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Late last fall, Boulder's famous Foundry Group opened up its much-anticipated AngelList syndicate, FG Angels, as one of the first to jump in and try out the AngelList syndicate process. Since it is a new process, the guidelines started off fuzzy for both investors and companies. In FG Angels' case, Portland-based OnTheGo agreed to be the "test subjects" and ended up raising $330,000 as the syndicate's first investment.
According to their AngelList page, FG Angels is expected to make 50 syndicate investments each year, at at least a $50,000 committment each. So far they have been keeping up that pace, with roughly 10 investments closed via the syndicate as of now, with an average of over $300,000 each (for companies that disclosed the amount).
Although FG Angels is made up of investors across the nation, Foundry Group has stayed true to its Colorado roots with 40 percent of its investments going to Colorado companies. Silicon Valley is still a big player for investments as always with about 40 percent of FG Angels-backed companies hailing from San Francisco.
The companies that FG Angels has funded range from Boulder-based Uvize (a software platform for veterans) to Boston-based Drync (an e-commerce app for wine lovers). Here is a look into five of the companies funded by FG Angels so far - and what advice they can offer to those looking to do it next...
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What they do: ArtTwo50 is the first mobile-only e-commerce art platform that lets users see original artwork hanging on their walls before buying it.
Headquarters: San Francisco
FG Angels invested: $285,000 in February
Previous funding: $145,000 in late 2012
What they are up to now: Two new hires, a rebrand, two new product launches to compliment their iPad app: “This is the biggest month since we've launched,” Ethan Appleby, CEO and founder, said.
What they have to say about the syndicate process: “The biggest lesson learned for was understanding the 99-member limit of an LLC (how the funds are set up). So the syndicate may be worth about $500,000 and you get commitments of about $450,000. So we thought we would get the entire $450,000, but thats not the case because the commitments come from about 250 people and the 99-rule only lets you take 99 investors - with some exceptions (accredited investors aka people worth $5 million or more don't count). Because it’s kind of first-come, first-served, you don't know if the 99 you'll get will be those who invested $25,000 or $1,000.”
Advice for other entrepreneurs using AngelList syndicates: “Set expectations. Also get the list of investors and push hard on those who have 'committed' the most, but not yet signed the docs.”
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What they do: Their device called “Iro” is a smart irrigation controller that is powered by intelligent cloud-based software and is controlled via an app or web dashboard.
Headquarters: Denver
Previous funding: $350,000 in seed investment before FG Angels announced an investment in April
What they are up to now: “We are heads-down getting ready to ship product at the beginning of May,” co-founder Matt Reisman said. “We are really excited about the launch, we've spent over a year and a half working toward that moment.”
Their advice for others working through the syndicate process: “The AngelList process was incredibly easy. I'd say the best advice I'd have is to spend time ensuring that you get good content on your page and be prepared to answer tough questions that will come your way. The timelines for when things happen isn't set in stone as is anything with fundraising. I was actually very surprised how fast a lot of things happened. The AngelList team was very helpful and responsive in the process.”
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What they do: OnTheGo software platform make smart glasses easier to use and the applications on them more powerful.
Headquarters: Portland
Funding status: They’ve raised over $1.6 million since September 2013, $330,000 of which came from FG Angels (which was the syndicate’s first investment).
How they came to be FG Angels’ first investment: “We met Foundry through one of their portfolio companies in Portland,” Ryan Fink, CEO and founder, said. “We were the first company to go through the syndicate process, so I think our use case is pretty unique. They worked through a lot of the legalities of investing in a company through the AngelList syndicate process and we were happily the test subjects.”
Advice to others about the syndicate process: “Have other investors lined up outside of AngelList and use the AngelList process to help propel momentum for raising money.”
What they’re working on now: They are planning on launching a new interface for smart glasses called Ari (Augmented Reality Interface) to the public in September with some major partners.
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What they do: RABBL is a social booking platform for live music.
Headquarters: San Francisco
What FG Angels invested: nearly $340,000 in March
What they are doing with the funds: “We're already working with our first signed artist this month (Warner Bros) and will be working with our first festival as well,” Wade Lagrone, CEO and co-founder, said. “On the technology side, we've almost got a major feature ready for fans that will connect them even more directly to the ability to tell their favorite bands where to play.”
How the AngelList process treated them: “The AngelList syndicate process is great and there are some terrific people helping you through it.”
Advice to others looking to raise via an AngelList syndicate: “On our end, we sometimes found some of the numbers confusing. AngelList often states a commitment number as to your raise, but it's important to remember that that number is really a theoretical number, and not to get distracted by it. As it turned out, our partner at Foundry Group, Ryan McIntyre, estimated our raise nearly to the dollar.”
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What they do: Prompt.ly is the only mobile-first, scheduling, promotion and payment platform for “soloprenuers.”
Headquarters: San Francisco
Funding status: They raised $1.5 million in November, $325,000 of it coming from FG Angels.
What they say about AngelList syndicates: “The biggest lesson is be prepared,” CEO and co-founder Richard Titus said. “Have all your materials, your video and your content created before going live on AngelList. It's also nice if you can have a friendly journalist do an article right around the time you go live, referencing your profile.”
What they are up to now: They are working to get launch their public beta at the end of May (private beta went live in December).
