5 ms·

What’s The Real Deal With AngelList?

48 points by ssclafani 16y ago

asanwal 16y ago
If the angels on AngelList are happy with 5-10% returns (per Jason Calacanis) and those are the types of companies they're funding and finding on AngelList, doesn't it make sense that VCs would "opt out" of this market given 5-10% is not what they/their LPs are after? After all the drama and histrionics, it seems that the 2 investor groups may just have different returns expectations. Nothing wrong with that.
- salemh 16y ago
  VC List pivot / new startup modeling Angel List?
jdp23 16y ago
"My biggest fear is that people confuse the “social proof” of other prominent investors on AngelList for real insight. Indeed, in a bubble people generally chase what other people are chasing leading to group think." Indeed.
- trevelyan 16y ago
  You'd think reading the piece that there had never been groupthink behind funding decisions before.
fleitz 16y ago
Have to agree on this one. My startup is in the same space, we're taking a totally different approach. The focus is on creating a compelling presentation / pitch. When you use the product it feels like your interacting with the company. We're pretty much iPad exclusive as we think the best way to approach the space is to put pitching tools in the hands of the entrepreneur. The idea is that investors and entrepreneurs will share the presentation physically by passing the iPad around. We also have tools to gather information on the spot, if the person wants to look it over later, take their email in the app and it emails them a link to the presentation. Which they can review later. Use Cases: In person amongst friends: Check out this startup, and then pass the iPad to the person. We see this use case more for someone who has been presented to in person and is sharing with others who may also be interested. Elevator Pitch: If you get the opportunity for an elevator pitch and generate interest you can pass them a compelling presentation. The buttons are also oversized so that while you're presenting you can still guide the presentation while it's held in the other person's hand. Multiple People: With your iPad in hand you'll always be prepared to present, if you find yourself in a board room, or anywhere with a TV simply plug the VGA/TV connector in and display the presentation on the big screen. The exit / next round: It's easy for investors to take their portfolio companies presentation and add them to their home screen, that way when they are looking for prospective buyers for the next round / exit they have those great presentations on hand and can easily walk the buyer through. We'll eventually support recording a presentation so that the app flips through the various parts of the presentation automatically while playing your recorded audio as the app transitions through the pitch. We have no social media integration other than to login/share with friends, we don't think it's a good idea to encourage a herd mentality and that prospective investors should make up their own mind, rather than relying on the herd for signals. I think over the long term it will build a better understanding between investor and entrepreneur. Rather than investing based on what is in vogue. We focus on creating a compelling story for the entrepreneur by being rich in imagery, video, and eventually audio. We're helping entrepreneurs create a connection and generate real interest in what sets their company apart from the herd. Once we have the presentation down and have that working flawlessly we'll move to social media.
- asanwal 16y ago
  Interesting idea, but all use cases above suggest you have to be there in-person to "pass the iPad". Seems like that requirement creates extra friction in the process.
  - fleitz 16y ago
    You can definitely send a presentation to someone else, there are email/linkedin share features. Your home page will display all publicly available presentations, but we see an essential chicken-and-egg problem that is solved by positioning first as a presentation tool. Thats the immediate value, it helps an entrepreneur present to the people you already know, as well as collect information for prospective investors. eg. hallway / booth conversations at a tradeshow, quickly walk through a hand held presentation that is tactile and interactive, if they're interested, take their email down, send them a copy of the presentation and have the email on hand for follow up. You can also use it to pitch your product, rather than providing information about the company. Once the network of entrepreneurs is in place we can start attracting investors via internet means. Once both are in place we'll evaluate the next steps. What we don't want is prospective investors going to an empty site.
Wrkonce88 16y ago
As a new found "tech geek" the "angelInvestor" world can be quite discouraging and complicated. I was never one for formal education and always taught myself, however there are certain areas where information is limited one being this. So I believe this site offers a great connectivity tool to at least allow you to introduce and connect with key people.
brianstorms 16y ago
My discomfort with AngelList stems from what I see as a disproportionate advantage on the buyer side (the investors), with less advantage going to the seller side (the startups). For investors, AL is a firehose of Shiny. If you're a Shiny junkie, then connecting the IV tube of AL into your veins will keep you wired into dealflow like nothing before. Instant gratification, severe acceleration. For startups, you hear the occasional startup praising AL with stories like "we posted our profile and 3 days later we have $600K woo-hoo!" but my question is, until I see AL post detailed stats and analytics, I assume that for every success story there are dozens, scores, or even hundreds of stories where basically nothing happened. I would gladly be proven wrong: Nivi, Naval? Lastly, I get the brilliance of AL, I get that it works because there are tons of investors signing up, but it's the scale that worries me. As it scales, the win rate for entrepreneurs will just get worse. Has to. A similar thing exists in the publishing world with literary agents and editors. (Heck, there, writers (the entrepreneurs in this analogy) have to go through TWO hoops not just one, to get an advance (investment)). There are too many writers and not enough agents and even less publishers, it's a very very tight funnel and rejection is the norm. AL will probably wind up this way too, unless AL thinks of ways to improve the service to better balance the features, acountability, and responsiveness of each party. I want to see investors being forced to respond to investors who've submitted their pitch to them specifically, within a set amount of time, or lose reputation points. AL should facilitate rapid communication between both parties, but it seems that all AL does now is email investors when entrepreneurs submit companies to specific investors, and at that point AL's job is done and the ball is in the investor's court. Not enough. AL should be all over the investor and help the entrepreneur get closure as soon as possible with each investor they submit to -- even if the answer is no. Any answer is better than silence.

48 points by ssclafani 16y ago

If the angels on AngelList are happy with 5-10% returns (per Jason Calacanis) and those are the types of companies they're funding and finding on AngelList, doesn't it make sense that VCs would "opt out" of this market given 5-10% is not what they/their LPs are after? After all the drama and histrionics, it seems that the 2 investor groups may just have different returns expectations. Nothing wrong with that.

salemh 16y ago
VC List pivot / new startup modeling Angel List?

jdp23 16y ago

"My biggest fear is that people confuse the “social proof” of other prominent investors on AngelList for real insight. Indeed, in a bubble people generally chase what other people are chasing leading to group think." Indeed.

trevelyan 16y ago
You'd think reading the piece that there had never been groupthink behind funding decisions before.

fleitz 16y ago

Have to agree on this one. My startup is in the same space, we're taking a totally different approach. The focus is on creating a compelling presentation / pitch. When you use the product it feels like your interacting with the company. We're pretty much iPad exclusive as we think the best way to approach the space is to put pitching tools in the hands of the entrepreneur. The idea is that investors and entrepreneurs will share the presentation physically by passing the iPad around. We also have tools to gather information on the spot, if the person wants to look it over later, take their email in the app and it emails them a link to the presentation. Which they can review later. Use Cases: In person amongst friends: Check out this startup, and then pass the iPad to the person. We see this use case more for someone who has been presented to in person and is sharing with others who may also be interested. Elevator Pitch: If you get the opportunity for an elevator pitch and generate interest you can pass them a compelling presentation. The buttons are also oversized so that while you're presenting you can still guide the presentation while it's held in the other person's hand. Multiple People: With your iPad in hand you'll always be prepared to present, if you find yourself in a board room, or anywhere with a TV simply plug the VGA/TV connector in and display the presentation on the big screen. The exit / next round: It's easy for investors to take their portfolio companies presentation and add them to their home screen, that way when they are looking for prospective buyers for the next round / exit they have those great presentations on hand and can easily walk the buyer through. We'll eventually support recording a presentation so that the app flips through the various parts of the presentation automatically while playing your recorded audio as the app transitions through the pitch. We have no social media integration other than to login/share with friends, we don't think it's a good idea to encourage a herd mentality and that prospective investors should make up their own mind, rather than relying on the herd for signals. I think over the long term it will build a better understanding between investor and entrepreneur. Rather than investing based on what is in vogue. We focus on creating a compelling story for the entrepreneur by being rich in imagery, video, and eventually audio. We're helping entrepreneurs create a connection and generate real interest in what sets their company apart from the herd. Once we have the presentation down and have that working flawlessly we'll move to social media.

asanwal 16y ago
Interesting idea, but all use cases above suggest you have to be there in-person to "pass the iPad". Seems like that requirement creates extra friction in the process.
- fleitz 16y ago
  You can definitely send a presentation to someone else, there are email/linkedin share features. Your home page will display all publicly available presentations, but we see an essential chicken-and-egg problem that is solved by positioning first as a presentation tool. Thats the immediate value, it helps an entrepreneur present to the people you already know, as well as collect information for prospective investors. eg. hallway / booth conversations at a tradeshow, quickly walk through a hand held presentation that is tactile and interactive, if they're interested, take their email down, send them a copy of the presentation and have the email on hand for follow up. You can also use it to pitch your product, rather than providing information about the company. Once the network of entrepreneurs is in place we can start attracting investors via internet means. Once both are in place we'll evaluate the next steps. What we don't want is prospective investors going to an empty site.

Wrkonce88 16y ago

As a new found "tech geek" the "angelInvestor" world can be quite discouraging and complicated. I was never one for formal education and always taught myself, however there are certain areas where information is limited one being this. So I believe this site offers a great connectivity tool to at least allow you to introduce and connect with key people.

brianstorms 16y ago

My discomfort with AngelList stems from what I see as a disproportionate advantage on the buyer side (the investors), with less advantage going to the seller side (the startups). For investors, AL is a firehose of Shiny. If you're a Shiny junkie, then connecting the IV tube of AL into your veins will keep you wired into dealflow like nothing before. Instant gratification, severe acceleration. For startups, you hear the occasional startup praising AL with stories like "we posted our profile and 3 days later we have $600K woo-hoo!" but my question is, until I see AL post detailed stats and analytics, I assume that for every success story there are dozens, scores, or even hundreds of stories where basically nothing happened. I would gladly be proven wrong: Nivi, Naval? Lastly, I get the brilliance of AL, I get that it works because there are tons of investors signing up, but it's the scale that worries me. As it scales, the win rate for entrepreneurs will just get worse. Has to. A similar thing exists in the publishing world with literary agents and editors. (Heck, there, writers (the entrepreneurs in this analogy) have to go through TWO hoops not just one, to get an advance (investment)). There are too many writers and not enough agents and even less publishers, it's a very very tight funnel and rejection is the norm. AL will probably wind up this way too, unless AL thinks of ways to improve the service to better balance the features, acountability, and responsiveness of each party. I want to see investors being forced to respond to investors who've submitted their pitch to them specifically, within a set amount of time, or lose reputation points. AL should facilitate rapid communication between both parties, but it seems that all AL does now is email investors when entrepreneurs submit companies to specific investors, and at that point AL's job is done and the ball is in the investor's court. Not enough. AL should be all over the investor and help the entrepreneur get closure as soon as possible with each investor they submit to -- even if the answer is no. Any answer is better than silence.