AngelList, We’re Breaking Up

A Critical Look at Platform Practices

In the vibrant world of venture capital, platforms like AngelList have been pivotal in democratizing access to investment opportunities and resources for startups and investors alike. However, the relationship between venture capitalists and AngelList is becoming increasingly strained. As a venture capitalist focused on nurturing early-stage startups, the growing frustrations with AngelList’s practices compel a reevaluation of its role in the investment ecosystem.

One of the primary grievances is AngelList’s aggressive marketing tactics targeted at limited partners (LPs). By directly marketing to LPs brought to the platform by general partners (GPs), AngelList not only undermines the GP-LP relationship but also dilutes the value that GPs bring to the table. This approach strains the GP-LP dynamics, essential for the symbiotic success of venture capital endeavors.

Equally contentious are the fees imposed by AngelList on its fund management services. These fees are notably higher than those of competitors, placing funds at a competitive disadvantage. In a domain where margins can significantly impact performance and attractiveness to LPs, such cost structures question the platform’s alignment with the interests of its users.