AngelList just closed a $25M fund to back startups based on hiring velocity

• ByStartupStory     |    December 23, 2021

Over the past year, AngelList has grown from a platform that connects angel investors with startups to an end-to-end suite of tools, working on everything from fund operations to founder cap table management. Throughout this growth, the company has quietly amassed millions of data points that show appetite, both from investors and regular employees, for burgeoning startups. And, per SEC filings, AngelList isn’t letting those fresh insights go to waste.

AngelList has quietly landed $25 million for the AngelList Early Stage Quant Fund, a new investment vehicle that plans $250,000 checks into over 100 companies. The largest limited partner in the fund is WorldQuant Ventures, an early-stage investment firm connected to a quantitative asset management firm. Other investors in Quant Fund include Two Sigma Ventures, KAMCO Ventures, Plexo Capital, Tom Tunguz of Redpoint and AngelList founder Naval Ravikant.

The operation, part of AngelList Venture, will be led by a four-person data team from within the company. In an interview with TechCrunch, Abraham Othman, head of the investment committee and of data science at AngelList Venture, explained that Quant Fund’s mission is to use more quantitative factors to decide which startups to invest in.

“If you think about quant investing in venture, there’s a lot of understanding around the metrics that drive SaaS startup success, particularly B2B startup SaaS,” he said. “It is vastly different for other sectors.” His team tracks the velocity of hiring demand for a startup, looking at how many job applications a single company gets within a specific period of time. The signal strips out factors like investor bias, the founder’s networks and even buzzy valuations.

“I do think, in general, one of the aims of AngelList as it moves forward is to manage more institutional capital,” Othman said. “We are taking advantage of some of the data” the platform already has. Other than AngelList’s access fund, a smaller investment vehicle, this is the company’s first, more traditional-looking venture fund.

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