Crowdfunding and venture capital have, historically, existed on opposite corners of the startup finance playing field. But these opposites are increasingly acknowledging the benefits of each other’s business models, and are even starting to realize they might be better off working together, taking the best that each of them have to offer and creating a new fundraising reality.
The Venture Capital Index Fund, conceptually similar to the S&P 500 or the Dow Jones Industrial, is a diversified portfolio of early-stage startup investments, many of which have been backed by some of the most respected venture capital investors in the country. With the Index Fund, accredited angel investors will be able to make the same investment plays that elite, professional, sophisticated venture capitalists make.
“We have created the next generation of the early-stage venture firm -- one that is scalable and online,” says Chance Barnett, CEO of Crowdfunder, in a statement announcing the partnership. “By combining the Fund and our online platform, we’re allowing investors to access both direct online investments into single ventures, as well as broader diversification into a portfolio of hundreds of VC-backed startups.”
Deals in the fund include those backed by prestigious venture capital firms such as Andreessen Horowitz, Google Ventures, Kleiner Perkins Caufield & Byers, Techstars, Union Square Ventures and Y Combinator.
For Crowdfunder, the Fund is bringing savvy investors with deep pockets to the platform. For the participating venture capital houses, Crowdfunder is bringing unprecedented diversity of investments and reach into the startup scene. After all, a unicorn is only born after scores and scores of donkeys.
Wednesday’s announcement follows immediately on the heels of news from earlier in the week that New York City-based venture capital fund Collaborative Fund -- an early investor in Kickstarter, Lyft and Reddit -- will partner with San Francisco-based equity crowdfunding company CircleUp to launch a $10 million fund. Called Collab+Consumer, the fund will go to early-stage, mission-driven companies in the consumer products and retail industry.This week’s intersections of the crowdfunding and venture capitalist industries foreshadow increased participation between the once-upon-a-time rival mechanisms of accessing capital.