

FundersClub: An online platform for making angel investments - sthatipamala
https://thefundersclub.com/

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asanwal
So besides the YC connection, I am genuinely curious what is different /
better about FundersClub than any of the other 100 crowd funding "platforms"
that have emerged?

These types of exchanges connecting companies with investors have been tried
tens of times before, and they always fail because building a two-sided
network is hard. People will only invest if good companies are there and good
companies only show up if real money is there. Nothing I saw on the site
suggested theyve solved this issue.

I'm cautiously optimistic about the Jobs Act but see so many of these
platforms cropping up that seemingly don't have a solution to get quality
dealflow and quality funders. The key to that IMO is not the fee structure
which FundersClub spent a lot of time detailing or ease of the legal process.
These are details but the key driver is getting quality startups and check
writers on the platform who want to get "hitched". The legal and pricing
details are next.

Lastly, the only folks really uniquely positioned to build the required two-
sided network are the team at AngelList. I've not heard they're doing this but
of anyone, they have the assets it seems to pull it off.

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talsraviv
The team behind it - these guys have each built multiple successful companies
with exits or massive profits - together with the YC spotlight. You're right
that being in YC alone won't cut it but as we've seen it definitely amplifies
the power of a great team.

The YC spotlight is particularly perfect for this concept because of demo day.
They might be the only startup that can get all their most important and
prominent target customers (and thought leaders) in one room, very shortly
after launching.

~~~
asanwal
But demo day really isn't their market is it? Demo day is YC companies with
tons of amazing access to capital with pretty great terms (Milner, A16Z and
Ron Conway cash) and a group of other attending investors who aren't
interested in writing $1000 checks.

If they could convince YC companies to forego the available money and use
their platform instead, that would be a coup for sure. But that seems
unlikely.

~~~
talsraviv
Good point. But it is the world's best opportunity to get leading investors on
the platform to make an investment or two to give it a level of credibility
others have not reached. That itself is a mini network effect problem but
having them all in one room makes it much easier.

Having the world's leading angel investors on the platform would be one of the
keys to establishing a successful two-sided network.

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kdsudac
I checked out the video. Was disinterested until 0:50 mark. Once I saw minimum
investment as low as $1,000 my interest went up. Kinda lending club meets
kickstarter.

Probably a fair amount of people (myself included) would like to be an angel
investor. For people who are rich but not one-percenters cutting a check for
$100,000 for a risky investment is a high barrier to entry. I'd be more
inclined to make 10 x $1,000-$2,000 investments (bets?).

Could be interesting for niche markets if it bring in people with expertise,
high income and are also decision makers in their day jobs: doctors, lawyers,
small business owners, senior managers, corporate officers, etc.

~~~
ocelotpotpie
Perhaps eventually. At the moment you need to be an "Accredited investor" in
order to actually join and invest. They define an "Accredited investor" as
meeting at least one of the following criteria:

\- Someone who has made $200k+ for the past two years and will continue to do
so.

\- Someone with joint income with a spouse exceeding $300k for the past two
years.

\- Net worth or joint net worth exceeding $1 million.

While this does make sense, it basically means the type of folks who are
already quite rich and would be making these sorts of investments just have
the tools and ability to make investments at a lower scale, and through a
website.

It's definitely an interesting idea, but I'll be more excited about it when
the investors they allow get closed to the "average people" in the industry
who aren't sitting on a million dollars.

~~~
kdsudac
My point is those thresholds aren't that high for people like "doctors,
lawyers, small business owners, senior managers, corporate officers, etc."

Senior level engineers, accountant, etc could have net worth exceeding $1
million once you factor in home ownership, 401k, stock portfolio, 401k, IRA,
etc.

Potentially you'd open up angel investment from the 1-2% to the 5-10%.

~~~
ontoillogical
I think the 1 million minimum doesn't include the value of your primary
residence.

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skue
I don't understand why startups would come here versus AngelList or other
platforms. The $1K minimum practically guarantees a poor quality investor
pool.

Just think for a moment about how conservative an investor has to be in order
to (1) qualify as accredited (millionaire or very well paid) while (2) still
being unwilling to part with more than $1K.

One of the problems that entrepreneurs have with sites like these is the noise
- the folks who like to call themselves "angels" but only invest a random $5K
once every year or two. They are more likely to waste your time with numerous
questions and less likely to ultimately invest.

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dmarble
Discussion from a few days ago about FundersClub:
<http://news.ycombinator.com/item?id=4294411>

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mcarvin
game changer. will you let vc's work for you after you crowd out their market?

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stanfordkid
Insider access?? lol

