Celebrating One Year of Rolling Funds

My LP commitments have consistently grown by over 30% per quarter for the three quarters I’ve operated my Rolling Fund. Currently, I’m able to invest $2.7M per year.

We love the Rolling Fund model where you can start small and iterate, and where the LP ranks can be filled with people who are very strategic for you and your portfolio. And it’s crazy how much lower-friction AngelList makes the process and costs to get going vs. a traditional fund.

Rolling funds have enabled me to be much more efficient in backing transformational companies, freeing up more time to find the unicorns. They have also opened up rapid, efficient two-way communications with LPs at scale. It's exciting to see this much LP growth every day.

Rolling Funds have helped us realize our mission of increasing the number of successful startups in the world — while also giving more people the opportunity to participate in the venture economy.

What the Data Tells Us

Rolling Funds scale quickly

Rolling Funds help GPs scale capital fast. Within 30 days of launch, the average Rolling Fund on AngelList scales up to $350K in quarterly LP commitments. That’s $2.8M worth of commitments over a two-year deployment period. Most of these are long-term commitments — meaning they’re one-year or longer commitments, with the potential for increasing contributions quarter-over-quarter.

Six-figure check sizes into startups

The average check size from a Rolling Fund into a startup is $100K and the largest check size from a Rolling Fund into a startup was $1M.

This fast ramp in capital is made possible by our infrastructure, software, and team of venture experts. AngelList can handle every key element from fund formation, legal docs, and taxes to wires, distributions, and reporting.

Power to GPs and LPs

Rolling Funds have changed the way both GPs and LPs approach early-stage venture investing. Here are a few ways we’ve seen our GPs use the product to improve the fundraising experience for themselves and their LPs:

• Unlike traditional venture funds, Rolling Funds utilize SEC Rule 506(c) of Regulation D, which means they’re publicly marketable. We’ve seen GPs use this rule to raise capital from their professional networks via social media, paid media, and other channels. With a single tweet, the LP network comes to them.
• LPs who join a Rolling Fund a few quarters after inception don’t have exposure to prior investments. If you accept an LP after the portfolio has had a markup in a traditional fund, the LP often still gets exposure to the entire portfolio, including the markup. With a Rolling Fund, each LP receives exposure to the investments made only in the quarters they are subscribed.

The Future of Rolling Funds

The past year has shown us that Rolling Funds are now a permanent fixture in venture. Our focus over the next year will be to further scale capital behind each of these GPs and build features to help with dealflow.

To learn more about Rolling Funds, join me at 3 pm PST / 6 pm EST for a Twitter AMA. I’d be happy to go in-depth on any questions you may have related to Rolling Funds.

It’s been a stellar year. We’re excited for what’s coming next.