AngelList gets spin-off $400M fund as Chinese investors go after seed-stage

AngelList, an platform that connects investors and startups with a track record of investments in startups such as Uber, is set to announce a deal today with a Chinese private-equity firm – CSC Venture Capital, involving a $400 million fund called CSC Upshot. According to the report, AngelList will inject about $20 million from the new fund in the first year, moving up to $50 million per year thereafter.

Naval Ravikant, the founder of AngelList notes that excessive liquidity in the investor space and financial markets generally could lead to a bubble.

“We want to be able to make sure that we can allocate capital we have”, he said. The fund will also, of course, be used to invest in new start-ups as well. Prior to this deal, AngelList had raised a total of $205 million – or about half the amount represented by the new funds. These “leads” can then decide whether to help fund the young company, and encourage other investors in their syndicate to do the same.

If you’re unaware of what “syndicates” are, they are actually a newly coined model by AngelList, which helps socially active and well-connected angel investors pool in more money by spreading up in their personal network.

According to The Business Insider, start-ups are evaluated by 165 different angel investors, or “leads”, who look after a group or syndicate of other investors.

Headquartered in the USA, Upshot’s fund follows the trend of Chinese investors getting into US companies earlier and earlier.

Richard Chen, a partner at Beijing-based VC firm CeYuan, predicted this summer that more money will shift to younger companies.

Ravikant said if all goes well, there’s more money where the $400 million came from: “It’s pretty clear more capital is around”.