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Venture Capital Dispatch | By Lora Kolodny April 24, 2013
A site that connects startups and early stage investors, AngelList, is rolling out a long-anticipated equity crowdfunding service to its users this week, according to Chief Executive Naval Ravikant.
Dubbed AngelList Invest, the service has been available to a handful of companies, by invitation only, since December 2012. Eighteen startups, including Transcriptic, Double Robotics and Tred, raised $6.7 million in funding commitments from 620 investors, via AngelList during that test period.
The service is now available to any qualifying startup or “top-tier” accredited angel investor using the site.
Ash Fontana, a “venture hacker” who develops AngelList’s fundraising products explains: Startups who want to try this already-legal form of crowdfunding (known as Reg-D crowdfunding) through AngelList and its partner SecondMarket, must have already attained $100,000 in seed funding from a “top-tier” investor. They must also be incorporated in Delaware.
AngelList ranks accredited investors based on their past experiences founding and funding, or advising companies. If a deal they were involved in was a big success, the investor accrues more points and may qualify as “top-tier.”
It’s not a “stack ranking” but puts investors into a “bucket,” says Ravikant. “You’re not asking if Reid Hoffman is a bigger deal than Ben Horowitz, but you can see they’re both ‘top-tier.’”
The ranking system is programmatic, not subjective, and works somewhat like Page Rank technology, he emphasizes. “We’re not in the business of picking winners. We let our community do that, and let the facts speak for themselves,” he says.
Here’s how AngelList Invest works, generally:
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