There are a growing number of resources for entrepreneurs on the web, but certainly one of the very best is Venture Hacks. And their AngelList service is particularly useful for entrepreneurs trying to get angel rounds done. I found myself recommending it to at least a half dozen entrepreneurs this past week.
I particularly like this case study of the BlockChalk angel round on the Venture Hacks blog. For those who aren't going to click thru and read the whole thing, here's a quick summary.
Joshua Schachter had already committed to invest in the BlockChalk angel round and he suggested they use AngelList to fill out the round. That resulted in commitments from Mitch Kapor, Thomas McInerney, and Josh Stylman. But then Josh Stylman introduced BlockChalk to Chris Dixon and Eric Paley who joined the round. And then with the strength of that syndicate in place, AngelList added Satya Patel, Michael Dearing, and David Liu to finish off the round.
What this shows is that the old model of angel deals is alive and well. Angels love to share deals with each other. It is how angel rounds come together. But AngelList adds at least two things to the mix. First, it adds a place where the deals can come together online. And second it adds people to the mix that would not be part of the offline deal sharing networks that already exist.
I am on AngelList. I see all the deals come together. I don't personally invest in angel deals in the web/tech space because of potential conflict with USV down the road. But even so, I find it immensely useful to see what companies are getting traction in the angel market. It's part of my radar/early warning system. And it is entirely possible that we will decide that USV needs to participate in an angel round that is coming together on AngelList, although that has not yet happened.
So if you are putting together an angel round, particularly if you already have it partially raised but need to finish it off, I strongly suggest looking into AngelList. It's a great service.
Off the topic … but not annoying, i believe.With the bird’s eye view and watching the angel investments happening now … u will have a clear dots where the internet is moving. What next? ( picking signal from noise on internet is one). Do you see foldable-screen+Cellphone+virtual-keyboard = everything?
Any thoughts on how this fits into the whole super-angel bubble debate? (I recall only one post from you on that).Could we consider AngelList an ad hoc, crowd-VCed super-angel in its dynamics?And while on that… what do you think of the lowest end of the entrepreneurial investment scene, sites like Prosper which use peer-to-peer lending to lower the startup threshold even further?I realize I am going off topic here, but I’d like to see a lot more discussion of the super-angle bubble debate. I am intrigued in particular by the assertion everyone (including you) seems to be operating by, that it still takes about $20 million to grow a web tech company to cash flow profitability. How’s the variance on that mean doing? What are the lowest outliers you’ve seen? Do they share best practices? I’d like to know if there’s an emerging formula for “Profitable before $5 million in investment” that applies across application types/business models.Venkat
I agree Venkat. Because, more and more, it does only take a small amount of capital to either launch or test your business idea, my company peerbackers is opening a crowdfunding website for entrepreneurs next month (actually, anyone needing micro-funding of 25k or less can go to the informational site now and submit their venture for consideration – http://www.peerbackers.com). I think this peer-to-peer world is going to play a strong role for start-ups as 23 million businesses have started on 10k or less.
I think AngelList is awesome and it is a great move by Nivi and Naval.But I do question some of the people on there – they are not actual angels – they’re there to represent their larger VC firm (not referring to you, Fred. USV can act like an angel sometimes).It’s not such a bad thing (to get an intro to a big VC), but in my mind, it dilutes the merit of the list and can be misleading to entrepreneurs looking for their first round.And finally, for entrepreneurs seeking investment via AngelList, consider asking Nivi/Naval to just send you out to a few angels at a time. Getting your deck in front of everyone at once doesn’t give you a lot of room to take feedback from early viewers and iterate on their questions before the next pitch.
Thanks Reece, great advice for the Big Chase.
Hmm…only 2 women on that list.
There aren’t that many women hanging around Tech Land (though this is changing). Why would you expect to see a lot of women doing seed?
Shana,I know one woman who does excellent job of supporting entrepreneurs, Sramana Mitra, with her 1M1M initiative, aiming to help 1 Million entrepreneurs to reach their first $1 Million in revenue each http://www.sramanamitra.com…
Will remember that. Really. Thank you.
interesting to see the list of angels by location, although not unsurprising. I hope that more European angels sign up soon 🙂
Do you see opportunity for more cross border investing as Angellist gets bigger?
unfortunately not really Shana most Angels, in the UK at least like to invest locally (within easy travel distance)
Nivi & Naval are like the Batman and Robin of early stage startups except they’re both the Bat.Bookmarked Angelist a while back and will visit when I nail social proof for an app. Before traction chasing money is a distraction.
i love that first line. nicely done
Fred, this post alone is worth the price of admission. Good on ya!This is indicative of how “the money” is becoming more mobile and accessible. This is why individuals rather than governments should be in the business of accumulating wealth and making investments and CREATING JOBS and TAXPAYERS.The information contained in your post, the road map to capital, the marriage of entrepreneurs, deals and investors in a modestly tech delivery system is what makes CAPITALISM work.This is capitalists making whoopee and this is what made our country great and what will actually drive the recovery — fundamental entrepreneurial capitalistic principles employed without strings in an open marketplace with folks trying to make a buck.We should not be embarassed by acting natural. We should be embarassed by the inability of our government to grasp these fundamental principles.It is so damn simple and obvious that it is almost silly.Great post, Fred.
We need a way to RT JLM’s comments.
it’s pretty amazing how inviting they’ve made approaching a growing list of rockstars in less than a year.and they even provide the information on how to pitch them too!what’s next, a Venture Hacks/AngelList web app?
I definitely like the list that Nivi and Naval created. The list of angel investors also tweet and have their own blogs (of course I am partial to a certain one I go to daily) and you can learn a lot from the angels’ knowledge and how-to strategies just by reading on their social media posts. More power! But definitely, you gotta have some traction first =)
Fred – Great post, a big fan of your Blog. I wanted to tell you about another service for entrepreneurs who are trying to raise capital. http://www.microventures.com will be launching in about 3 weeks and it will help startups raise capital through their peers. Think Prosper.com but for VC. Investors and entrepreneurs can go to the site now and send us your e-mail address to get notified when the site launches. Sorry for the self promotion but I thought it was appropriate for your post. -Bill
let us know when it launches please
I must say that this was a very constructive and informativeread! I would like to thank you for taking the time to writethis post and share this with us all!
I have attempted to work with VentureHacks and filled out the online form some weeks ago. I subsequently followed up with an email. To both no response. the great majority of angel investors in this group are tech, in one way or another. I am looking for similar “lists” of angels who do early stage consumer, food and/or retail. Any suggestions?ChrisConvergence Foods, a “Blue Ocean” innovation company
that is toughmy wife is active in that sector and it has not come together the way tech angels have
Chris,I recommend to present your business here, at Sramana Mitra’s strategy roundtable, any Thur, every week, 11 am EST, 8 am PST: http://www.sramanamitra.com… for feedback on your business strategy, positioning and various seed financing options.
On our list of things to do..”sat” in on one a few weeks ago – very interesting and helpful. I would recommend it to anyone looking for an expert view on thier plan in a real time mode. Great resource!
It’s a great service and we’re working with the team on referrals to the Open Angel Forum…. in fact, a company I’m investing in and had at OAF recently came from the list.
OAF is also on the list of amazing new services for entrepreneurs Jasonso great that you are working together
Are there biotech and medical device companies on AngelList?
I saw one person, along with someone who invested in PinkBerry
Isn’t Angellist ever afraid of the negative signalling that Chris Dixon talks about? How do you balance signaling issues?
Quick question: why is there a statement about a new model for angel investors (and what would that new model look like?),since you referred to the old model of syndication for Angels? What were they doing in the interim?Is this a statement largely about the idea of a seed round being sort of new VC land, and older funds adapting by doing less syndication?*scratches head*
I’d like to add 2 names that might constitute a new category in that they are neither VC or Angels (actually, they may be considered a combination of both).Here they are:- SO Ventures in Paris (handlling mostly life science)- eSolve Capital and their division eSolve Nano (high tech in general; their fouces varies from time to time; now it seems to be nanotechnology)Both these guys have access to a wide range of funding and are able to package deals with highly desirable conditions
I follow Venture Hacks pretty regularly and read that story when it first came out. After rereading it though I have to ask, is that the preferred way to receive funding?Or more specifically, what is % of deals that receive funding that were NOT referred to Nivi and Naval by one of the angels within AngelList?For those of us outside of the major investment centers, I now wonder how valuable this service really is.
Thanks, Fred! I always enjoy reading your blog, so it was a thrill to see my startup (BlockChalk) mentioned in this post.As we wrote on our blog (http://bit.ly/ar9Lk9), we were extremely satisfied with our AngelList experience. It had a hugely positive impact on our fundraising efforts. We echo your supportive comments, and we’re glad to see Nivi and Naval getting some much-deserved attention and endorsement for their efforts.
Interesting idea. Pity there are so few Europeans on the list. It would also be useful to filter by investment range and sector so that (for example) one could find angels prepared to invest in UK cleantech, irrespective of their actual location.
Nice post. What do you think about MicroVentures plan to offer a peer-to-peer angel investment platform – essentially allowing anyone to become a very small angel?
That would be crowdsourcing, which already exists/is offered by so many outfits…
Fred,I would like to interview you for our Seed Capital from Angel Investors Series:http://www.sramanamitra.com…You can reach me at 12irina34 (at) gmail (dot) com or @mylifeandart
Haha, very damn…………………………………………………………………………………….funny! You clever son of a bitch! LOL
Iron can work better…
great idea. i think i’ll tackle that tomorrow morning charlie
Excellent question Charlie
Try liking comments. It’s quoted in your activity stream, e.g. http://cl.ly/5b30934840cd3b…
Hey, that’s something that would work well on a social blog widget/tab. Nice.
True.But at the same time, a number of people on the list can’t really writechecks.It undermines the purpose I think… or at least the title. 😉
I heard for certain people, it already is.
Thanks for the update Nivi!
Yea, I don’t think anyone should be removed necessarily, but I do thinkyou’re on the right track to qualify the angels’ statuses (to the best ofyour ability).As far as getting feedback, part of that falls on the entrepreneur to getthat feedback in the first place (AngelList is probably not – and shouldn’tbe – their first pitch).That being said, I think picking some initial people to contact and thenpushing out to the rest of the list is worth it if you can make it work (youalready sort of ask this information in your application). Further, it’s asignal to the targeted angel that the entrepreneur is really serious aboutspeaking with you (and there should be a reason ie. – angel has experiencein social gaming/mobile/whatever and that is applicable to theentrepreneur’s strategy etc.).
I think you should look at AngelList like an MVP (minimum viable product) and nail what it is that people are finding so exciting. For me it is, like the previous comment, that the guys on the list can “pull the trigger”. If the list gets diluted or becomes ambiguous I think it looses its impact. Better to have different lists (at least for presentation) or make it easy to select from the whole set, as you mention.
haha… Slicing and dicing angels…Like I said, I don’t really think anyone needs to be removed. Anyone worththeir weight on the web should be able to do some research into any angelthey’re put in touch with and know what an intro can do for them.It just seems incongruous to have an “Angel List” with people who can’treally pull the trigger. Maybe I’m just arguing semantics…
Thanks for the response and the link Nivi! Now I have another reason to go meet Alex Muse here in Dallas.