AngelList

I’ve seen a lot of questions about USVC, AngelList’s newest product. First, don’t invest in venture capital if you can’t afford to lose your money. Put your savings somewhere safer. But if you’re considering USVC, here’s a thread that answers the most common questions and explains how it works:

I spent the morning digging into USVC fees. TLDR: In my opinion, there is no lower-cost way to invest in VC other than becoming one. I’m expecting to pay the same or less than it costs to invest in a good VC fund. And a lot less than investing in a fund-of-funds. All while getting the benefits of a fund-of-funds that can do direct, secondary, and fund investments. Carry. If USVC invests in a fund or SPV, I will pay that manager’s ~20% carry. That’s what I expected. All fund-of-funds do it this way. I’m glad to pay carry to invest with good managers. USVC doesn’t charge additional carry. Direct investments. There is no underlying carry on USVC’s direct investments and they aim to make this a major portion of the portfolio. This would bring down the blended cost of USVC substantially, compared to a VC fund. Fees. The annual fee in the first year is capped at 2.5%. This includes the fees of the underlying funds that USVC invests in, which is a huge deal. Just investing in a VC fund costs 2-2.5% a year. Also, the fee would be 3.6% but AngelList is subsidizing it in the first year. There’s a possibility the annual fee could go up in the future and I’ve told the team that this is extremely confusing and weird, and they are working on it with haste. Overall, I’m expecting to pay the same or less than it costs to invest in a good VC fund, but I’m actually getting access to a fund-of-funds that can do direct, secondary, and fund investments. A typical fund-of-funds charges another 1/10 (fees/carry) on top of the VC’s 2/20, for a total of 3/30. Some other things I learned: Early-stage. Early-stage deals are planned. I would rather invest now in case those early-stage investments get marked up quickly. These deals will be riskier and more illiquid, so there’s no free lunch here. The current portfolio includes late-stage (OpenAI, Anthropic, xAI) and mid-stage (Sierra, Vercel, Crusoe, Legora). Illiquidity. This is venture capital. The underlying investments are illiquid. Don’t invest if you’re uncomfortable with illiquidity. That said, USVC is working on redemptions of up to 5% of the fund every quarter. It’s not guaranteed, but if it’s offered, you can choose to get partial liquidity along the way. International. There is a lot of demand from international investors. USVC is not yet set up to accept international investors at scale, but they’re working on it. Sales load. There is no sales load. USVC is only available on usvc dot com and the sales load is waived if you buy through the site. In the future, brokers that list USVC may charge up to a ~3% sales load; that’s how they make their money. Disclosure: I’m a co-founder of AngelList and have shares in the business.

An early employee joins a promising startup. Works hard, takes below-market salary, vests their equity over four years. The company grows from seed to Series D and hits a $2B valuation. On paper, their shares are worth life-changing money. They can't sell. No IPO in sight. Not because anything went wrong. Not because the company is failing. The regulatory architecture governing private securities resales was built for a different era. One where companies either went public within a few years or stayed small. That world no longer exists. In 2019 I proposed a rulemaking to the SEC for stage-appropriate liquidity, a self-executing resale safe harbor I called a "Qualifying Private Sale." The core problem hasn't changed. If anything, it's gotten worse. The SEC's Spring 2025 Unified Agenda puts Rule 144 reform on the docket for April 2026. The timing is right. The roadmap exists. New piece on what the fix actually looks like:

Carry has been acquired by Angellist and Lettuce We started this company 3.5 years ago to help business owners make better financial decisions These two transactions allow us to continue to do this important work in a bigger way Thank you to everyone who supported us ❤️