AngelList saw an opportunity to build an end-to-end financial management solution for startup founders.
With Unit, AngelList has become their customers’ financial mission control, offering banking features that power their businesses.
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AngelList is a platform that makes it easier for startups to get founded and funded. In 2021, AngelList launched Stack, an all-in-one solution for founders looking to launch a fundraising-ready startup.
“Stack abstracts away the administrative drag of running a company, so that founders can focus on finding product market fit,” says Sumukh Sridhara, who leads the startup-focused team at AngelList.
At the core of AngelList Stack is a bank account: a place for founders to receive investment dollars and manage their expenses. To power that bank account—as well as additional features like debit cards, wires, and ATMs—AngelList Stack relies on Unit. That means Unit shoulders the burdens of the bank relationship, compliance, and back-end infrastructure so that AngelList can focus on other priorities.
At the heart of AngelList’s decision to launch AngelList Stack is an interesting question: why build banking rather than other products and features? Why would AngelList’s customers want to bank with them, as opposed to a traditional bank like Chase or Wells Fargo? According to Sridhara, the answer is twofold:
“The first reason is that banking makes our entire product offering more valuable," he says. "It creates a differentiated offering for our customers.”
Sridhara’s point about differentiation is well-taken. AngelList competitors like Stripe Atlas and Clerky can help with incorporation and legal documents, but they don’t offer banking or equity management. Competitors like Carta and Gust offer cap table management—but they can’t help with incorporation or banking. AngelList’s end-to-end solution sets them apart, and they’ve seen rapid growth as a result.
How does banking make AngelList Stack’s product offering more valuable? Because it enables features, functionalities, and analytics that would otherwise be out of reach. Things like:
Finally, banking enables several new revenue streams for AngelList. For example, they earn interchange revenue whenever their customers swipe their debit cards. In the future, they may choose to offer financing to founders, which would come with its own revenue stream.
“Banking makes every single feature we offer more interesting,” says Sridhara. “With it, our platform functions as financial mission control for our customers. Without it, we’re just another software tool in a big, messy collection of products.”
Once AngelList had decided to offer banking to its customers, the next question was how to build it. One option was to work directly with a bank. AngelList actually had experience with this approach: a few years prior, another business unit within the company had pursued and built out a working relationship with a fintech-oriented bank.
It had taken AngelList considerable engineering, compliance, and operational effort to go live working directly with a bank. It also required AngelList to devote significant resources to areas in which did not meaningfully contribute to their competitive advantage: things like writing banking policies and procedures, selecting and integrating with compliance vendors, building out KYC and document-submission workflows, conducting manual account reviews, and managing periodic audits and re-certifications—to name just a few.
By partnering with Unit, AngelList found a solution that required a much lighter investment of time, dollars, and other resources. Most of the technical work of integrating with Unit’s API was accomplished in two weeks by a single engineer. Unit makes offering a secure banking product easier by shouldering the burden of compliance, so there was no need for AngelList to hire a dedicated team.
“Our team would prefer to dedicate our limited time towards the core product experience,” says Sridhara. “The nice thing is that Unit manages almost everything else for you.”
When choosing among banking-as-a-service providers, AngelList needed a solution that could be customized for their unique use case. For example, they needed to adjust KYC parameters to optimize for their vertical and target customer. They needed to be able to send and receive wires and make funds available to founders quickly. After evaluating all the major players in the space, they found that Unit was best able to meet their needs.
“Unit has the kinds of granular banking controls we require,” says Sridhara. “Many platforms try to make all their customers fit in one box. But Unit worked closely with our team to adapt their platform to our unique needs.”
At present, only startups that use AngelList Stack to incorporate can bank on the platform. Looking ahead, they plan to make it possible for any company to bank on AngelList Stack. AngelList is also considering offering additional banking products to their customers like credit cards and invoice factoring.
Sridhara says that Unit will continue to be a critical partner in that journey.
“The problem with most bank integrations is that they don’t improve over time; they stay where they are,” Sridhara says. “Unit continues to improve, all the time, very quickly.”
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AngelList is a financial technology company and not a bank. Banking services provided by Blue Ridge Bank N.A.; Member FDIC. The AngelList Visa® Debit Card is issued by Blue Ridge Bank N.A. pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted.