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The Foundry Group made its first AngelList syndicate investment, raising $700,000 for OnTheGo Platforms, a startup that claims to “make smart glasses smarter.”
Portland-based OnTheGo’s platform turns the outward facing camera on smart glasses into a motion-sensing device, so people can control their glasses using hand gestures rather than pressing a button or using a voice command.
This marks Foundry Group’s first investment through its AngelList syndicate fund FG Angels, which the firm established four months ago.
“Smart glasses won’t advance — in fact, they won’t succeed — if developers are stuck building for a touch and voice world. It’s just not a viable way of interacting with these devices,” OnTheGo said in a blog post.
Google Glass attracted a tremendous amount of hype last year, but many “Glass Explorers” complained that the device lends itself to awkward social interactions. Saying “Glass, take a picture” is not exactly subtle. OnTheGo works with Original Equipment Manufacturers (OEMs) and smart-glasses application developers who want to integrate gesture recognition into their product.
Foundry Group invested $330,000 of the $700,000 seed round. FG Angels plans to make 50 seed investments through AngelList by the end of 2014 and committed $2.5 million to the effort.
“Over the years, we’ve had many entrepreneurs ask if they can invest alongside us. We’ve never had a side fund – this is our first experiment with it,” Foundry Group founder Brad Feld said.
AngelList rolled out the Syndicates features in September. It enables trusted angel investors with a solid track record — otherwise known as “power angels” — to invite other angels to go in together on a deal. This means that influential angel investors can rally more support behind the startups that they believe in.
Syndicates set off debate in the angel and VC communities about what the impact would be — is it the “nail in the coffin” for the bottom half of venture capitalists, as angel investor Jason Calacanis said? Or will it in fact hurt angels and help venture capitalists, who can now participate in seed rounds earlier — and easier?
Either way, it created a third category somewhere between angel investor and venture capitalist, where startups can raise money by finding one, well-known individual or angel fund to form a syndicate on their behalf.
AngelList Syndicates is new territory, particularly for VC firms who don’t typically make their investments through AngelList, and Feld said that the process was more complicated than anticipated. However, now that the firm has done it once, future investments should be easier.
FG Angels has a second investment through Syndicates that will close soon, and expects to make two to four investments per month in the first quarter of 2014.
Foundry Group was founded by Brad Feld, Ryan McIntyre, Seth Levine, and Jason Mendelson in Boulder, Colorado. It has raised four $225 million funds since 2007. Notable portfolio companies include Appcelerator, FitBit, StockTwists, Occipital, and Urban Airship.
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