AngelList launches USVC, a public venture fund open to anyone with a $500 minimum investment

big day.

Big day. Break it down for us. What is USVC?

All right. Perfect. I'm going to let an break down what

we're working on getting a a four up. Just give us one second. We can just hang out. Great. Great. Great hair. Did you Did you just get a haircut?

Here we go. We got everybody. There we go.

There we go.

Yep. Got a haircut just for TBPN, you know.

There we go. I thought so. Great to see you guys. Welcome to the show. Massive day. Uh, anchor. It's It's been too long since uh last week since I've been here. Every every Wednesday afternoon blocked out. But no. Um, today's launch is really fun. I mean, we couldn't reveal that much last week, but really the last month has been gearing up towards this and um I think I think Naval mentioned it when he first started Angelist. This was such a big part of his vision of what this company could become and it's it's really fun to like finally get this out there.

Uh get let's get right into it. I

describing the product.

Yeah. Yeah. Let's talk specifically about the product this uh the you know everyone everyone is aware of the companies that are that are a key part of it but but um yeah talk about kind of the decision-m that that went into the product how it's how it's different than

uh other other products in the market all that stuff.

Cool. Um yeah so the idea with USVC is we wanted to open up access to the asset class of venture. Right now it's I believe it's very siloed. you need to know a lot of people. Um it's very very hard for most of America to have to have access to you know the place where most of the wealth is created. So that's the goal with USVC. Can we build sort of a highquality way to index into venture as an asset class? Um what's unique about this structure is there are a lot of private market ETFs. People may have seen the Destiny ETF, the Robin Hood ETF, all of that. The difference with this is that this is set up differently where it's a closed end tender offer fund which I mean sounds like a lot of heavy words but what it really means is when you're investing in this you're actually holding something very close to the underlying business. So the price of the price of what you pay and what you redeem at is roughly equal to the price of the underlying companies. It's not driven by FOMO or like markets being super excited or down. Um, and I think that is structurally very different.

I don't know if I've and you know, part part of the challenge with with some of these other products is they can have they can have great assets that make up the fund, but if you want to pay, but but it's hard to justify if they're trading at five, six, seven times NAV. It doesn't matter how good the underlying assets are. No good investor can kind of confidently say, "I'm gonna invest in this fund." Unless you truly think that the assets are kind of mispriced fundamentally by five or 6x.

Yeah.

Yeah. That Yeah, that's exactly right. I think you the way to think about USVC is it's meant to be a vehicle that you can think about over the long term. So rather than trying to think about am I getting it at the right nav, am I getting it higher or lower than it's valued, you can just trust that when you invest in USBC, you're getting it at the the right nav and you can hold it for the very very long term. Uh that's why we made the dec or that's why uh USBC made the decisions that it made.

So how do how do uh investors actually on board?

It's very easy.

So right now it's Yeah, it's very easy. I we'll get we'll get you all to invest soon. But it's uh fully self-s served us.com.

Uh it's been Yeah. And that's sort of been the innovation here. Like historically, these types of funds required people to be accredited investors,

but now access is truly open to anyone with as little as $500.

Mhm. Uh how are you thinking about uh number number of bets? It's it's uh open-ended. So, so it it sounds like uncapped, but is this the kind of thing where you want to I I feel like is it you want to concentrate on like 20 30 core positions similar to a venture fund? I imagine this isn't like you want to spray and prey at at at seed, but maybe you would if it's the right founder. How are you thinking about it?

Yeah. So, I can talk about portfolio construction. Um, you'll see a lot of the names we've gone out with today are the names everyone has heard of. you know, XAI, open AI, um, anthropic.

Uh, however, long-term, I think a lot of the long-term alpha is not even necessarily in these names. So, we absolutely will also start investing in a lot of seedstage companies. The idea is these are bets. It's not just about the next one year, but bets that will pay off in the next 3, 5, 7, 10 years. So about a third of the portfolio, the goal would be to have it skew early stage as well, just because we want to be finding these companies before they're actually discovered.

Mhm.

Yeah. So sim similar to a kind of a a platform VC where they're going to concentrate a lot of their capital into later stage established winners uh that are more stable and then you can still get exposure to the early stage of of super promising companies. That's that's very cool. Can you talk about the concept of direct ownership? How many layers of abstraction? I think that there's uh there's there's just like FUD generally among retail investors that I've talked to that they will see a name that they're excited about and then they will find a product that sort of proxies that name, but it's seven layers deep. It's very confusing and uh and and they don't really know how to process it. And mostly they're not even necessarily worried about fees or or anything like that. They're more worried about like I thought I owned SpaceX and then it just turned out I didn't. And we've talked to Matt Grim at Anderol about this. There's been all sorts

people promoting and SPVS that don't have

access don't have anything. And it's just like Yeah. And I think that I think that that messaging is important. So can you talk us through uh the like like how you think about ownership, what rights you actually do need, what rights you don't, how you think about uh get delivering exposure to the end to the end user or the end investor.

I'm going to let take this because Angelus as a platform has drawn the line on what they will expect as an SPV. So look, why don't you take this one?

Sure.

Yeah. Well, one of the unique things about USBC is that uh it it runs on Angelus. So, we're able to um uh have it take advantage of all of the infrastructure of Angelus. And one of the things I tweeted out a few months ago was Angelus as an example had banned all layered SPVS by default

for the reasons that you mentioned. In fact, when we did it, uh, we lost revenue because of it, but that's because we didn't know who the underlying owners were and we had no way to actually even trace it. And so, we banned it. So, in general, when it comes to the infrastructure that we're running at Angelist, uh, we are always thinking first and foremost about ownership of the underlying assets because we're running infrastructure for funds, STBs at scale. Uh so from that vantage point uh you can think of it as USVC in the way it thinks about it uh acquiring assets has the exact same ethos which is you want to only look at uh assets where you actually know where the underlying assets are coming from rather than these layered SPVS that have fees that are not disclosed and carry that's not disclosed. Uh that's something that uh we effectively banned from Angelist a while ago.

Makes sense. What is what is uh what is the pitch for founders? Why why should they take USVC money? I can give I can give reasons but uh how are you positioning it? I think I think that this is the most fun part and you're going to see see this soon where okay, you know, you'd argue that Anthropic doesn't really need more promoters right now, but we're going to be taking some bets on companies and startups that have very loyal, very passionate communities, but they may be a $50 million business, $100 million business, something in that range. And to them, it allows them a very scalable way to actually let their community share in the upside. And that's going to be one of the magical things here where it's not obviously an IPO or anything, but now we can have a vehicle for people to get their communities involved in their upside. And for most founders, it's, you know, generally pretty cool to be able to say, "Hey, by the way, if you are a customer and you want to participate in this, you can invest in USVC."

There's a $500 minimum. Is there a maximum?

There's There's no maximum. So, load load up load up load up the truck. What what happens if uh Elon, Sam, Daario, these guys are like, "You know what? I want to just team up with the other guys. Let's let's throw 50 billion collectively into each other's companies

through USBC."

Through USBC,

you know, let's just let's just all create a kettu. This is the Japanese way, correct?

You did you did strike something interesting that the nature of this fund is different, right? effectively it's an evergreen fund which means we can accept kind of unlimited amount of capital but from a deployment perspective every time that happens effectively we have you know we have to kind of come up with the strategy for that um so it's a very different structure

yeah uh how should investors think about the time horizon if you're if you're going I I've talked to people that have lpd into VC funds and they're like I don't even know if I'll see it before retirement I mean there's people who who got into like early rounds of SpaceX and they're and they're like 20 years into like it looks great on paper but I still don't have liquidity and that's a that that's a benefit but it's also a drawback and I think going in with eyes open is important but how should the investor should they think about this is 10 years journey or something that they're throwing in retirement bucket mentally or or or should they think about it obviously it's not something that they're going to be trading in and out of on a dayto-day basis but what's the right mindset to go into this So I'll caveat that this is not a liquid instrument, right? Like we've been told to repeat this is not a liquid instrument.

Yeah.

However, the goal with this type of structure is at our discretion. Um things are looking good and this is our goal. We will have up to 5% of the fund available for a redemption every single quarter.

Sure. So the idea is that people theoretically once we get into a good rhythm can kind of pick and choose for how long they want to be a part of this journey.

Sure.

Um again it's not the most liquid instrument but from a timing perspective there's it is you know people can kind of come in and come out. However, you know only through quarterly redemptions.

Yeah that makes a lot of sense.

Very cool.

Anything else?

No this was great. I'm very very excited. This is the most angelist product ever I think. uh even though you guys are more than a more than a uh a decade in now, right?

Um and uh yeah, I'm excited to see where this goes. I I feel like I imagine you guys are going to be spending a little more time on the East Coast uh with this. I guess you're already over there,

Ancher. Uh

we're already New York and the West Coast, so we have good coverage.

The website is usc.com. There's a beautiful video of

Naval Rock. And I have no doubt we'll have many uh many of your new Port Co founders on the show.

So, keep us in the loop. Excited for it.

Great to see you guys.

Have a great rest of your day. Congratulations.

We'll talk to you soon.

Uh uh this this launch video is very funny because uh the there are clips of Naval and then there clips of Founders and the first uh the first clip sort of makes it look like Naval is talking to Steve Jobs. if you if you just have the sound off. Uh but what a what a fantastic portfolio. Uh go check it out at USVC. There are seven companies in the portfolio currently. XAI, Crusoe, who who's been on the show, Anthropic, Sierra Technologies, Brett Taylor, Lora, OpenAI, and Versel. You have seven different companies here representing. Uh go check it out. USBC.com. Well,

uh wow. Before we go into the breaking news next guest segment, I I'm trying to This hasn't been posted by

uh any any super reputable uh sources yet, but there's a number of sources saying that Toma Bravo actually according to Reuters is nearing agreement to turn software firm Adallia