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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.