Angels Get Carry for Helping a Startup Raise Money With AngelList Syndicates

This only works for liquidity events.<p>Think about it.<p>No management fees are being charged; only performance fees.<p>I&#x27;m not in the VC business, but there are a lot of investors who are going to be very, very hurt in the next couple years once consumer technology valuations crash. On the other hand, this move may let the party last a bit longer.<p>Too many people are chasing companies believing the investment will lead to a 10x or 100x return. But, investing in unprofitable businesses is quite different than publicly traded investments and private equity investments.

The short version-<p>A lead angel investor gets a commercial bonus for connecting other investors to an early-stage startup fund.<p>My reaction-<p>Not all exchanges of value have a direct commercial value associated to them. After we&#x27;ve torn all of the middle-men down with technology, we&#x27;re now slowly bringing them back into the mix.

This is disruptively (subversively?) awesome, not just for its initial incarnation but all the ways it could iteratively evolve.<p>Right now it&#x27;s like a per-person &quot;0 [fees] and 20 [carry]&quot;. Will AngelList try to enforce a 20% carry standard or let it vary? [UPDATE: I see a tweet by @naval confirming angel chooses carry rate.] How about the 0%?<p>Does the answer change if and when syndicates-of-syndicates arrive? Is that powerful or too much like an MLM-downstream?<p>Will loose affiliations of syndicate-leads cross-syndicate (simulating a mini-VC-firm)? What kinds of support services will syndicate-leads need (and perhaps share)?

Although HN reaction to AngelList syndicates has so far varied from negative to blah, I think this could be big for startups outside of Silicon Valley. For early stage startups in e.g. Europe, it&#x27;s quite significant investment of time and money to raise an international seed round and having an easier way to organize international syndictate rounds can be a game changer.