndicate’s investment provided Uber with the necessary capital, expertise, and network to propel its growth and establish itself as a dominant player in the ride-hailing industry. Simultaneously, the angel syndicate’s investors enjoyed substantial returns on their investment, showcasing the potential for financial rewards through early-stage syndicate investing.
Airbnb is the world’s leading home rental platform. It allows people to rent out their homes or rooms to travelers around the world. With listings in over 100,000 cities across 220 countries and regions, Airbnb has revolutionized the way people travel and experience destinations. It is valued at over $30 billion and is expected to go public soon. But before it became a household name, Airbnb was just a scrappy startup with a crazy idea: to let strangers sleep in your home.
Airbnb is a global home-sharing and travel accommodation marketplace that has revolutionized the way people travel and experience destinations. Before becoming a household name and achieving massive success, Airbnb started as a small startup with the bold idea of connecting travelers with local hosts willing to rent out their homes or rooms. To transform this idea into reality, Airbnb required funding, which it found through angel syndicates. This case study explores Airbnb’s journey of securing funding from angel syndicates and the impact it had on the company’s growth and success.
The Angel Syndicate Investment:
In 2009, Airbnb was facing the challenge of expanding its platform and reaching a wider audience. To fuel its growth and innovation, the company needed capital investment. Angel syndicates provided an opportunity for Airbnb to secure the necessary funds and gain access to a network of experienced investors.
Airbnb raised $600,000 in seed funding from Sequoia Capital and Y Combinator in 2009. Greg McAdoo, a partner at Sequoia Capital, led the investment in Airbnb. The syndicate consisted of over 20 individual investors who believed in Airbnb’s potential and contributed varying amounts, with minimum investments as low as $25,000. This funding round was one of the earliest and most successful examples of online syndicate investing, setting a precedent for future investments in the sharing economy sector.
Benefits of Angel Syndicate Investment:
Capital Infusion: The investment from the angel syndicate provided Airbnb with a significant capital infusion, enabling the company to invest in technology development, marketing efforts, and expansion into new markets.
Network and Expertise: Apart from financial resources, the syndicate investors brought valuable industry expertise, connections, and guidance to Airbnb. They played an active role in shaping the company’s product, market strategy, and growth trajectory.
Credibility and Validation: The participation of reputable investors in the syndicate lent credibility and validation to Airbnb’s business model, attracting attention from other potential investors and stakeholders.
Returns for the Syndicate:
The venture capital investment in Airbnb turned out to be highly lucrative for Sequoia Capital. As Airbnb gained momentum and grew into a global phenomenon, the firm experienced significant returns on their initial investment, showcasing the potential for substantial financial gains through early-stage venture capital funding.
The Airbnb case exemplifies the critical role that venture capital plays in the success of startups. The partnership with Sequoia Capital provided Airbnb with the necessary resources, expertise, and industry connections to establish itself as a dominant player in the home rental industry. Simultaneously, Sequoia Capital enjoyed substantial returns on their investment, highlighting the potential for rewarding outcomes through strategic venture capital funding.
Learn more:Chesky, B., Gebbia, J., & Blecharczyk, N. (2020). “The Airbnb Story: How Three Ordinary Guys Disrupted an Industry, Made Billions…and Created Plenty of Controversy.” Houghton Mifflin Harcourt.
Slack: The Workplace Collaboration Platform
The Workplace Collaboration Platform Slack is a leading workplace collaboration platform that enables teams to communicate, collaborate, and streamline their work processes. With its user-friendly interface and diverse set of features, Slack has transformed the way organizations operate and has become an essential tool for modern workplaces.
In its early days, Slack started as a small startup with a mission to revolutionize internal communication within companies. To turn this vision into reality and expand their platform, Slack needed capital investment from experienced investors who understood their potential.
Angel Syndicate Investment:
Slack successfully raised $600,000 through an angel syndicate led by Greg McAdoo from Sequoia Capital’s AngelList syndicate. This syndicate consisted of over 20 individual investors who believed in Slack’s vision and contributed varying amounts, with minimum investments as low as $25,000. This funding round was one of the earliest and most successful examples of online syndicate investing, setting a precedent for future investments in the sharing economy sector.
Benefits for Slack:
Capital Accessibility: The angel syndicate investment enabled Slack to access capital that would have otherwise been difficult to obtain for a young startup. This financial infusion allowed them to allocate funds towards product development, expand their engineering team, and enhance the platform’s functionality. With increased resources, Slack was able to attract a larger user base and improve the overall user experience. As a result, Slack grew rapidly and reached 1.1 million daily active users by 20152.
Expertise Acquisition: The angel syndicate investment also provided Slack with access to experienced investors who possessed extensive knowledge of the technology industry and the workplace collaboration market. These seasoned investors offered valuable mentorship, feedback, and connections, helping Slack in refining its product roadmap, identifying target customer segments, and navigating competitive challenges. For example, Marc Andreessen of Andreessen Horowitz helped Slack with its pricing strategy and product positioning3.
Network Expansion: The angel syndicate investment facilitated Slack’s expansion of its network, connecting them with potential partners, clients, and supporters who could contribute to the company’s growth. The association with reputable investor groups like Sequoia Capital’s AngelList syndicate added credibility and validation to Slack’s business model, fostering trust among users and propelling the company’s growth. For instance, Slack was able to partner with Google Cloud Platform to offer integrations with Google services such as Gmail and Google Drive.
The angel syndicate investment was a smart move for Slack, as it helped them leverage the expertise, network, and capital of their investors to grow their business and achieve product-market fit. By 2019, Slack had over 10 million daily active users and went public with a valuation of $23 billion.
Returns for the Angel Syndicate:
The angel syndicate investment in Slack proved to be highly profitable for the individual investors who participated in it. As Slack gained widespread adoption and became a dominant player in the workplace collaboration market, the investors experienced substantial returns on their initial investment, showcasing the potential for significant financial gains through early-stage angel syndicate funding.
The venture capital investment in Slack proved to be highly profitable for Andreessen Horowitz. As Slack gained widespread adoption and became a dominant player in the workplace collaboration market, the firm experienced substantial returns on their initial investment, showcasing the potential for significant financial gains through early-stage venture capital funding.
The case of Slack demonstrates the crucial role that venture capital plays in the success of startups. The partnership with Andreessen Horowitz provided Slack with the necessary resources, expertise, and industry connections to establish itself as a leader in workplace collaboration. Simultaneously, Andreessen Horowitz enjoyed significant returns on their investment, highlighting the potential for rewarding outcomes through strategic venture capital funding.
– Butterfield, S. (2018). “Slack: Getting Past Burnout Culture.” Harvard Business School Case, 9-418-030.
– Duhigg, C. (2016). “What Google Learned from Its Quest to Build the Perfect Team.” The New York Times Magazine.
Angel syndicates are a great way to fund your startup dream if you are looking for more than just money. They can provide you with support, guidance, network, and validation that can boost your chances of success.
However, they are not for everyone. You need to be prepared for the challenges and limitations that come with working with multiple investors who may have different agendas and expectations.
The “Navigating the Fundraising Landscape” event was held with great success, providing valuable insights and practical guidance for founders and investors in Vietnam. Organized by Carta and Wiziin, the event aimed to equip participants with the necessary knowledge to navigate the ever-changing fundraising landscape.
The event began with an opening and warm welcome, setting the tone for an engaging and informative session. The past year was acknowledged as a period of significant transformation in the fundraising landscape, making it crucial for founders in Vietnam to understand and navigate the unpredictable nature of the current environment.
Carta, an ownership and equity management platform, delivered a keynote presentation that shed light on the current fundraising landscape. Ms. Vanessa Chin, a Senior Executive from Carta, provided valuable insights, data, and practical tips to navigate the fundraising journey successfully.
Following the keynote presentation, a fireside chat took place with Ms. Vanessa Chin as the moderator. The chat focused on discussing the current state of fundraising and sharing panelists’ experiences, and strategies for success. The esteemed panelists included Mr. Tien Nguyen, Co-Founder & CEO of Wiziin, and Mr. Eddie Lee, Co-Founder & CEO of Pilon. Their diverse backgrounds and expertise added depth to the discussion.
During the fireside chat, various aspects of fundraising were covered. The first part examined the global and Southeast Asian fundraising landscape, highlighting the surge in fundraising activity and the challenges faced by startups and investors alike. Mr. Tien Nguyen shared his insights into the unique characteristics and opportunities defining fundraising in the Southeast Asian market, while Mr. Eddie Lee provided his perspective on the changing funding landscape in the region.
The second part of the fireside chat delved into the role of founders in the current fundraising landscape. Mr. Tien Nguyen offered valuable insights into the factors venture capitalists consider when evaluating and selecting potential investments. He emphasized the need for founders to align their strategies to attract venture capital. Mr. Eddie Lee shared critical lessons he learned from his entrepreneurial journey, offering practical advice to fellow founders.
In the final part of the fireside chat, the focus shifted to startup capital utilization. Mr. Tien Nguyen highlighted common pitfalls that founders should be aware of when managing and allocating their startup capital, along with strategies to optimize its usage for maximum impact. Mr. Eddie Lee shared practical tips and best practices based on his own entrepreneurial experiences, aiming to help founders make the most out of their available capital and drive sustainable growth.
The event concluded with a Q&A session, allowing participants to seek further clarification and guidance on fundraising-related topics. The speakers’ expertise and perspectives gave the audience a deeper understanding of navigating the fundraising landscape.
A closing remark expressed gratitude to the speakers, partners, and sponsors for their support in making the event a success. We did take a group photo to capture the memorable moment, and attendees were invited to stay for a networking opportunity. This offered a chance to connect with fellow founders and investors, fostering knowledge sharing and collaboration.
Overall, the “Navigating the Fundraising Landscape” event was a valuable platform that provided practical insights and actionable advice for founders and investors in Vietnam. It equipped attendees with the necessary knowledge and strategies to successfully navigate the fundraising landscape and achieve their fundraising goals.
Thanks to our speakers and attendees for attending the event and for your valuable contribution. It was our pleasure to see you at the event, and we are hoping that it gave you an insight into the fundraising landscape.
You have a brilliant idea for a startup. You know it can change the world. But you need money to make it happen.
Where do you get it?
You could try to pitch to venture capitalists, but they are hard to impress and often demand too much equity. You could try to bootstrap, but that can limit your growth and put a strain on your personal finances.
There is another option: Angel syndicates.
Angel syndicates are groups of individual investors who pool their money and expertise to back promising startups. They are like your own personal cheerleaders who want you to succeed.
In this post, you will learn How Angel Syndicates Can Help You Fund Your Startup Dream.
What Are Angel Syndicates and How Do They Work?
Angel syndicates are formed by like-minded people who share a passion for entrepreneurship and innovation. They usually have a specific focus or industry preference, such as biotech, fintech, or social impact. Each syndicate has a lead investor or a syndicate manager who scouts for potential deals, conducts due diligence, negotiates terms, and manages the investment process. The other members of the syndicate can choose to participate in the deals that interest them and contribute their capital accordingly.
Angel syndicates typically invest between $50,000 and $500,000 in early-stage startups, depending on the size and stage of the company. They often co-invest with other syndicates or investors to form larger rounds.
The Benefits of Getting Funded by Angel Syndicates
Getting funded by angel syndicates can offer you several advantages as a startup founder:
Diversify your risk by getting multiple investors on board. This way, you don’t have to rely on one source of funding and you can balance potential losses with successful exits. For example, Spoti Angels, a Berlin-based angel syndicate founded by three Spotify alums, invests between €25,000-150,000 in European pre-seed and seed stage startups in consumer tech, the creator economy, and the future of work1. By pooling their capital, they can spread their investments across multiple startups and increase their chances of finding a winner.
Access the expertise and network of the syndicate members. They can offer you valuable advice, feedback, mentorship, and connections that can help you grow your business faster and smarter. For example, Operator Exchange, a group of 40 founders and operators from across Europe, says they “want to be the investor that we would go to for funding. They invest individually up to €50,000, or €500,000 together as a syndicate — and aim to get back to the startups that reach out to them within a week. They also share their knowledge and network with the startups they back.
Increase your credibility and validation in the market. Getting backed by an angel syndicate can signal that your startup has potential and attract more interest from other investors, customers, and partners. For instance, SB21, a group of 15 internet and tech entrepreneurs and angel investors who have all built successful companies which have either been sold or publicly listed1, invests in startups individually or as a syndicate. Among their portfolio startups are Adelee, Origin, and Stark1, which have all raised follow-on funding from other investors after getting backed by SB21.
The Challenges and Limitations of Angel Syndicates
Getting funded by angel syndicates is not without its challenges and limitations. Here are some of the things you need to be aware of:
Face conflicts of interest within the syndicate dynamics. Different investors may have different opinions and expectations about your startup’s direction, strategy, or performance. You need to communicate clearly, transparently, and respectfully with your investors and ensure that everyone is aligned on the same vision and goals. Otherwise, you may end up with conflicting advice, pressure, or interference from your investors. For example, some investors may want you to focus on growth, while others may want you to focus on profitability. Some investors may want you to pivot, while others may want you to stick to your original plan. Some investors may want you to raise more money, while others may want you to bootstrap.
Lose some control and decision-making power over your startup. As part of the deal, you may have to give up some equity and board seats to the syndicate members. You need to be comfortable with sharing your authority and trust the judgment of your investors. Otherwise, you may feel resentful, frustrated, or micromanaged by your investors. For example, some investors may have veto rights over certain decisions, such as hiring, firing, spending, or partnering. Some investors may have information rights that require you to share detailed reports and updates on your progress. Some investors may have liquidation preferences that give them priority over other shareholders in case of an exit.
Limit availability of syndicate opportunities. Not all startups may fit the criteria or preferences of the existing syndicates. You may also face stiff competition from other startups for the limited slots available. You need to do your research and find the right fit for your startup. Otherwise, you may waste time and energy chasing the wrong investors or miss out on better opportunities. For example, some syndicates may have a specific investment focus or industry preference that does not match your startup’s domain or stage. Some syndicates may have a limited number of investment slots or a high bar for entry that makes it hard for you to get in.
How to Find and Approach Angel Syndicates
If you think angel syndicates are a good option for your startup funding needs, here are some tips on how to find and approach them:
Do your homework. Before you approach any syndicate, you need to do some research to find the best match for your startup. There are some famous online platforms like AngelList or SeedInvest, or ask your network for referrals. In addition, you should look for syndicates that have a relevant investment focus, criteria, portfolio, track record, reputation, and contact information. Learn about their investment process, preferences, and expectations. This will help you tailor your pitch and increase your chances of getting funded.
Build relationships. Once you have identified some potential syndicates, you need to reach out to them and start building rapport. You can contact the lead investors or syndicate managers via email, social media, or phone. You should introduce yourself and your startup briefly and politely. You should express your interest in their syndicate and ask for their feedback or advice on your idea or market. Moreover, trying to provide some value to them, such as sharing relevant insights, articles, or introductions are also necessary. You should aim to establish trust and credibility with them and show them that you are serious and committed.
Pitch your value proposition. If you get a positive response from a syndicate member, you need to prepare a compelling pitch deck that showcases your value proposition. Your pitch deck should include the following elements: the problem you are solving, the solution you are offering, the market opportunity and size, the traction you have achieved so far, the team behind your startup, the competitive advantage you have over others, the financials and projections of your startup, and the ask (how much money you are raising and what you will use it for). Remember that you are better ready to answer any questions they may have about your startup.
Follow up and close the deal. After pitching your startup, you need to follow up with the syndicate member regularly until you get a clear yes or no answer. Let’s keep them updated on your progress and milestones, and address any concerns or objections they may have. You should also ask for feedback or referrals from them if they are not interested in investing. If you get an offer from them, you should review the terms carefully and negotiate if needed. You absolutely need to consult with your lawyer and other advisors before signing any documents. If you agree to the terms, close the deal as soon as possible and celebrate.
Angel syndicates are a great way to fund your startup dream if you are looking for more than just money. They can provide you with support, guidance, network, and validation that can boost your chances of success.
However, they are not for everyone. You need to be prepared for the challenges and limitations that come with working with multiple investors who may have different agendas and expectations.
When it comes to investing in startups and emerging businesses, two primary options exist: Angel Syndicates and Venture Capital. Angel Syndicates comprise high-net-worth individuals who pool their resources to invest in startups. Conversely, Venture Capital firms are institutional investors that invest substantial amounts of money in established startups.
Choosing the right investment type is crucial for both investors and entrepreneurs. It’s important to consider the level of control, ownership, and financial returns that each investment type offers. Angel Syndicates may offer more flexibility and personal touch, while Venture Capital firms may provide more extensive resources and support.
This article provides a definition of Angel Syndicates and Venture Capital and emphasizes the significance of selecting the appropriate investment type. The comparison between the two investment types, including differences in investment size and structure, investor involvement, risk and return, and factors to consider when choosing between the two, is also outlined.
What is Angel Syndicates?
Angel Syndicates are groups of high-net-worth individuals who come together to invest in startups. Here are some essential characteristics of Angel Syndicates:
Angel Syndicates generally invest in earlier-stage startups, providing seed funding to help these companies get off the ground. However, some larger syndicates may also invest in later-stage startups.
The syndicates are usually made up of high-net-worth individuals who invest smaller amounts of money compared to Venture Capital firms. However, the total amount invested by a syndicate can be more significant than that of a VC firm in some cases.
Angel investors often provide guidance and expertise to the startups they invest in, which can be highly valuable for entrepreneurs who are just starting.
Advantages and Disadvantages of Angel Syndicates
On the one hand, Angel Syndicates offer more flexibility and can provide a more personal touch when working with startups. They are often more willing to take risks and invest in companies that may not have established traction yet. However, the investment amounts may be limited, and the risks can be higher. Angel Syndicates may not have the same level of resources and support that Venture Capital firms can provide.
Here are some examples of successful angel syndicate investments and the key players involved. Chris Sacca, an angel investor, played a significant role in Uber’s early growth, and today the ride-hailing company is a household name. Dropbox, a widely used cloud storage platform, received seed funding from angel investors including Sequoia Capital and Accel Partners. In the case of Reddit, a group of angel investors such as Paul Graham and Alexis Ohanian provided seed funding for the development of the site, which has since become one of the most popular social news aggregators on the web.
What is Venture Capital?
Venture Capital is a form of private equity financing primarily offered to early-stage startups and emerging businesses. Here are some of Venture Capital’s key features:
Venture Capital firms typically invest larger amounts of money compared to Angel Syndicates, offering funds to startups that have already established a certain level of traction.
They offer more extensive resources and support to their portfolio companies, such as access to industry expertise, mentorship, and networks of contacts.
Venture Capital firms play an active role in the management and decision-making of their portfolio companies.
Pros and Cons of Venture Capital
Venture Capital firms offer more substantial financial backing and access to a wider range of resources and support. They can help entrepreneurs to scale their businesses more quickly. Otherwise, VCs also tend to be more risk-averse and may be less willing to invest in companies that haven’t already established some level of traction. They may also take a more hands-on approach to management, which can limit the autonomy of the startup.
There are several examples of successful venture capital investments. Accel Partners was an early investor in Facebook, providing seed funding for the social media platform’s early growth. Sequoia Capital and Greylock Partners provided seed funding for Airbnb, which has since become a global leader in the short-term rental market. Another is that Founders Fund provided funding for SpaceX, which has since become one of the most successful private space exploration companies in the world.
Which one is right for your Startup?
According to Bo Ren, was a director of Early-Stage Startups at Silicon Valley Bank in New York City. She believes that founders should understand the differences between angel syndicates and venture capitalists (VCs) to determine which is more suitable for their startup. Angels can offer more than just funding, providing human capital and objective advice that can be valuable in the early stages. They may also be more willing to invest in underestimated founders such as women and BIPOCs. Angels can help startups overcome the cold start problem and create a social signal to VCs that the company is legitimate. However, the partnership with angels may be shorter than with VCs, who work on a longer timeframe and can provide the push for startups to sell upstream to bigger clients.
In terms of which type of investor is more suitable for a startup, it depends on the founder’s goals and stage of development. If a startup has found product-market fit and needs distribution, partnerships, or key hires, VC funding may be the push needed to scale up quickly. As having a spot in VC’s portfolio, they can try to help you easier to hit a milestone. However, if a founder is still testing things out and needs freedom to explore, venture capital may not be the best option. Ultimately, the first question for founders should be whether they truly want to be venture-backed, and if so, whether it is the only way to achieve their growth goals.
Choosing the appropriate investment type can be a critical factor in the success of a startup. Angel Syndicates offer smaller investment amounts with more involved support, while Venture Capital firms provide larger investments and take a more active role in management. Each investment type presents different risks and potential returns.
When considering whether to pursue Angel Syndicates or Venture Capital, entrepreneurs should evaluate the investment size required, the stage of their company’s development, and the level of involvement desired from the investor. It’s crucial to consider the potential trade-offs, such as control, ownership, and financial returns.
Looking to the future, both Angel Syndicates and Venture Capital firms are likely to continue playing significant roles in the investment landscape. As the startup ecosystem continues to evolve, new investment models may emerge, providing even more funding options for entrepreneurs.