What Is a sub-adviser?
A sub-adviser is typically an asset management firm or entity—often an Exempt Reporting Adviser (ERA) or a Registered Investment Adviser (RIA)—that’s hired to help identify, evaluate, and manage a fund’s investments. When a fund operates under this structure, the sub-adviser works alongside the legal general partner, Investment Adviser and the Fund Lead to make investment decisions.
Role of a sub-adviser on AngelList
- Delegated Authority: Responsibility for the fund’s investing program is explicitly delegated to the sub-adviser and/or the Fund Lead.
- Deal Evaluation & Management: The sub-adviser focuses on sourcing, vetting, and overseeing portfolio companies, while AngelList provides ongoing support and manages administrative tasks.
- Potential Conflicts: If a Lead is affiliated with an advisory entity but does not formally engage it as a sub-adviser, a conflict of interest could arise. This affiliation should be disclosed to investors through the platform to maintain transparency.
Why use a sub-adviser?
- Expertise: Sub-advisers bring specialized knowledge and networks to inform deal sourcing and portfolio strategy.
- Regulatory Compliance: Many sub-advisers are ERAs or RIAs, meaning they adhere to registration and reporting obligations that can bolster investor confidence.
- Clear Roles & Responsibilities: By delegating key investment decisions to a sub-adviser, the fund maintains a clear governance structure and accountability for investment performance.
Key takeaway
A sub-adviser acts as a management company for the fund, providing critical investment expertise and oversight. On AngelList, this role is coordinated with the Fund Lead and AngelList’s legal entities to ensure all parties work together effectively. If you have an affiliated adviser—whether it’s an ERA, RIA, or another entity—remember to disclose it and clarify whether they’re serving as the official sub-adviser for your deals.