AngelList Harvard Case Solution & Analysis

In early 2010, Naval Ravikant and Babak Nivi posted a list of angel investors on the Enterprise Hacks website as a resource for creators looking for financing prior to seeking venture capital. The list rapidly evolved into AngelList, a separate matchmaking platform for investors and founders to make early stage fundraising more efficient. By June 2013, AngelList had garnered significant media attention, and was used by many high profile angel investors and venture capitalists. It had approximately 100,000 startups and 18,000 accredited investors.

Since the site was established, nearly 40 startups on AngelList had been got, and over 2,000 startups had been financed. The site added Invest Online, a new product that in partnership with SecondMarket, allowed accredited investors to make modest investments-as low as $1,000-in startups at the same terms as larger investors. Ever since the site was introduced, almost 40 startups on AngelList had been purchased, and over 2,000 startups had been financed. For most of the entrepreneurs, posting an outline on AngelList had develop into as commonplace as setting up a personal summary on the Facebook or LinkedIn.

Most lately, the site added Invest Online, a novel product that in partnership along with SecondMarket, permitted accredited investors to make minute investments-as low as $1,000-in startups at the same stipulations as superior investors. While the co founders were proud of the increase of AngelList, as of June 2013, they had really not yet determined its business model and were not charging for its use.  Ravikant and Nivi speculated if they must reassess and have AngelList relate to broker dealer status so it possibly will charge operation fees, but they were hesitant to enter what they considered a regulatory minefield.  Around crowdfunding the JOBS Act that was recently passed was expected to loosen restraints, and Nivi and Ravikant understood that will be a legitimate expansion for AngelList. Ultimately, they wondered if they need to avoid any possible regulatory issues altogether and instead focus on creating revenue primarily from recruiting and other ancillary services.

PUBLICATION DATE: September 25, 2013 PRODUCT #: 814036-PDF-ENG

This is just an excerpt. This case is about INNOVATION & ENTREPRENEURSHIP

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