In partnership with Accomplice, AngelList announced Spearhead, a $35M fund that funds and mentors founders with up to $1M of capital to back other founders.
Founders earn 15% carry, equipped with check writing authority, the support of angels in their cohort, as well as seasoned investors like Jeff Fagnan, Naval Ravikant, Cack Wilhelm, Elad Gil, Jake Zeller, and others.
Each fund is powered by AngelList Angel Funds to offload all of the legal setup, backoffice management, and expenses that go into setting up and operating a venture fund.
Why does this matter?
- Founders have the best dealflow. They are amongst the action, the grassroots of the ecosystem and are often the first to know about who the new (interesting) companies are sprouting up around them.
- The previous attempts by the venture industry to tap into this knowledge has largely revolved around the venture scout model. However, Spearhead provides prospective investors with a greater autonomy and direct capital, something that typically lacked in the more traditional venture scout model.
- A lot of Founders want to give back and eventually invest but don’t have the required time or capital while they are still running their company. This provides them with an easy vehicle to start doing this, while not requiring their full capacity (largely due to the back office being taken care of by AngelList) and enabling them to start giving back and build a track record.
- Ultimately, and why I think this matters so much, is that by providing founders with the tools and capital to start investing before they exit this accelerates ecosystems by putting additional knowledge and capital to work now.
A lot of this thinking also formed the “why” of my own Angel fund
: Also raised with AngelList)