3 ms·
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 si
by 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.