Our First FG Angels Investment in OnTheGo Platforms Has Closed

What better way to start off a new year than by closing a new investment. This morning we announced that we have closed a financing in OnTheGo Platforms via our FG Angels syndicate.

On October 1st, 2013 we announced that we’d be forming an AngelList syndicate called FG Angels and making 50 seed investments through AngelList by the end of 2014. We committed $2.5m from our Foundry Group funds for this effort and decided to max out the syndicate at $500k / investment, or $25m total. So $2.5m would come from us and $22.5m would come from syndicate participants.

We knew we had a lot to figure out around how the AngelList syndicate would actually work. We also knew that AngelList had a lot of work to do to get all the software and legal dynamics working properly. We’ve spent the last three months working with AngelList, our lawyers (Cooley), and a few other experts to make sure everything was set up the correct way. It was much more complicated than we expected, and we’ve learned a lot more about 506(b), 506(c), what the JOBS act made better, what the JOBS act made worse, and the general insanity of unscrambling new government regulations that purport to make thing easier, but actually make things harder.

But we’ve figured it out. And are psyched to have led a seed round in OTG Platforms. We’ve also got a healthy AngelList syndicate called FG Angels ready to roll. And we’ve got a second investment in the final stages of closing and a third one getting ready to launch. We expect to be in a 2 – 4 investment per month tempo for Q1.

The OTG Platforms gang has been incredibly patient with us. We were originally planning to announce things at the Defrag Conference in November but at the last minute realized that we’d blow all the 506(b) exemptions and generate a huge pile of work for everyone, so we held off until things closed. As we ran into issue after issue with the AngelList syndicate process and docs, they hung in there patiently as we worked it out, being willing to be the test case. They are just an awesome team – exactly the kind of people we love to work with.

The AngelList gang was equally amazing. We’ve loved what they are up to from the beginning. I’ve given Naval and Nivi lots of feedback over the years and have been active on a few non-tech angel investments through AngelList. We knew going in that the AngelList Syndicate process was a new thing and figuring out how to do it correctly, via a VC fund, was going to be a challenge. But we’ve mastered it and the AngelList team continues to be well ahead of the curve on all fronts.

Over time I’ll write more about what we’ve learned and what the issues are. But for now, congrats to OnTheGo Platforms – we are psyched to be partners with you. And thanks AngelList.

  • Allan Eshuijs

    Congratulations on your first FG Angels investment and I’m very excited to hear more about your Syndicate experiences!

  • Felix Dashevsky

    Congrats, and happy to be part of it.

    • Allan Eshuijs

      Congrats Felix!

  • Atai Konushaliev

    Congratulations FG and OnTheGo team and Happy New Year! =)
    P.S. I would be very happy if ‘Miki’ also will become one of the first startups in FG Angels investment list.

  • http://www.startupmanagement.org/ William Mougayar

    Congrats! Can Syndicate members opt in/out of certain deals, or it’s all-in commitment?

    • http://www.feld.com bfeld

      Right now it’s still deal by deal.

      • http://www.startupmanagement.org/ William Mougayar

        that’s more flexibility and better, no?

        • http://www.feld.com bfeld

          Some pros and some cons. Right now it’s all still pretty fluid.

  • http://coachwizard.com/ falicon

    This is really interesting to learn…was this a deal that initially came through Angel List or was it via another conversation that you moved into Angel List to complete?

    I, with a lot of others I talk to, are still trying to figure out just when Angel List really makes sense in the process…while they do seem like they could be good long term, syndicates are yet another puzzle piece for us to figure out when trying to raise money.

    So really looking forward to hearing about all that you’ve learned from the process/work…and hopefully you’ll share some details of the story from the other side of the coin too (ie. the OnTheGo Platforms side of the story).

  • http://www.semilshah.com/ Semil Shah

    Brad, any quick advice or tips for me on how to best use an AngelList sidecar for my fund? I’m designing Fund #2 now (Fund #1 closed), and have some syndicates lined up, but am trying to find the best structure as I’m managing funds, not my own. Thanks.

    • http://www.feld.com bfeld

      I have a huge amount of advice and suggestions. I’ll be blogging some of it soon. How urgent is your timing?

      • http://www.semilshah.com/ Semil Shah

        Some time this month…I’ve done a bunch of research and been talking to Naval…main concern is that since my fund is relatively small, I don’t want to dip my toes into a pool of spiraling legal costs. That said, I have a number of people who have already committed to my Syndicate and more waiting, so the amount could be considerable.

        • http://www.feld.com bfeld

          Feel free to email me details and we can go back and forth that way for now.

  • http://www.EyeOnJewels.com/ Darius Vasefi

    Congrats Brad and OTG team. I met the team at Defrag briefly and very impressed, they’re definitely on to something big. Hopefully by the time of their next round I’ll be ready to participate as I figure out how to setup my own pool. And thanks for pushing thru and figuring out the syndicate process, it’s going to be an amazing tool.

  • drbillnye

    Hey Brad, quick question I’m guessing others will have as well, as I am part of the FG syndicate, is it proper etiquette to list myself as an investor in the companies crunch base profile or on angellist, or since I’m not doing a huge amount, would that just clutter up their data. How would you suggest the participants in the syndicate keep track of all the investments that are made?

    • http://www.feld.com bfeld

      Fine on AngelList. Probably avoid the other stuff.

    • http://erica.biz/ Erica

      Probably still no “right” answer to this as it’s all so new, but we closed investment through AngelList as part of Techstars, and the consensus was that investors investing through AngelList’s fund should not be listed as individual investors on the company AngelList page.

      The sense was that it would create confusion amongst both companies and other prospective investors, since we (founders) did not know the investors personally, and if other potential investors asked those folks for their opinion on our company, they might not be able to share the whole story. I also don’t have those folks on my investor email list.

      We spoke to AngelList about this and in that case, they requested to all the investors in that fund to not put themselves as individual investors on company pages. If you have a personal relationship with the company you’ve invested in, though, it still might be okay.

      tl;dr: Check with the founders of the company you’ve invested in–it may not be in their best interest to have you listed as an individual investor unless you know them personally.

      • http://www.feld.com bfeld

        Good suggestion on etiquette!

  • http://www.frivlink.com/ frivlink

    Some time this month…I’ve done a bunch of research and been talking to
    Naval…main concern is that since my fund is relatively small, I don’t
    want to dip my toes into a pool of spiraling legal costs. That said, I
    have a number of people who have already committed to my Syndicate and
    more waiting, so the amount could be considerable. http://www.friv2friv3friv4.com/