autopilot.fund — investor memo
Are you an accredited Investor? 🤔
Join iconic LPs like Naval Ravikant, Elizabeth Yin (Hustle Fund), Jared Fliesler (Matrix, Square), Evan Moore (Doordash, Khosla), Wayne Hu (SignalFire), Saurabh Gupta (DST), and others who have invested in the the fund. Second & final close is happening now. Email us at email@example.com if you have questions!
Invest here 👇
AngelList creates tools for startups, investors, and fund managers to accelerate innovation.
Why should you back us?
A proven track record (10 unicorns, 6x+ TVPI over 8+ years)
- Hari and Adam have invested in Seed / Series A of Notion, BetterUp, Rippling, Mercury, Checkr, Human Interest, Ginkgo Bioworks, and others.
- We’ve co-invested with — sometimes ahead of — tier 1 VCs (Sequoia, General Catalyst, Founders Fund, Craft Ventures), and iconic angels (Naval Ravikant, Elad Gil).
- Amongst Seed / Series A companies where we invested >3 years ago, ~15% have become unicorns.
- We are very high conviction and put our money where our mouth is; almost 20% of the fund’s capital is either our personal capital or recycled management fees.
AngelList’s analysis pegs our personal investing on par with a 96th percentile VC fund:
Now that’s not perfectly apples-to-apples, because personal angel investing doesn’t have fees. So to be intellectually honest, we re-did the analysis adjusting for fees & carry, and our track record would still constitute an 86th percentile fund:
Obviously, past performance is not predictive of future returns; but needless to say a strong prior track record is better than none at all :).
A timely thesis, with a massive TAM and “GP-Market” fit
- In our personal angel investing, we’ve had a bias for “system of record” or “API for X”.
- Those categories just got a huge tailwind: these products are the best training ground for AI.
- In the coming years, the best B2B SaaS companies will:
- harness this advantage to weave in AI as a core attribute, benefiting from their intentional approach to data structures & models
- own the interface given they are the “application layers” (either as UI or API interface)
- In our view, these companies will be the best way to invest in the AI wave; but it still remains an overlooked opportunity.
Terrific deal flow and strong networks
- We’ve raised from >400 investors, invested in >100 companies, worked with >200 high-caliber startups as customers
- We’ve served as an advisor to AngelList, On Deck, Equi; mentored at the Founder Institute.
- We’ve already made a number of investments in standout companies, from this fund (which you’ll get exposure to, even if you participate now)…
Want to learn more? Check out our deck:
What is the GP commit?
We believe in startups. We believe in best-in-class founders, builders and operators. And so, we put our money where our mouth is:
- The GPs will invest at least 3% of the fund’s invested capital, possibly as high as 5%. Currently, GP commits are at ~6% of the invested capital.
- In addition, 50% of the management fees of the fund will be reinvested.
- In total, 17-20% of the fund’s committed capital so far is from GPs and reinvested management fees. About as high conviction as you can get!
How do you identify great founders?
Hari: 🙇 When talking to a potential portfolio company, I care about depth:
- the mind maze: how deeply do they understand the problem, exhibit founder-market fit?
- the moat: how deeply is the product embedded? Is it an “API for X”?
- the motivation: how deep is the founders’ passion & determination?
Adam: 🤽 I back founders who are passionate and nuanced, detailed and clear. I often meet with founders to give them feedback on their product, strategy, and go-to-market. I've found that these candid brainstorming conversations are far better than a pitch, and it's led to the large majority of my investments. The edge in my investing philosophy is to have a founder to founder discussion, not a founder to investor pitch.
What is your approach to portfolio construction?
The target size for this fund is $5M. We expect to invest $100K+ in 30-40 Seed & Series A companies.
- This may range from $50,000 to $250,000, depending on round dynamics.
- In addition, a small portion of the fund (~20% or less) will be deployed into “scout checks” of $10-20,000, typically into Pre-Seed & Seed rounds.
- We think many of these will produce outlier returns; for example, a $20K seed check in a company that exits at $5B is $5M (adjusted for dilution!).
- That said, the smaller check size means signal is that the company is compelling but not yet derisked; so the goal is to learn more and potentially double down later.
Follow-on investments will be made on a case-by-case basis
- Follow-ons will rarely make sense for Conviction bets. If we already have significant exposure in a company, we'll rarely make follow-on investments. For example, if a $25K check has 20xed by the next round, an incremental $50K check may not materially alter the return profile of the fund (in such cases, it would make more sense to deploy it into a fresh opportunity).
- However, we expect that we will double-down on many scout checks in later rounds
What will the fund structure, capital call and vehicle cadence be?
- The fund will be administered by AngelList, and follow a standard 2% management fee and 20% carry structure.
- The capital will be called at once at the outset.
- We began deploying the earliest checks in late 2021; we expect to deploy this fund through the rest of 2023 and 2024.