How to Navigate the Ever-Changing World of Early Stage VC

9:00PM Jul 8, 2021

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venture

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startups

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venture fund

significant uptick

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investment

funders

angeles

everyone, thanks for tuning in. I am Greg compare one of the editors here at TechCrunch. And I'm super stoked to be joined right now by Abdullah Kohli of Angeles ventures of luck. Thank you for joining us.

Thank you for having me excited for us.

I know that folks are tuned in hear from you. So I'm gonna get out of your way here. The one thing that I've got to say to everyone that's tuned in is to remember to submit your questions through hopping, the earlier you get them in, the better. The entire point of this event is to learn and to have your questions answered. So please keep the questions coming. And we'll get to as many of them as we can. Cool, so take it away. Thank you.

So I'm just going to go through a presentation as a backdrop for the questions are going to be coming up, just want to provide a little bit of color on what's going on in InVenture today. So in terms of who I am, I'm the CEO of Angeles venture. And you can think of Angeles venture as a financial platform. That is supporting funders, these are GPS, and LPs, basically, the actors around venture funds. And then funders, these are, of course, our founders. These are, of course, people who start companies. And you can really think of us as a platform. So we have a very broad view on what's going on in venture today. And so, here's our data set. We're now managing the portfolio of 8400. startups, we're seeing around 51% of all the top tier tech deals, and we're managing more than 5500, syndicates and fun. So again, just sharing this as backdrop into some of the data I'm about to go into next. Before we get into that, just want to define some of the terms I'm going to be using today. Since I know when I was a founder, I didn't really understand what LP was. So just wanted to share this. For folks who don't know, when we talk about fundraising and money going into startups, it typically comes from a fund or another word Venture Fund. The venture fund themselves also raised from investors and their investors are called LPs, short for limited partners, that's usually just the the quick term for them. So you have LPs that are investing into funds. And then the funds are investing into startups. And that's actually how the money flows. And these LPs can be, can range all the way from pension funds, to hedge funds to large family offices, basically, super high net worth families, and individual investors. So it really can range across the board. So that's the way capital flows into startups. And so what we're seeing is a very, very, very active market, actually, one of the best venture markets we've ever seen, for our entire data set and what this is showing. And I actually would want to want your attention at the top chart, the 10% rate, what that is representing is in our active portfolio today of investments that we're managing, we're seeing 10% of those companies are actually just got marked up in the last few months. That is very, very high. That means over the entire set of companies we're managing, and we're managing investments into 10% of them are marked up by some later stage fund. So that just to give you a sense of what's going on. There's a lot of interest in venture today. And like I mentioned earlier, LPs invest into funds and those funds invest into startups. What's also happening is there's a massive surge in LP interest in venture. What this is showing as it's actually showing a trajectory of LPs investing on angellist. And it actually is indicative of the broader market as well. And so we actually saw in the last few quarters, a significant uptick in significant change in slope of the number of LPs are interested. Basically what happened was, folks woke up one day and went, rather than just investing in public markets. They're now asking, How do I invest in the private markets? Now? How do I invest in venture? What is my venture allocation, and this is happening across the board, which is causing a lot more capital to flood in an interest of flooding from the LP side, but past to get allocated somewhere it gets allocated to venture funds. So then you see an explosion of venture funds, who are then they have the whole job is to deploy capital into startups. So that's what's happening today. There's a underlying shift in terms of LPs, many more LPs wanting to invest in, in the venture industry. And so all of this of course, means there's a significantly more amount of capital today for founders

bought by a huge margin than even a year ago. And we are seeing a lot of the downstream impacts of this. So what this is showing is the median valuation of pre seed companies. And we see a significant uptick from 2019 to 2021. If we look at cede similar trend, we're seeing a significant uptick into 2021. And then series A had the steepest increase. And if we actually take a look at the 75th percentile, which I didn't include here, we saw similar uptick there. So the top top top quartile companies are also seeing a very sharp rise in in the valuation. And as we think about this, sort of looking at it from a founders perspective, what does all of this mean? Well, all of this means is that what all this means is that there are significantly more players in venture today. And it that there are some complexities that you have to understand who they are, what their incentives are, and then how you want to construct your round as a founder for your company. And so at the top level, the way to think about our three different categories, we have the large VC funds and crossover funds, these are the largest cheque sizes, and you can think of the name brand VCs, such as Sequoia, Andreessen, Tiger, global etc, very large cheque sizes, again, each has their own their own investing strategy, they're not all the same, but generally, their cheque sizes are very large. Then you have the micro VCs, which is a very recent movement, and is actually growing very, very quickly. And I put their check size, one step below the large VCs. And then you have the operator angels, and the operator angels are typically folks who are working at technology companies looking to get exposure into investing. Now, the way to think about constructing your round, is to take a step back and ask, What are you looking to do with your company, and any startup usually is created because the founder has a vision of how the world should exist. And in creating that vision, needs to then understand how do you make that vision a reality. And what you want to do is you want to take that map it to what the risks are, sometimes it's team, you have to build the right team could be fundraising, because you need to raise a large amount depending on what you're going after. But just list out those risks. rank order it by the most, the most critical risk first. And then you want to think about each round that you're constructing, you want to think about who the investors are, that can help with those risks that can get you to the next stage of fundraising. And here's the key part, as you think about investors in any one of these three categories, you want to think about their cheque size, relative to their fund size, because that's going to be an indication of how much they can actually help you. Meaning if their check size is like a point 01 percent of their fund there, they don't really have that much skin in the game to really dig in. Which is why there was actually a really interesting tweet by Harry on checkstyle helpfulness, and he was really talking about operator angels, in that he was indicating that he's getting a lot of help from operator angels. And the underlying reason is because the cheque size relative to their fund size or network is quite high when they go to invest in companies. So they will begin and want to help. So here are just few of the things to know as you're thinking about constructing your your round, and how to think about the different players in this in this new world. So with that, we we're gonna move into a discussion component since I think that's where we're gonna get a lot of really great questions that we can dig in on this.

Awesome. Okay, thank you so much for that presentation. For the sake of context, can you talk a little bit about your story, and how did you get here?

Yeah, for sure. So my story is I started a few companies starting in 2011. And over the years, started three companies. One of them was acquired by square, and then another one was actually acquired by Postmates, which ended up at Uber and navall had been a prior investor and all of the companies. And when I'd wrapped up the acquisition of last one, he asked me to consider stepping in at angellist and in spinning out venture. So we actually dug in for six months and really got an understanding of what we could build what we can create. And I officially accepted in July 2019. So I've been with Angeles venture now for two years. And it's been it's been a ton of fun where we have a lot there's been a lot of momentum Recently in the product side, we have a lot more a lot more things coming.

Seems like there's been a lot of momentum was venture really something you thought about before you got into it? and Angela said,

No, it wasn't. I definitely did not think of venture as anything that I would the industry I would be in. What actually attracted me to it wasn't necessarily venture, it was actually the makings of a financial platform. And being able to build tools and products that eventually extend to founders. So when I sat there, and a lot of our tools were built for GPS, and LPs, really the funder side, and how do you reduce the friction, and you get more people coming into venture, really leaning on the solo capitalist movement, and having more LPs coming in. And then there's also the opportunity to start building founder products, which obviously is near and dear to my heart. Because I do think there are a lot of things that we can do to improve not just the fundraising experience for founders, but also all the downstream products that they can use, all the way from banking, to spend management to cap tables, the whole nine yards, I think there's so much we can do there. So that's actually what got me excited to, to come to Angeles. Got it.

Okay. So I know that in addition to your role at Angeles, does, you're also an investor yourself now, is that correct? Yeah. So what's your Do you have a specialty? Do you have a focus as an investor, then the again, this is just for context for the sake of people asking questions? Yeah,

for sure. No, I don't have any specialty. In terms of area of focus. I typically just lean pretty strongly, you know, the founder is what founder is, what their vision of the world is, and do I think they can get there? I'm not always right, of course. But I really do lean on the founders and the vision. So I've invested all the way from med tech company to consumer social to space company, literally, it's been all over the place, and it just comes down to the founder, their vision, how tenacious they are really focused on that

data. So angellist has been around for probably about a decade now. And I it's kind of evolved pretty dramatically, particularly in the last couple of years, as you mentioned, from that kind of social platform that it started out. And I think a lot of people still know it, as we think Angeles and you know, that piece and logo and whatnot. So what is Angeles today?

Like? What is the mission statement? Yeah. So a little bit of context, before I get in the mission statement, you can think of Angeles as effectively split into two companies, Angeles talent and Angeles venture. So Angeles talent is the hiring platform. And then Angeles venture is the financial platform, in for venture, and by the when I say split, completely split, each has its own CEO, board team, all of it. And for venture, our focus. And our purpose really is to increase the rate of innovation in the world. And we believe that startups are a huge driver of that innovation. And we want to see more of that in the world. And we see two components there. One is funders, you need a lot more funders to match all the creativity in the world today. And then founders, we need to make it a lot easier to tap a button and to founder company. So as we think about our roadmap and what we're executing on here, we're really going after the magic, the magic moment of you tap a button, and you get a fund, you don't need to deal with any of the complexities will take care of it all. And for an LP, you tap a button, you can invest in a fund, we're simplifying it considerably. And then for a founder, as soon as they have the inspiration of an idea, they can tap a button and get a bunch of packable company and we'll handle it all. And we'll manage all the way from the incorporation down to down to the fundraising tools and banking everything in one place. And you can just get going instantly within seconds. So we're really going after those two magic, magic moments for funders and for founders.

Okay, so I want to jump into some of the audience q&a here. There's one point of clarification that someone's asking you about, I assume that's what it is. You might have mentioned, super high net worth in one of your slides there. So he's asking you to define what exactly that means. Like to what range is at 100 million is at 500 million plus. What is your high net worth?

Yeah, so when I think about so if we take a step back, and we think about the SEC definition so the SEC definitions are accredited investor qualified purchaser. And those are the base level definitions. Only accredited investors can invest into private companies. And the qualified purchasers are usually net worth of 5 million and above and accredited, there are a few more characteristics you can actually take a test to become accredited, or you have a net worth of 1 million, or there's a certain salary requirement for that. So those are the base level accredited and then qualified purchaser now As we think about super high net worth, we start getting into families, you know, large families that are worth hundreds of millions of dollars or billions of dollars. And as you step up, you end up either having your own family office or multifamily office, it really doesn't, it becomes almost a business around how you manage all of that capital. And that's where you get into the single family office, multifamily office, world. And that edges up into the, into the large high network or super high network.

Okay, so I have another question here is from the shank, do investors or syndicates bring startup into the platform, or can start as registered themselves and reach out to investors?

Yeah, so today, syndicates are bringing startups to the platform, we do not have a way for startups to contact the syndicates on the platform or the funds on the platform. That said, it's actually fairly easy to find syndicates and up funds that are on the endorsed platform, on Twitter or everywhere. Everyone's quite vocal and out there looking to meet companies. So we just don't think we can do a better job of that than what's already happening in the ecosystem

today. Okay, this one is from the anillo. He asks, what trends are you seeing in venture investment for blockchain solutions? So what do you think in blockchain?

It's a broad, a very broad industry and broad term, it can be many things. Sure, I'll refactor that to say maybe crypto, a lot of interest in crypto. We are we're still in the very early stages and foundational stages of all these crypto projects. But there are very credible companies. And the most important thing is we now have a cycle of companies that have gone from startup to IPO, or they're doing extremely well late stage. So there is a significant amount of interest in crypto.

Okay. So on one of your slides, you mentioned that there's a pretty steep increase in valuation kind of across all levels. What's driving that say, like the pre seed level is purely just a matter of competition, and the amount of funding there is out there, what's driving those up?

Yep, supply and demand, just a significant amount of capital that's out there looking to invest, we are also seeing a significant uptick in founder starting companies. So while we, we've seen a lot more capital coming in and venture funds starting, we're also seeing a lot more startups that do get started. But the, the valuation increases, primarily because of the sharp increase in capital available. And we have to keep in mind that when it comes to startup investing, there is, you know, you're really going after a very, very large upside, you're not looking for a 2x or 3x, these companies when they work usually turned into 1,000x return on investment, or 10,000x return on investment. And in fact, software markets are way larger than anyone thought as we're not seeing the public markets, and we're seeing some of the revenue numbers, way, way, way larger than anyone thought. So it is rational that the pre seed and seed valuations would increase to match. So there are quite a bit of there, there are a lot of inputs into the rising valuations. But it is it does make sense it is logical. Sure.

Okay. This one that kind of on that same topic is from Joe. So with valuations climbing higher, how does a company that has lower capital needs get into a pre seed round? So I assume what it means is if you need to raise less money, how to even stand out amongst these, these folks that have massive valuations?

So I'll make an assumption on what the question is asking, which is, how do you raise a small amount of money if others are raising a large amount of money. And with that assumption, it really depends on what your goal is, as a company, if you are looking to build a venture backed company, then you can just raise a pre seed round, and you don't need to go raise any other future rounds. But I think the fundamental question to ask is, are you going to create a venture backed company because it is a very different path for a startup, because the investors that are investing into that company, their portfolio, and the way they're making a decision is expecting every investment that they're making to have the potential to grow very quickly and become a large company. And so you still do want to make sure that your your goals are aligned with the investors goals. Otherwise, you're gonna have a unhappy partnership. But that said, as long as you're building a bunch of backup company, because some companies that can be very, very capital light and capital efficient, you just raise a pre seed round, and then you can build off of that and you can grow. Another big development in the capital markets are actually coming from companies like pipe where you can net rather than using EQT Woody selling a portion of your company to grow, you could just also use your revenue, and sell a portion of your revenue and pull for cash and use that to grow. So depending on the characteristic of the company, if it's a sass company, sometimes they have that leverage and they can do it, I highly recommend that path that actually lets you sell less of the company and still gives you the cash that you need to grow the company.

Okay, I'm gonna kind of adapt a question here. And this from Sebastian, he asked to do do you more invest in a first time founder, a co founder, I want to kind of tweak that a little bit in the data that you're saying? What? What is the background of a lot of these founders? You mentioned that there are tons and tons of companies right now it's a great time for him. Are there more for first time founders? Are the companies that are raising money, mostly repeat entrepreneurs? Where are they coming from?

Oh, it's it's majority first time founders just by definition. I think the ones that decide to get back in the game have a special tolerance for pain. Well, how to get back in and starting another company. It is primarily first time founders, rather than repeat founders. And it also depends on if repeat founders already had, you know, success behind them, they'll usually fund the initial round by themselves, and then they'll go rates later on later on rounds. But by pure quantity and count, definitely majority first time founders.

Sure. This question here is from john, from the data. So our VC, did they seem more interested in impact? I'm sorry, let me repeat that. Are VCs ever interested in impact investing to create more social good through companies? Are they always focused on investing to get the highest return possible? So I guess, from the data that you have, how much investing is going into social good versus let's get those returns?

Yeah, we, we wouldn't have the data on that. Since that's it starts getting into more of the intent behind the investment. So we don't know. That said, what I can share is, we have seen thesis funds, special thesis lines that are focused on impact investing are focused on a particular theme that gets into social good, that are on Angeles, and they're brought, and they're actually doing their fund administration with us. We have a couple of rolling funds like that a few traditional funds. So that is happening now. Is it happening across the board? In terms of when people are making in writing that check? We don't know, we don't have the data on what the intent is behind that investment.

Okay. I have a question here from my colleague, Natasha, who is 1000 times smarter than me ask you a question. Does angellist does angellist see itself getting into alt financing beyond standard VC?

It's a good question. We haven't made a decision yet. It's something that of course comes up and we think about, but right now we're we are focused on equity and venture.

Okay. So you mentioned earlier, and I think I've heard you mentioned in the past, putting some more focus or offering more services to founders, and in addition to the funder, what sorts of things are you thinking about?

Yeah, you know, I think the, the one part that's never made sense to me is, you know, when a founder goes to incorporate a company, they have to stitch together all these service providers today, you have to find something for legal, and then you have to also go figure out all of these terms around like, you know, number of authorized shares, and, and all of that, and why it doesn't make any sense, you don't need to. So what we're going to do is, we're actually going to create a very simple experience, where you tap a button, and you get a bunch of packable company, and will bundle everything in that you need to run your company. And so you can think of incorporation, you can think of fundraising tools, we of course, you know, launch roller vehicles, which allows you to raise from many small checks, and it doesn't crowd your capital to sing the line on the cap table. So we're looking at a lot more innovations like that, to create a seamless process for a founder to go from incorporation to raising a bit of capital to raising more capital, into actually how they manage the capital. So the suite of tools that we're building are all around that. So how did they raise the capital, manage the capital? And then how do they manage the owners and the ownership ledger and who are in the company. So we think that there's a lot more that can be done around that that's much better all in one place versus all these disparate tools. And we think that once you do that, and you compress it, because we've already done this with ones today, it's actually a more delightful experience to close into a fund on angellist than it is to close into a startup out there. With an angel list, you can send a link and you can close investors a single line done on startups, you have to sign a safe and then you have to wire and I have to call up my bank for the wiring or approving the wire. But we think that we can actually bring that experience to founders and once we do that, we think alike You bring a lot more founders to the ecosystem. And we get out of this, you know, all this specialized knowledge that you have to know about Delaware C corporation, 10 million authorized shares and 80, you know, 83 b elections, we think we can abstract all of that complexity away for them.

Okay. So bit of a strange question, but it's something that I've wondered about for a little while. Do you ever get pushback from the more traditional funds? Like, maybe people who've been doing things a certain way for 1020 years, and there's like, stop, stop changing things?

I, I honestly could not speak to that. Okay. I've been in venture for only two years. Sure. And we're actually quite quite heads down building, building a lot of product that said, in the two years that I've been here, I wouldn't say that I've seen any pushback. To be honest, I think traditional funds have actually welcomed solo capitalists with open arms. In fact, I mean, a lot of solo capitalists are also formerly from some of the traditional large VCs, and I, some my good friends that actually used to be at sort of larger VCs, or have now spun out and done their own funds and their sole capitalists. So in my time here, I have not seen any pushback, I think when we launched rolling funds, there was a misunderstanding of whether or not you can publicly fundraise. That was the only time where there are some questions, it wasn't really pushback was more just like, Wait a second, this seems illegal. And that's the whole difference between 506 B 560. Rule. But, you know, outside of that, we haven't really seen anything. And in fact, we think of this as a vibrant ecosystem, where you have players at different stages. So you have players at the pre seed and players at the seed series A Series B, and it's a vibrant, vibrant ecosystem of partnerships, all along the way. And ultimately, to be honest, what we're here for is to serve the founder, like make sure that they have everything they need the founders, the founding team, the employees to go build these, you know, large and meaningful companies. That's ultimately how we view things. And we want to build tools to support all of that.

Sure. Got it. You mentioned rolling funds, and I want to talk about rolling funds a little bit, I know that you've probably been talking about them non stop for the past year, it might be a little bit tired of talking about them. But so you might be better positioned than anybody. And to give like the super quick synopsis on what a rolling fund is versus more traditional fund.

Yeah, sure. So for the audience, who probably doesn't know the details of even how traditional fund works. Basically, when you go to raise money from investors, LPs, to invest in startups, you go through this fundraise process, it's very similar to what you do as a startup, except you're going to different set of investors, and you go to raise a fund. And when you do a traditional fund, you basically have to raise all of it upfront. So let's just say you're raising 10 million or $20 million, you have to first go find an anchor, someone who's going to put 40 to 50% of the fund in. So you have this process, we have to find an anchor. And then once you have an anchor, it creates momentum, and then you can close the rest of the investors into your venture fund. The challenge there is that it actually ends up becoming this big bang, fundraise where you have to do everything in a short amount of time. And sometimes it can take 12 to 18 months just to get that going. Because you have to wait on that anchor, and the anchor conversations. The issue there, there aren't that many anchor investors when it comes to traditional venture funds. And so you're basically going to the same group of people and pool of capital. So we looked at that. And we asked, Why does it have to be that way? Why do you have to raise a whole bunch of capital upfront, then shut down the fund for capital? And then you get into deployment phase? Why couldn't this be? Why could you just leave the fund open? Because if you leave the fund open, then you can just continue taking in checks and you continue investing? Well, the reason you can't leave it open is because of one limitation with a traditional Fund. The limitation is that when you go to take in the next check, that LP gets exposure to all the investments in that fund. So the there's a bit of fairness issue there. So the rolling fund, what we did was, we saw there was a better way that you could just create an always open fun, that never shuts down for capital. And every LP that comes in, just doesn't get exposure to pass investments. And as long as you do that, then this can actually work and the economics and everything works. So that's what a rolling fund is. It's it's an always open venture fund, where you can just keep accepting new capital just keeps growing as you as you make investments and your portfolio is doing well. And so that's the difference between traditional fund and rolling fund. So we actually have a pretty sizable traditional fund business as well and Rolling from business. And but we think that there's wood rolling funds, that there is this aspect of continuously raising capital and accepting capital, which is some of the rolling funds of scale very, very quickly today.

So of the ones that are scaling pretty quickly and are doing well, is there anything that they're doing particularly well and makes them stand out?

Yeah, we actually, they could think about all of us, because we then are sharing best practices. Yeah, you know, the interesting thing is just the GPS, these are people who are actually running the funds, conducting quarterly calls, turns out is actually working very well, where you're just walking, you know, you're walking the LPS, through what is happening in the portfolio, and walking through how you're thinking about investing. And it turns out, that actually gets people more comfortable. And the cool thing is that they can just increase their check size, because this fund is not shut down. And if you can see that the portfolio, the portfolio already is doing well. Of course, an LP is going to want to invest more capital into the fund, because they believe that you are going to be a great steward of their capital. And so we're seeing that as being something that's very, very, very, very successful way to raise capital. The other thing is, all of the rolling funds are by default, enabled for general solicitation, that's under the 560 rule. So they can be loud, talk about it, and just share it publicly. And we handle all the complexities in the background. And that's also been a big thing where people are just literally investing in public and then sharing how their portfolios doing there are a few folks are doing very, very well, online. Sahil and Cindy, Cindy, from capital X to two great examples.

So why is something like a rolling fund coming around, you know, now or in 2020? As opposed to like, 10 years ago, 15 years ago? Is it strictly five or six? There's more to it than that?

No, it's it's the it's a software nature of it. So when you think about, you know, what, why the traditional fund structure came about, or how it came about, it came about in a world where everything was done through people, the legal documents, the accounting, and everything is all done through people. So when you have that, you're then trying to create these constraints in order to be able to do everything well. And what angellist ventures actually been building over the past few years, is rethinking the way in which you run a venture fund, or many, many venture funds. And we've actually been thinking about everything through the lens of software first. And what that means is we've actually built the software blocks for every part of running a fund all the way down to taxes to the investor management on to, to reporting everything. And because of that, we essentially have these blocks that we've now software blocks, we've been able to piece together. And we've now been able to create something like a rolling fund. So if let's just summarize, it really is the infrastructure has to all be in software, in order for this to happen, otherwise, this is not possible.

Okay. That makes sense. We have a question here from Darren, do you have any examples of well known companies that have been funded by rolling funds?

Yeah, we do. I won't be able to share them here. Because I actually don't know what's been announced publicly and what hasn't. So I don't want, okay, because we see a very large percentage of tech now. I have to basically, firewall myself lost nothing, because I just don't know what's called like, what's not sure how but but but there are many, I would basically look at the, you know, top rolling fund, or some of the rolling clingy bees that are very public on Twitter, Sato, Austin, and they regularly share what companies are investing.

Okay. So having been a founder, yourself and an investor, can you speak at all to the experience that a founder might have in taking money from a rolling fund? does it differ? Are there other downsides?

No, there, there really aren't. It's, it's, they're both like rolling fire traditional fund, they're both venture funds. There really isn't a downside. It's actually the same. They're both venture funds and venture constructors. So it is the same you can accept money from a rolling fund or traditional Fund. The one characteristic of a rolling fund is they're usually founders and operators that are starting some of the rolling funds. And so you do get a bit because we've literally abstract away all the complexity. And so you are, you know, going back to the cheque size to helpfulness you do get someone who can be truly helpful to you because they're either in the midst of building the company or already have a, you know, a company worth multiple billions of dollars. And they can actually help with tactical day to day items all the way from recruiting to product marketing to fundraising. They're in the midst of it day to day today. So that's the one I would say, characteristic of some of the rolling fund managers that I've seen founders take take advantage of.

So is there any sort of transparency with within a rolling fund as to where the money is coming from? Is this just because I've been talking to more founders lately who care about the the ultimate source of where a fund is coming from?

Yeah. Yeah, it is interesting. So I mean, we, we actually do have some external institutions that have also invested in Rolling funds now. But the typical characteristic of rolling fund LPs are actually other founders and other employees. And because it is so simple, now, you can start small, you can scale up. So it actually, you know, ends up just being founders investing founders who are investing other founders is really just the ecosystem, capital is coming all the way back in and back out and back in and back out. Whereas in a prior world, the way traditional venture used to work and still works today is you, the capital goes in, and then some portion of it goes into these pension funds. And that capital then comes in into the traditional venture fund, and then goes into startups, rolling funds, actually are a much are a much more smoother way of capital going in and coming out. So what's happening is, founders and employees that are hitting liquidity are investing into rolling funds, those rolling funds run by founders invest in other rolling funds, founders and operators invest in other founders. And in that capital cycles back in. So they're actually from a lp perspective, it very much looks like what people are familiar with, versus any other international.

Okay, oh, we have a question here from Rahul, can investors withdraw from rolling funds.

So I'm going to assume that it means you've already made a commitment, subscription, and then your intent is to withdraw from it. It really comes down to the relationship between you and GP, you end up in the person running the fund, we we can support whatever the you know, whatever the outcome is of that decision. That said, we don't typically see that, because you're effectively reneging on your commitment. Some fund managers do have a aggressive clause, some are actually quite understanding, it really depends on what the reason is. So you can it just really depends on the on the fund manager, but typically, it's not. It's not a normal thing. Got it. Okay.

question here from Darren, who asks, Does taking investment via a rolling fund impact your ability to raise a later round via traditional fund? Because I've heard things like crowdfunding can sour future funding rounds? Hmm.

Yeah, so rolling fund is definitely not crowdfunding is very much like accepting capital from a traditional venture fund. It's actually the exact same. So it wouldn't impact any of your future fundraising efforts. In fact, it'll probably help it because some of the, like I mentioned earlier, some of the folks running these rolling funds are founders operators, who themselves are raising large, large amounts of capital from other VCs. And those other VCs want to make sure that they do right by that founders. So they want to keep a great relationship. So we're actually seeing it being helpful versus harmful. And in fact, we're, you know, we are seeing the number of investments come from rolling on traditional funds matching on the Angelus platform. So it is quite, quite prevalent now in the industry.

Okay. Unfortunately, our time has absolutely flown by here. So got 30 seconds. Any words of advice to the founders trying to raise right now?

Yeah, I mean, I'll just end it with luck. It's a it's a founders market? For sure. It is. I joke around that when I raised for my first company, I think there were 20 people on that list. And I think I have that spreadsheet somewhere right now. You know, today, you probably have 1000 people on that list. I would highly recommend thinking about constructing the right round, bringing in the right investors. Think about cheque size, to size of font and cheque size to helpfulness. And just be clear about what your expectations are of the investors because you're about to get into a likely a multi decade long journey building, you know, building something you really want to see in the world. So take your time and picking who the investors are and really do your due diligence.

Okay, awesome. out of luck. Thank you so much. That is my alarm letting me know that I'm out of time. So the one last thing is how can people get in touch if they want to and today?

Yep, Twitter twitter.com. Slash how block AV L. Okay, I'll see you all there. Perfect. Thanks so much. Good luck. Thank you, sir.