The development of the AngelList online syndication model in equity crowdfunding and its effects on venture capitalism and the seed funding industry

AngelList developed online syndication to enable lead investors to collect backing investments from other individuals and professional investors. Online syndication, as part of equity crowdfunding, was expected to answer some fundamental issues of seed funding and possibly contribute to the disruption of the crowdfunding industry. However, we observed that there is a shift in the platform's strategy towards institutional investors and that the platforms that was once believed to embody the future of equity crowdfunding follows another direction to go away from crowdfunding. It is becoming a back-office platform for traditional investors and focuses on new markets, outside of funding. We argue that AngelList is going beyond a new form of equity crowdfunding to develop a digital solution that will bring online a wider concept and aims at becoming the startup platform, across all its non-core needs. However, this will require AngelList to cross-boundaries, and the Boston case example shows that the platform is not there yet from the geographical point of view.

Department dc:contributor.department

Sloan School of Management.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2017

Authors dc:creator

• Etienne, Alain, S.M. Sloan School of Management
• Geha, Andre

Advisor dc:contributor.advisor

• Christian Catalini.

• Sloan School of Management.

Statement dc:rights

• MIT theses are protected by copyright. They may be viewed, downloaded, or printed from this source but further reproduction or distribution in any format is prohibited without written permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/111459

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/111459