A fun innovation in financial engineering I saw recently and thought was worth sharing: I am an extremely tiny angel investor, which means I periodically send small checks to startups in return for an equity investment. This has historically been very toilsome for all parties.
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I'm not sure I get it, is it basically that: angellist had standard contract terms, so you can just assume their terms are good and scale to many investments?
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I'm even more impressed by the operational processes than by the standard terms, but there is some value created by "Well you're AngelList and a) you've clearly had the best lawyers review these and b) if anyone picks fight with you they're picking a fight with entire ecosystem."
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Super idea. Since the company is the SPV sponsor, can they waive the carry, so the leakage is just the % to angelist?
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*hums meaningfully*
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Even better is that you have AngelList’s legal and ops team reviewing all the docs for you and collectively negotiating on your and the other angels’ behalf
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Issuer-created SPVs for raising capital have been around for awhile. Presumably the issue/SPV still has to do the blue-sky and Form D filings, the Regulation D disclosures, etc., right? (IANASecuritiesL)https://www.seedinvest.com/academy/a-special-purpose-vehicle …
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This has been my main deterrent toward angel investing. I have my own business to run—so would rather help a friend/company for free vs. invest, given the time sink via paperwork and review. If this becomes [more of] the norm, that's exciting.
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@naval what you think about this use for@AngelList?Thanks. Twitter will use this to make your timeline better. UndoUndo
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Nice idea. How would it work in the UK, say, where angel investors use EIS tax relief to reduce the risk of investment? The SPV company wouldn't be eligible, I believe. Isn't this better handled by a nominee structure? Cc
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In the UK, AngelList uses a Nominee structure - check out https://angel.co/help/europe/uk-syndicates-how-are-uk-syndicates-different-from-us-syndicates …
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