Traditional angel investing requires post-tax cash to invest and requires extensive efforts to generate deal flow, meet founders, conduct due diligence (typically on your own rather than with the benefit of a circle of other potential investors), persuade companies to take your money, and maintain relationships so they are not merely a financial transaction. With FounderPool, you’re leveraging your illiquid equity, for diversified exposure to other great startups easily, and you get the benefits of a community of aligned entrepreneurs who are invested in helping you build your own company. In addition, most small-scale (syndicate) angel investors don’t have deep ongoing relationships with the companies (indeed often are prohibited from even identifying themselves to the company), and don’t have a shared mutual interest (the companies aren’t endeavoring to help the investor’s own company). Larger-scale angel investors can sometimes build that type of community, but even then it’s usually one-on-one with the angel and the companies, not an entire collective community advancing the entire group as a whole. And to achieve that as an angel with twenty companies would usually require $500,000 to $1,000,000.
That said, if you are an experienced angel investor, we think that participating in a pool can be an important part of your portfolio and help contribute to your dealflow and your own success.