We’ve been floored by the amount of interest the community has shown in our AngelList syndicate, FG Angel. Alongside that interest has come a lot of questions which have been helpful to us as we work through the details of creating our AngelList Syndicate and making our first FG Angel investment.
To provide clarity where we can, we’ve put together this FAQ that responds to many of the questions we’ve received. As you read through this FAQ, keep in mind that it is specific to our FG Angel initiative. If you have questions about syndicates in general, AngelList has put together their own FAQ.
If you want to jump into the fray and you can join the FG Angel syndicate here. We are capping it at $500,000 ($50,000 from us and $450,000 from the syndicate.)
The answers below are not static, and we expect there will be new questions. As AngelList evolves, so will we.
Investment Parameters
Do you intended to use Foundry Group themes as a guide or will you be more promiscuous? We see FG Angel as a great way to explore new areas that we’re interested in, but haven’t dug into yet due to Foundry Group’s thematic investing. We’ll also be investing in companies that fall within Foundry Group’s themes. In short, promiscuous.
Will you lead deals? Look for ones that already have terms set? Both? Both. Our focus is on companies and founders that we see potential in; we’re comfortable either leading or following.
Is there a ceiling on valuation or dollar amount raising? No.
Are there AngelList specific dynamics which make an investment more/less attractive? We have no clue! That’s one of the reasons why we started FG Angel: to learn how this new channel of investing changes investing itself.
Will FG Angel investments be first round only? Given the amount of capital that we are putting into the companies (capped at $500k), it makes sense that we’re the first money in, or close to the first money in.
Investment Process
How will the FG Angel investment process differ from traditional Foundry Group process? One big difference: not all the decisions need to be made over sushi because that would be a lot of raw fish. Our FG Angel investment process is a lightweight version of our typical process. All four partners have to be really interested in the company. We’ll run an internal diligence process before we make a decision to invest.
Will you meet with companies in person? Video? Either in person or via video conference. Or both.
Do you need unanimous partner support in to invest in a company? Yes.
Will you send companies to AngelList to invest in them there? If we are interested in the company and they are at a stage that makes sense for FG Angel to invest, yes.
Will Foundry Group invest alongside FG Angel? Perhaps. Foundry Group is by no means a follow on fund to FG Angel. However, if there is a company that FG Angel has invested in that fits within Foundry Group’s themes we’ll definitely consider it.
Deal Parameters
Will deal structure / term sheets differ from traditional Foundry Group investments? If so, how? We will be using AngelList’s standard documents.
While you won’t take a board seat, will you be a part of selecting a board representative? No.
Will you negotiate terms? Unlikely. We won’t accept terms that are outrageous, and if it comes to that point, we won’t be investing in the company.
Are there any follow on dynamics in the AngelList syndicate structure? Another question that we’re very interested in ourselves. We’re hoping to learn the answer through our early participation of the syndicate experience.
Portfolio Integration
Will an FG Angel investment be treated differently than other portfolio companies? Yes. Many of the companies will be at a different stage than the other companies we invest in so we’ll start out with a few different things.
They will have their own communication channels (but will still be introduced to Foundry Group portfolio).
They will have their own page on the website.
They will not have a specific partner paired with them, but rather have access to all the partners on an as needed basis.
Syndicate Relations
What level of communication do you anticipate having with syndicate members? One of the greatest values we see from the syndicate structure is the amount of supporters a company gains through one (relatively small) financing. We want to maximize the value of this network the best that we can. The specific channels of communication are still being figured out but expect high levels of transparency between the syndicate members, the CEOs of the companies, and all four partners at Foundry Group.
Miscellaneous
Is there a situation where FG Angel is competitive with Foundry Group? Nope. Due to how we structured FG Angel, there is no legal or deal flow competitiveness between FG Angel and Foundry Group. It’s all part of the same investment portfolio.
Will you help companies raise the next round? If specific questions about fundraising arise, we’re available to help. However, we will not be directly involved in helping FG Angel companies raise additional capital.
Will you allocate reserves per company or to FG Angel investments collectively? FG Angel will not be holding any capital in reserve for follow on investments.
After joking that every VC in the US was at this moment discussing AngelList and how it might, or might not, impact them, we decided to do something. Rather than talk, we decided to participate. After discussing a few different ways to engage, we decided to form FG Angels, through which we’ll be an active funder on AngelList.
We are committing $2.5 million to this effort with a goal of making 50 investments between now and the end of 2014 in companies that list on AngelList. We will invest $50,000 of our own money in each company and the balance from our syndicate. Over the years, we’ve had many entrepreneurs ask if they can invest alongside us. We’ve never had a side fund – this is our first experiment with it. For now, we are capping our syndicate at $500,000 although we’ll revisit this from time to time.
These are seed investments from Foundry Group. We don’t have a separate seed program, although we have always been active seed investors through our fund and indirectly through a variety of vehicles. One example is Techstars, where we are investors in the various Techstars city funds as well as Star Power Partners. Another example are the 30+ seed VC funds that, between the four of us, we are personally investors in.
We will make these seed investments using the same strategy that we’ve made in the past as angel investors. The money will be coming from Foundry Group and all of the economics associated with the investment, including any carry on our FG Angels syndicate, will go to our fund. For these seed investments we will focus on people over ideas (the idea is the price of admission), will decide quickly, and will run in a pack with other angels as we don’t have to be the lead investor. We will be acting like angel investors in these investments – it’ll be unlikely that we’ll follow on in later rounds, unless the company specifically fits in one of our Foundry Group themes, and we won’t be taking board seats in these companies.
Our reach at the seed investing level is now well over 1,000 companies, across Foundry Group, our personal investments, Techstars, Star Power Partners, and the various seed VC funds we invest in personally and as a partnership. We’ve decided to spend the next year working hard at amplifying this network dramatically. Our FG Angels strategy is part of this. We’ll reveal more as we progress.
We recognize that the landscape for early stage investing is constantly evolving. While we aren’t worried about being negatively impacted by crowd funding, we figure that the best way to really understand it is to participate.
Cloudability is Looking for a VP of Engineering
Cloudability is a Portland/Bay Area based startup that is changing the way companies measure, monitor and analyze their cloud based infrastructure. With a growing team that works closely together, we move fast and enjoy what we do. Over 7,000 companies across the globe use our platform today. Come join the fun and build something big with us.
JOB DESCRIPTION
As part of Cloudability’s Executive Team, the Vice President of Engineering oversees our growing team of software engineers. This is a hands-on role, where you will be using your experience as a software engineering manager in a rapidly growing environment to lead the engineering function, mentor staff and expand the team. In addition, you will use your experience solving significant and complex technical problems to serve as the strategic technical leader for Cloudability, partnering closely with the rest of our executive team as we continue to build great products our customers will love.
QUALIFICATIONS
What we are Looking for:
• Demonstrated success as a software engineering manager in a rapidly growing environment, with the ability to lead and grow an engineering team in multiple locations.
• Software engineering chops – you value how code is written and enjoy teaching design patterns, OOP, etc.
• Significant experience delivering web applications/services.
• Demonstrated success working with cloud-based infrastructure services.
• Big data and distributed systems domain experience (i.e. Hadoop, map reduce patterns, processing/warehousing/analytics, data replication, distributed system design, etc.)
• Experience utilizing agile methodologies.
• Familiarity with and ability to manage DevOps.
• Fluent in Ruby/RoR or ability to pick it up quickly (other languages a plus).
• Great communicator at all levels of the organization.
• Isn’t allergic to Javascript or the “front end”.
ADDITIONAL INFORMATION
What we’re offering:
• A competitive full-time salary and stock options. We want you to be excited to be a part of a startup, not starve.
• Fully paid health care, dental and vision insurance for you and your family.• Optional FSA debit card to cover non-standard medical expenses.• Flexible paid leave time.
• Friday Happy Hour and other fun company events.
Contact Mat (at) Cloudability dot com if you are interested.
Our Investment in 3D Robotics
We’ve long felt that machines are taking over the world. Given the rapid cost decreases in sensory components (brought upon, inpart, by the proliferation of smart phones and other mobile devices), it’s easier and cheaper than ever to construct hardware that can interact with the outside world in a fully or partially autonomous way.
Over the past few years, we’ve kept close attention to one particular market of interest: unmanned aerial vehicles (UAVs). We believe that the applications are nearly endless, but many have been cautious due to market and regulatory concerns. Early companies produced toys that had some basic ability to do minimal autonomous activities. They were also expensive. Even today, most of them do nothing more than fly around a camera and help a pilot not to crash. Although even then the results aren’t always pretty as evidenced by this wedding photographer drone running into the head of the groom.
On the regulatory front, the FAA has been incredibly slow (even for the government) in adopting new rules to govern UAVs. The FAA has been asked by Congress several times to open up the skies to these technologies, but has been dragging its feet. Despite this,we believe the timing is right for mass adoption of this technology and that the applications are valuable even before the FAA acts on this issue.
3D Robotics (3DR) is producing the hardware and software behind many of UAVs on the market today. Whether they are hobbyists or commercial uses, 3DR is building the core technology behind these vehicles along with developing the largest open source community in the field. The company is also creating its own line of vehicles as well. 3DR is targeting uses that don’t need FAA approval and where people are willing to pay substantial money for the data acquired by UAVs.
The company was founded by Chris Anderson and Jordi Munoz. We are very excited to work with them.
Our Investment in LeadPages
We’re excited to announce today our investment in LeadPages. Based in Minneapolis, Minnesota (our first MN investment!), LeadPages is the easiest way to create and split-test landing pages, launch pages, sales pages, webinar registration pages, and other conversion pages.
It’s hard to overstate the importance of the web for generating customer leads. With hundreds of thousands of businesses competing for the attention of consumers across the web, the importance of web marketing continues to increase. There are numerous ways that companies drive traffic to their websites, and a large industry has evolved around the best marketing practices to drive that traffic through better content and marketing strategies and effective use of ad spending on things such as Google AdWords. However much less attention has been paid to the pages where those ads drive customers, and what they’re asked to do once they land on those pages.
LeadPages was developed to address this problem by enabling publishers to quickly and easily create effective landing pages that better capture customer information and convert website visitors into potential customers. To accomplish this, LeadPages has a library of customizable landing pages designed for a variety of customer interaction types – from signing up for a webinar, downloading a free whitepaper, to simply capturing names and contact information. Like anything related to online advertising, there is a massive amount of expertise involved in creating an effective landing page. Best practices not only change by industry but also by geography, target demographic, and a host of other factors. And because preferences change over time as people become exposed (and over-exposed) to today’s designs, these best practices are constantly changing. Because LeadPages captures data on every interaction across their network of pages (LeadPages generally hosts customer pages on their own network), they are in a unique position to help their customers make data-driven decisions on the best landing page for their specific purpose and to allow them to continue to optimize for traffic conversion over time.
In addition to the easy creation of landing pages, LeadPages also allows their customers the ability to push customer information generated through LeadPages to a number of different platforms – for example CRM systems and email marketing platforms. This functionality is quite powerful to marketers, who generally have to manually enter information into various systems, or deploy engineering resources to automate the data integration between systems.
Ultimately, LeadPages’ aspiration is to power better marketing across the web. We’re excited to have Clay, Tracy, Simon and the entire LeadPages team join the Foundry family in pursuit of this goal.
