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A new class of angel investors is getting the opportunity to support early stage tech startups.
On Wednesday, New York-based SecondMarket announced that it is partnering with AngelList to let qualified investors on its site invest in companies raising pre-Series A rounds of financing. According to SecondMarket, startups will be dual-listed on both sites to enable its investors to invest as little as $1,000 in a company.
“Historically speaking, angel investing has been very inefficient and it has been very, very opaque,” SecondMarket founder and CEO Barry Silbert said in a video explaining the new partnership. “We’re changing that by democratizing investing by enabling an investor to invest a small dollar amount into these companies. Plus, by investing across a broad range of companies, they get a diversified portfolio of investments.”
SecondMarket, which has traditionally supported trading of secondary shares in private companies, declined to share how many AngelList companies would be participating in the partnership. But it said that companies would include those in a range of industries, including finance, education, science and advertising.
As part of the deal, SecondMarket said it will create a dedicated fund for each company that will purchase shares in the startup, creating an indirect ownership stake for its users.
The partnership comes at an interesting time for both companies. In the past few months, SecondMarket, which lost a big chunk of its commissions after Facebook’s IPO, has been adding new options for investors, including the ability to invest in new asset classes, like digital health and film. And, last week, TechCrunch reported that AngelList is raising a round of financing for itself at a valuation some say could exceed $150 million.