Crowdfunding has officially gone mainstream.
AngelList, a two-year-old social network that connects startups with investors, announced Wednesday that entrepreneurs using its site have gone on to raise a staggering $1.1 billion. (Hat tip: PandoDaily.)
Capitalizing on the crowdfunding craze, AngelList helps startups attract multiple investors who each contribute small amounts of money, rather than have founders try to land one lump sum from one or two wealthy venture capitalists.
Companies that garnered early funds on AngelList and have since evolved into well-known firms include Uber, an app that summons cars, and Branchout, a professional networking service with more than 25 million users.
In May, Rally, a website that helps people raise money online for causes, raised $4.4 million on AngelList in just eight days, on top of the $3.5 million it pulled in from other sources.
The figures AngelList released Wednesday showed that slightly more than half of the total funds raised by AngelList users -- or $572 million -- went to companies based in Silicon Valley. San Francisco-based firms raised $458 million, followed by New York startups, which raised $136 million.
Small investments in fledgling firms, also known as seed-stage investing, have grown at a torrid rate over the past two years. And AngelList's announcement comes amid a string of record-breaking campaigns on Kickstarter, another crowdfunding platform.
Unlike Kickstarter, where anyone can pledge money, AngelList backers must prove they have a certain level of income before they can invest in startups using the site. That's mainly because the AngelList funds are considered investments, rather than donations.
Correction: This article incorrectly referred to the funds that AngelList facilitates as donations. They are considered investments, not donations.