TechCrunch | Haje Jan Kamps | April 7, 2016

Angel investors who wish they could invest alongside top-shelf VCs like Andreessen Horowitz, Greylock and 500 Startups finally have an opportunity to do just that. Crowdfunder today announced the world’s first VC “Index Fund,” which enables smaller investors to get involved with much bigger deals while still being able to spread their investment risk.

If you’re able to pick the right companies in which to invest at seed stage, you can make mega bucks. There’s only one problem: Picking the right companies is really hard, the vast majority of startups fail and of the ones that survive, only a tiny fraction go on to become unicorns. So what is a poor investor to do?

See: 

• Why Venture Capitalists Are Turning to Crowdfunding

• VCs Now Search Crowdfunding Sites for Opportunities

In the context of the stock market, there’s a solution: If you aren’t particularly good at picking stocks in the stock market, you can invest in an index fund that tracks a broad number of companies, such as the S&P 500 or the Dow Jones Industrial. Instead of relying on the performance of an individual pick, you can spread your risk by in effect putting your money in all the companies in the index. This, in turn, means that if the stocks for those 500 companies perform well on average, the value of your share of the index fund increases.

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