Inside the Platform Powering +$171B in Private Capital, with AngelList CEO Avlok Kohli

Hi, this is Lex, and welcome to the FinTech Blueprint. It's your podcast about fintech, decentralized finance, digital banking, investing, robo-advice, artificial intelligence, and all the other frontier technology that is transforming financial services. To get more content, like an illustrated transcript of this conversation in your inbox, subscribe at fintechblueprint.com. So without further delay, let's jump into today's episode. Hi everybody, and welcome to today's podcast. I'm thrilled to have with us Avlok Kohli, who is the CEO of AngelList. I'm guessing that everyone in the audience knows of AngelList, but we're going to explore what AngelList is today and the transformation of the company over the last 5 years. With that, I'm really excited to have Avlok on the show.

Great. Thanks for having me. Excited to be here.

So let's start with the easiest and the hardest question. What is AngelList?

It depends on the year that you've heard or used AngelList. So today, AngelList is the go-to fintech platform for GPs that are looking to raise or scale their fund. We have had been focused on venture, but now we are in private equity, crypto, and all of that. So that's in a nutshell what AngelList does today. The history of AngelList actually goes all the way back to 2010, where it really started off as a place for startups to come raise capital from VCs. And that was the original idea.. And through the years went through several pivots. And, you know, from 2010 to 2019, there were several pivots and explorations. One was actually a syndicate platform that was basically the ability for someone to create an SPV and raise from multiple investors. There was a talent platform, which is what most people actually knew AngelList back in, you know, before 2019, and then had also acquired Product Hunt as well. So they're kind of the 3 core pillars, if you will, of AngelList from 2010 leading up to 2019. In 2019, I came in and I actually took the syndicate part of the platform. It was a small part of the platform and actually spun it out because it had the makings of a, of a potential fintech. And think of that as a new founding moment for the company. And we ended up scaling that piece out. And so we went from syndicates to small venture funds large venture funds to— we invented whole new products like rolling funds and roll-up vehicles, and we just kept innovating. And that actually was the new founding moment for AngelList. And we grew that from 2019 to where it is today. And the other parts of platform, the talent business and Product Hunt, were separated. So talent— the talent business is now called Wellfound. And then Product Hunt is still called Product Hunt, but it's run separately with a separate CEO.

That is a hidden story that I think a lot of people don't know. My personal memory of AngelList is it's a list of angels on the internet. I think Naval founded it in kind of early Web2 days. I remember for a company I founded called NestEgg, which was an early robo-advisor, I tried to raise some money on it and I spent a week polishing PowerPoints and putting in different things into the interface. And then kind of the magic trick was that once you hit publish, Naval would personally take that information and send it to a bunch of people in the network. And I remember that email in my inbox. It was like such a surprise, you know, that you had that personal handcrafted attention. Why wasn't that enough? That's a great product. I'm sure that community had grown quite a bit. Was there anything in that model that didn't click, or why do you think the company needed to keep searching for these different ideas?

So it turns out when you announce to the world that you can come to a place like AngelList to raise capital, in the beginning it's great. You get a lot of very high-quality founders, high-quality startups. But when it works, which it did, and famously Uber actually raised their first round through AngelList, when it works, you have everyone that shows up. And so the ability for someone like Nibal or Nivi, who's the other co-founder, to hand review everything, handcraft everything, and send it out and really pay attention to every single startup coming in. It just goes down. There's not enough attention, not enough time in that day. And when everyone shows up, the signal-to-noise ratio actually gets lopsided. What that means is you had a lot of startups that showed up that weren't high quality, and couldn't really raise that capital, but it just inundated all the entire platform. So it just didn't scale, right? So that concept from one side of the market actually worked extremely well. Startups loved it, they showed up. But from the other side, it wasn't— the, the signal went down over time, and it was a lot harder to parse out which company is worth paying attention to versus not. Now, one way to address that would be a Y Combinator-style model where you literally interview every single— or you interview most of the startups that apply, and then you let in a small percentage. But that wasn't the core DNA or the core model of AngelList. It was really focused on building software to scale a product. And so from there, what ended up happening was the syndicate model was born. It was, well, if the people in the company can't parse the signal, can't review every single startup. What they can do is they can actually have a syndicate lead, so someone who is going to put their own capital in, an angel investor, and they'll effectively say, hey, I'm tying my capital to this company, now you can come behind me. And so that was a solution to actually address the signal-to-noise problem as the user base started scaling.

So I think this is actually endemic to a lot of crowdfunding. Not that AngelList is straight crowdfunding, but you do have this lemons problem, you know, in early crowdfunding platforms, you know, the more projects you get, you start getting lower and lower quality because there's only a small percentage of the long tail that's good. And then similarly in copy trading platforms, another comparison, you have the same issue. So you think that syndicates is a good way to address it?

Yeah, so syndicates ended up being a really good way to address that for the early stage startups. And this was, again, this was in a different time when syndicates was originally launched, which I think was actually around 2016 time. And the reason it ended up being a good way to address it is it forced someone to put skin in the game, right? They had to put capital behind something. And when you're forced to put your own capital behind something,, then other people are more likely to listen to you. But that's just one sort of signal. There's another sort of signal within syndicates, which is who is the lead investor? Like, is there a larger venture firm also coming into the deal, leading that deal? Now, that's not always there, but when there is, when it is there, that's another form of signal. And so you can think of it as hierarchies of signal that other LPs, people who want to invest in that deal, actually listen to. So one is, of course, the syndicate lead who's going to be putting their own capital in. Then the other one is who the lead VC is, and they're going to be looking at that as well. So think of it as a hierarchy of needs as a way to solve the whole signal-to-noise problem. And I, I don't follow any of the other platforms super closely, but if I were to just unpack the crowdfunding, which is a completely different class— it's actually even from a regulatory structure is very different in how it works. The problem with crowdfunding is there is no signal, right? You can have anyone that goes there, goes to raise capital. And so it suffers from the whole signal-to-noise problem, and there is no skin in the game there. You don't quite know who's actually putting significant skin in the game. So when you're raising capital from a crowd, you don't have the same type of signal that you have when you're in traditional VC, right, which AngelList plays in.

It's interesting to go on this tangent as well because Coinlist was, I think, a spinout of AngelList, if I'm right. And they definitely went all in the crowdfunding direction and into crypto, which combines sort of as retail, a broad access as possible. But you think that the kind of the lemons problem is too strong or like it doesn't scale into quality.

So crypto, is a little bit of a different asset class in the way the projects come together since it isn't just about security. Sometimes in crypto, it's about you want to create the community because you have a particular token for your project that behaves differently from, let's say, securities, which shares in your company. And with crypto and crowdfunding, the need sometimes on both sides of the equation the token issuer as well as the receiver, they're doing it for something beyond just issuing securities and engaging in that way. And so there you'd still suffer from the same issue. It's not that you don't, and you can kind of see this, right? You can actually see it in all the tokens that are getting— that are out there, and you see some small percentage actually get listed by Coinbase and by the exchanges. Now with CoinList, CoinList does have a quality bar, so they do review and evaluate which ones to bring on, even for the crowdfunding side. But I would say crypto relative to venture investments, it does behave differently. And sort of the backstory here with why Coinlist ended up being a spinout— this was before 2019— is in the original crypto boom, what, what ended up happening was there's a lot of activity and excitement to come into these crypto projects. But the regulatory framework wasn't very clear back then. And the core venture platform, which was syndicates at the time, with an angel list, was pretty clear what the regulatory structure is, very clear guidance from the SEC. But with crypto, there was no clear guidance. And so there was, it was just an unknown risky proposition of, hey, we don't quite know where the regulatory framework will land.. And so it made sense for Coinlist to separate and actually be its own entity so it can actually go down its own path because it could have ended up bound a very different regulatory structure that doesn't look like the venture, you know, the ERA, it's called the exempt reporting advisor structure. So there was a regulatory reason why it made sense to separate the two entities.

You know, that original core of startups, Product Hunt, jobs for startup employees, you know, is like there's a lot of demand from that community, but it wasn't as commercial or as monetizable. And so you came in in 2019 and said, we're going to build sort of a more robust business and focus more on the investor side. What did that require? Can you walk us through maybe just even like the decisioning to assess the strategy at the time? And then once we do that, I'd love to understand the transformation across the different business functions. But first, just, you know, it is a rebirth of the idea, and talk us through that.

When Naval and I originally discussed me stepping in, you know, my experience prior to that was I'd started 3 companies, I'd sold 2 of them, and one of them was Square. And so I was at Square for almost 3 years and actually saw their transition from a payment stronghold into the behemoth actually that they are today. And one takeaway I had from the Square experience was when you're in the payments flow, you have all sorts of adjacent opportunities that you can actually expand to. And Jack had this really pithy way of compressing it, which was Square wanted to be at the beginning and end of every transaction because you can then monetize everything in between. And so that concept I carried with me as Noelle and I were looking at AngelList. And the thing that was very interesting to me about the Syndicate business was it was an all-in-one proposition where someone could come in, spin up an SPV, raise from all these LPs. We were in the money flow and then we deploy it into the company. And it was a much, much smaller business back then. But the fact that it was just working and the fact that people were consistently using it meant there was something to work off of and something to scale off of. The other piece was it was just unique. Like there's literally no other, no other business, no other platform that did this. And you also want to, you want to find that when you're building products. You always want to focus on something that's differentiated, something that if you didn't exist in the world, it wouldn't exist in the world, right? That's super, super important. I think a lot of founders miss this one piece. So if you don't exist in the world, this product wouldn't exist in the world. You really want to focus on that. And the thing that was pretty clear when we were looking at it was there was something here. The problem was the business model was basically all carry and it was carried interest. So if you would raise an SPV and you closed LPs into it, we would charge carry on your LPs or on Angelus LPs. Angelus LPs would be LPs that we've actually brought to the table. The issue with that model is when you have your own LPs, it feels off to charge carry. So that's problem number one. Problem number two is carry is future profits, right? It's unknown future profits. You don't quite know where it's going to go. It can be a lot or it can be a little. But when you need to invest in and build a fintech platform, you need to hire and you need to scale the team and you need to be able to rely on recurring cash flows. So those two things were clear problems that we had to change, we had to solve. And that was the first step, was actually do a reset on the business model and just overall how we think about scaling this product. Once we did that, the next step was to actually look at where do we take this roadmap, right? It had syndicates in it, and we just started working on these small microfunds. And I'm talking like half a million dollar microfunds, a million dollar microfunds. And to me, it was pretty clear that we had a foothold in the small SPV market and we needed to scale the SPV size, then we need to get into venture funds. And then more importantly, we just have to innovate. We had to actually create a whole new product. And Naval is really good about this and is always thinking and looking around the corner of what could be like, what is something that just doesn't exist in the world today? And we ended up tackling rolling funds. That was actually our first big innovation on the fund model. And no one really innovates on the fund model, by the way. It's actually quite rare. But we ended up launching rolling funds. And that was actually the key demarcation between what we had before and where we are today. And the reason is because rolling funds actually put AngelList on the map for fund management. Everyone knew us for SPVs and syndicates, but they didn't know us for venture funds or really just fund management. But rolling funds put us on the map for fund management, and it— we went through a massive growth spurt on the back of that on our, on our, like, fund, on our venture fund and rolling fund business. And so that ended up being sort of the key changes, right? First it was the business model changes and really looking at what, you know, making a decision on what type of underlying business we want to build. And then the second one was getting back to product innovation, and that product innovation drove a huge amount of word of mouth for us, which grew the entire business.

What did you need to transform in terms of the teams, you know, marketing, technology, sales? What was the culture and working environment like AngelList prior and then to build it into what feels like a far more institutional business? What is it that you had to do from an organization perspective?

So it's interesting. If we go back to 2019, I remember Nibal and I had a meeting, and the first thing I always do is I sort of look at the state of the business, looking at customer activity, customer churn, and sort of looked at it and went, okay, we need to solve this problem. We have to grow this business. And the, the normal way of doing it is, great, let's go hire sales, let's go hire marketing, and let's, you know, beef up the team. The problem with that is when you're competing with others who have a much larger war chest than us at the time, you can't win playing someone else's game, right? You can't win going toe-to-toe on an area that someone else is better than you at. So at that time, we weren't really strong at sales, and we didn't really have much marketing within the company.

Sorry to pause you, but I want to meditate on this kind of statement. You can't win at something that somebody else is better than you at. Can you just expand on that? And then where do you draw that from?

The way to think about this is if you're competing against another company who is really good at sales, has a deeper war chest than you to continue to invest in sales and deeper war chest and continue to invest in marketing. If you go head to head with them at that moment in time, you will lose unless you have some unique edge. And the way that it's the same concept as, you know, you have a product you're trying to bring to market. If you are the second, third, nth product in market and you are slightly better than all the— than that first product that has a foothold, you won't win because it doesn't deserve the attention, doesn't capture the attention of any customer that you're trying to bring in. Because in their minds, someone's already won that category, right? And trying to go head-to-head to convince someone of, oh, 'Oh no, we are better,' but you're only slightly better, you're not going to win that game. Now, if the category is completely open, it's, it's different. But most categories that people look to step in are actually owned by someone. And if you're going to go compete head-to-head, the only way to do so is your product has to be significantly better, or you just change the category entirely, meaning you carve out a different product category. And so that, that concept really comes from that insight, which is you can't win by playing someone else's game. You have to chart your own path. And what that really meant for us was we had to innovate. There was just no other way to do it. We could build a traditional venture fund product, which we did, and we had, but trying to go toe-to-toe with other fund management platforms back then who already had a foothold, were already known for it, already had a brand. Everyone thought of those as the go-to folks for that product category. So we just could not compete on that playing field no matter how much money we spent, which by the way, we didn't have much money back then in the bank. We weren't going to win that game. And so the focus was actually on product innovation, which was, which is really where we ended up focusing all of our energy, which is how Rolling Funds actually came about. It was a true product innovation. It owned the product category and at the same time created a whole new marketing moment for AngelList that was basically self-fulfilling. Like what would happen is customers would launch the Rolling Funds, they would go on Twitter, they would talk about it because we designed the product in that way. And they would talk about it and it would just create all of these natural growth loop marketing moments for us, which then had a spillover effect into the rest of the business, into our traditional venture fund product and our syndicate product.

You had this advantage in terms of startup awareness and supply and sort of like the early stage ecosystem. You also had the other side of it, which was syndicates and small venture funds who were using the platform. And so once you were leaning into those, you had to figure out the dimension on which to compete. And you can't compete on the dimension in which others are already strong. So, you know, you're trying to play a multi-dimensional game here, you know, and I assume that the, the folks you're deciding to take on really in that moment is Carta, right? Who's kind of sitting on top of private markets. Carta is a good competitor. They're young as well, but they've, they've also explored different areas of markets, came in to try to do secondaries, left secondaries, you know, they're also evolving sort of at the same time. And the way that you're choosing to take them on is through this rolling fund product, which is difficult to do, difficult to service. How big was that market for people who wanted to build rolling funds? Like, was there already bent up demand or did you have to create it as well?

No, this is actually one thing I've learned from Naval is products that are truly new and no one's done before, there's no one that's coming to you saying, oh, I want to use this product. When Uber was developed, I don't think anyone was even thinking at the time, oh, it would be great if I could just tap a button and have a car come to me. That's the case with any truly new product. There is no pent-up demand. You can't go to a customer and ask them, hey, tell me what you want, I'll just go build it. You don't get breakthrough products that way. This is a, you know, the classic quip. If you ask people what they wanted, they would say a faster horse. And so there was no pent-up demand. And actually, when we first launched it, I remember it was actually right before COVID and I think it was a Fortune article where we launched rolling funds. And I remember I was like, oh, this is a great product. We launched it and I was just waiting beside the email to see, all right, we're just going to see this huge amount of demand coming in. And it was just crickets. It was like, oh, wow, no one's really banging down the door. And then COVID hit. So it was like, I would say a couple of months of just readjusting to what's happening in the world. But once we sort of settled into this new reality of COVID Naval and I looked at it and we, we looked at it and said, okay, this product is clearly good. It clearly solves a problem. We need to just give it an initial push. And the way we ended up doing that, and all credit to Naval on this one for this insight, was going to specific GPs that are within the AngelList network and saying, Hey, why don't you start your rolling fund and we'll help you raise for that rolling fund? And specifically, Naval would do a session with them with our top LPs. So we actually organized a very exclusive group of top LPs for a— if I remember, it was actually a weekly session or biweekly session to put a GP in front of them. Naval would talk about them, why they think this is a great GP, and they would have rolling fund. And by the end of the call, we would actually send out a link and LPs could commit. So that actually created the movement, right? It started moving. By the way, I think every great product is a movement. Every different, every new product is a movement. It's an opinion of how the world should work. And there's this new book by Mike Maples that I think actually captures the whole essence extremely well. I think it's called Pathbreakers. And so We went from session to session, GP to GP, helped them raise capital. And one of them was Sahil from Gumroad. He launched his rolling fund and we did this session. And, you know, a few weeks later he comes to us and says, hey, I'm actually going to be launching it publicly on, on Twitter. And we said, great, that's awesome, happy to support you however you want. He had some questions.. And we expected the day to come and he was going to launch it on Twitter and it would be just like any other launch. Great. It's exciting. A lot of LPs coming in. But the way he launched it, he actually coordinated his launch and I believe it was a TechCrunch post and there was one other thing. And I think it was sort of just the perfect launch for that moment in time where everyone was online. And it was covered across multiple touchpoints, and the product itself was salacious enough. And okay, what do I mean by salacious? One, it's an actual innovation on how a fund could work. Number two is it enabled public fundraising, and that is antithetical to the way fundraising is typically done for venture funds. Venture funds typically fundraise through a very— it's called 506, where you can't talk about it publicly. You can only really talk about it privately, right? But there was actually a new rule, 506, which allowed for public fundraising that a lot of people didn't know about. In fact, a lot of lawyers didn't know about it. And that became the salacious part where you had people engaging on Twitter effectively saying that what he was doing was illegal and that AngelList doesn't know what it's doing. And I remember I was actually on Twitter actively responding to people and citing the literal rule that actually allows for this. And one misunderstood fact about AngelList is, you know, some folks— it doesn't happen as much anymore because we're a lot more institutional and a lot more scaled up.. But back then, the one misunderstood fact about AngelList was we were just a bunch of rule breakers and we didn't really have respect for the rules and the law and everything. What they didn't know is, and folks still don't deeply appreciate, is we are actually very active on the SEC policy side and always have been. Actually, in the first literal few months of me joining, I actually went to Washington to the SEC to weigh in on a bunch of policy decisions. But folks don't know that, right? And this has actually been a deep history of AngelList. In fact, Naval was part of— Naval and Nivi were part of actually getting the JOBS Act passed in 2012. And then we also engage pretty regularly with Washington on the legislation side as well. And so that one piece And really the distinction between 506 and 506, which is really private fundraising, public fundraising, created that salacious moment in addition to Sahil's marketing chops that it sort of created this zeitgeist moment for the company, which then pulled us, it literally pulled us forward. We had like a waiting list. We had people trying to use the product, trying to get in. Folks would actually be sending my friends messages. Trying to get access to me to try and get in to try and use the product. Yeah, it was— I mean, when I say product market fit, it was like, it was probably the definition of it. It was so strong, we're like, we have to put a waitlist. Like, it was just way too intense because we were still a tiny team back then. We hadn't even adjusted to the whole thing. And so that ended up being that one zeitgeist moment. But we actually, we literally traced it back to Seidel's rolling fund launch.

If you kind of draw that line forward, right, I think now there's somewhere around $125 billion of assets that has been put together with the platform. Where were you in the beginning, like around that pivot, and how did that growth come?

Oh yeah, I think around then we must have been maybe like a billion. I'd have to confirm that. I remember the first goal we set when I stepped in. It felt so ambitious. And we had this mission, actually, when I first stepped in, we'd set it in place and we're like, wow, this will be an ambitious goal. And we basically ended up crushing it within a year and a half and we never looked back. In fact, actually, I think the company was a little lost actually for a few months because teams need like an ambitious goal, right? And I remember we just crushed that goal and we were almost a little bit lost. We're like, well, shit, that felt very big. Now we have to go even bigger. And while we're setting it, the team was like, well, what do we focus on? What's the big ambitious goal we focus on? But yeah, we must have been back then maybe a billion in assets. And what ends up happening is as you grow, as you scale, Because actually, another misunderstood thing about AngelList is as we've taken on customers, we've very selectively and purposefully started with the smaller SPVs, smaller funds by design. We used to have funds that came to us that were $100 million, $150 million, half a billion, and we would say no. And people would be shocked, like, wait, why are you saying no? Well, we said no because we weren't ready to take them on because our approach to it is categorically different than what other platforms do. And so we would step by step, bit by bit, take on larger and larger funds. But now, as we've taken on larger funds, you just see this huge growth because we're more than comfortable now taking on the ultra-large funds. In fact, you know, we, we actually power scout funds for some of the top venture firms And by top, I mean like literal top 5 venture firms in the world because our infrastructure is very sophisticated. We're now able to serve them, but we would not have been able to serve them even 3 years ago. Actually, it would have been very tough for us.

That's an amazing transformation journey. I mean, that's absolutely huge scale that you've been able to get to. I want to ask you about more broadly the private markets, right? Because now you're sitting and doing fund administration and sort of all of these sort of gears of private markets investing. And one of the ideas that we as investors or just in the media see come up over and over again, I guess there's, there's two ideas. One is creating liquidity for private equity, you know, sort of the, everybody's tried it from the crowdfunding platforms way, way back to. Some of your competitors to the crypto people have said, you know, we'll give liquidity to private equity. And it seems even though there are platforms that facilitate this, it still seems really hard, far away. And it's not really what regular people do is that they don't get exposure to this asset class. And then the other story that's also this point, a 15-year-old story is, you know, companies are going public at $50 billion after all of the original capital gains are gone. And so, you know, you're not going to get Amazon, you're not going to get Google Google, right? Like, Figure, without any revenue, real revenue or distribution, raised at a $40 billion valuation. OpenAI is $300 billion. Anthropic is again like $40 or $50 billion. So you've got this huge value leakage out of the public markets. The public markets are just giant asset management robot machines. So there's sort of like this mythical Valhalla of If only private equity could be liquid and in everyone's portfolios. And at the same time, it is so profoundly difficult from a regulatory perspective as well as from just a market structure perspective. Given your current vantage point, how do you look at this problem? Like, what are ways in which it can be quote unquote solved and what are the potential pathways going forward?

There's two different types of assets we're talking about here. I think there's a venture and non-venture. And I know it gets bucketed into private equity, but private equity has way more than just venture. I would say if we're talking about venture, it is true that companies are taking longer to go public. It is true that those gains for those companies aren't being captured by the retail class, by the non-accrediteds. And that's definitely a shame. And again, I actually understand all of the incentives to not go public. I think the reality, it has gotten harder and harder to go public. Also, I just think the bar has changed, right, from even two decades ago, you would actually have a class of investors in the public markets that would be comfortable with companies that don't have like a billion in revenue. But nowadays, you sort of have this like minimum bar you have to clear in order to even consider going public. Otherwise, you're just not given the time of day. You're not given the space to evolve the business. So I think there is a question of risk appetite in the public markets. I actually have heard arguments on both sides. You go public, there is risk appetite as long as you execute. And versus the other side is, hey, you just need to give the company time to mature, right? And I, I appreciate both sides of that argument. The reality is going public is a one-way door. And so once you do it, it's very hard to reverse it. It's very hard to actually go private, which is, I think, what the underpinnings are for why a lot of these companies are being cautious about when they decide to go public. So that's sort of like this broader commentary. Now In terms of liquidity in the private markets, now you probably have more liquidity in the private markets. I think the vast majority of the volume is concentrated in the few companies that have the ability to go public soon, right? Or there's a lot more known about that company. They have the brand because you have a lot of companies under the radar. They're doing extremely well, but they just don't have that brand yet. And the way I think about this is that company is actually being underwritten based on their probability that they're going to go public soon, right? Because if you're going to invest at the later stages, you are like, your return horizon isn't the 10 to 15 years, which is what it is for early stage venture. Your return horizon is more like 2 to 3 to 4 years because you're expecting this company to go public and then you're going to return capital to your LPs and then you'll go through the next cycle. And that isn't going to change. I actually don't think that dynamic will change. I don't think we'll all of a sudden see more liquidity to the earlier-stage companies because it's a question of risk, it's a question of return horizon, and it's a question of brand. So all of these things actually factor into it. So you have a lot of the same dynamics that appear in the public market starting to creep into the late-stage private markets, and I don't think that will change. Now, in terms of my broader view on liquidity within venture, or let's call it the non-accredited class, I, I think the, the best way to do that is actually through a fund. And the reason I think it's the best way to give the non-accredited investor class access to venture through a fund is you can then allow for a risk of loss, right? You can, you can invest in a broader set of startups, whether it's early stage, mid-stage, or late stage. You can absorb the loss, you can capture the upside, and it behaves a little bit more like the S&P 500, right? It's not exactly right, of course, because there's a lot of rebalancing that happens, but you can at the very least get some resemblance of an index. Versus getting concentrated exposure to companies that actually do have high risk of going out of business or high risk of, you know, high risk of not returning what you expected of it, of that, of that company. And I think that's the best way for the non-accredited investor class to access venture. I'm not, you know, I'm not sure if we're going to see more and more liquidity continue to flow in. In fact, I mean, the big sort of narrative and news right now is there's not enough liquidity within the private markets. I don't know if that's going to change. I do think the only way for that to change is for these companies to go public because it's like similar dynamics. A lot of capital is going to a few companies in the secondary markets. We're personally not seeing that trend change.

One thing you mentioned prior to the conversation was artificial intelligence and how that's getting pulled into your products as well. Of course, a huge theme on the investment side, but I'm curious, especially in financial services and in sectors that are so clunky in terms of regulations, lawyering, workflow, you know, all this stuff, how are you seeing AI getting applied to clear that up?

Yeah, the way I think about AI, it's digital intelligence, and if a human can do it once, then the digital intelligence can replicate it forever, right? And when it comes to finance and fintech, there is a surprising amount of back office work that's there. And the back office work, you can think of as a lot of playbooks that a large group of humans execute on. And that will ultimately just all get automated through AI because you have a human that's applying a playbook that has to apply some judgment on something that they're looking at. Well, with AI, they can actually apply that judgment 24/7, and you can scale it up infinitely, and it's a lot cheaper. So I, I view AI as going to, at a minimum, look at all the back office tasks and automate a large portion of it, and it'll force the humans to get pushed up the creative ladder, right? It's, hey, they can actually go do higher value work, more creative work versus the rote, you know, the execution work that's there today. So that's like one area. I think the second area is think of that as like the touchpoint between the customer and the company through like customer service. I think that's another obvious area where it will automate quite a bit of the customer touchpoints. So for example, If I'm an LP emailing into AngelList asking about my K-1, guess what? You can actually have an agent looks at it. It knows who the LP is. LP is— it's connected to the underlying database. It can easily understand that question because English is the programming language. Now you can take it, pull the K-1, send it back to the LP, and that's it. You're done. You've actually automated that one touchpoint. That's another area. And then the third is, I would say, in the customer-facing product, like a net new product that unlocks something that just wasn't possible before. And so, you know, one example of this, AngelList just launched this product in beta called Fin, where we built a reasoning agent on private market data. So we've aggregated anonymized some AngelList data. We've also connected it to our customers' private fund data, like their own fund. And we've partnered with a bunch of different service providers. So for example, one of them is a provider to aggregate secondary data. Actually, they've actually aggregated from all the providers, so I can ask questions like, you know, how much secondary volume was there for SpaceX in the last quarter? And I can get that answer. I can even get right down to the studs and look at what was the actual, you know, buy-sell volume, what were the numbers. And it can allow people to very quickly get to a fair price for, you know, whether they're a buyer or seller. And that's another example of how AI is actually going to impact fintech and finance overall. But I'm actually very excited about it. I think, and we actually at AngelList have initiatives on all three of these areas. I do think the one thing that will be really, really important is the error rate on finance and expectations of AI and finance will be very low. And you have to parse out where, like, what sort of systems you're building where the error rate has to basically be zero. And how do you do that? And so we have some ideas on that. You know, there's a concept in accounting called maker-checker. You have one thing that does the thing, the other thing that checks the thing. And so we have different ideas on how that's all going to come together. But yeah, we, we, we see AI impacting finance in a big, big, big, big way.

That's fascinating to get that unstructured data out in a way that that others can consume and markets can consume. And I think that's actually quite valuable. And there's lots of examples of businesses that find data to be the magic thing that gets squeezed out of it. You know, even the exchanges, the large exchanges are primarily data businesses once you get rid of all the fees.

That's exactly right.

Well, this has been a fascinating discussion. I've learned a ton about how AngelList has transformed and, you know, that journey is not easy and basically starting a new company with assets of the old company and building a new culture and creating new goals and then fighting some pretty tough battles. If our listeners want to learn more about you or about AngelList, where should they go?

Yeah, so I mean, about me, it's x.com/avlok, A-V-L-O-K, and then AngelList would be x.com/angelist, A-N-G-E-L-I-S-T.

Fantastic. Avlok, thank you for joining me today.

Thank you for having me. This was great. Hi everyone.

That's it for this week's episode of the FinTech Blueprint. For more technical deep dives into all things FinTech and decentralized finance, check out fintechblueprint.com and grab a free subscription to the newsletter. This is Lex, and I'll see you next time.