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There are several angel groups that charge money to present to them. I would not recommend doing this. Angel groups generally are worthless (out of 102 YC-fun

by pg 18y ago

There are several angel groups that charge money to present to them. I would not recommend doing this. Angel groups generally are worthless (out of 102 YC-funded startups prior to this cycle, zero got money from angel groups), and the ones that charge you to present seem particularly dubious. If they had good deal flow, they wouldn't have to charge you to pay their operating expenses; angels would pay them for access to it. Plus the best angels tend not to be members of these groups; they don't need to. Which means this is a world where lame startups present to lame investors.

andrewljohnson 18y ago
Thanks for the advice Paul. You'll have our application in the summer, and I'll skip this site.
DanielBMarkham 18y ago
Paul -- could you elaborate a bit here? We all see hundreds of angel groups all over the world. There must be thousands or even tens of thousands of angel investors. How come "Angel groups generally are worthless"? Unable to make decisions? Poor management? No funds to invest? People just fishing for good ideas? etc? I know a lot of people have tried something like "E-bay for Funding Startups" but not to much success. What's the major obstacle here?
- pg 18y ago
  I'm not sure what the cause is. I've just noticed that I never come across startups who've been funded by them. If I had to guess, I think the problem might be the investors they attract. None of the top angels I know would join an angel group; they're all already plugged into the startup world, usually because they came from it themselves.
  - brlewis 18y ago
    I came across framemedia, not that that proves anything. http://www.commonangels.com/loader_funded.html http://www.commonangels.com/loader_funded.html
mathewgj 18y ago
+1! Totally agree. There are serious angels who co-invest fairly regularly with other angels they know and trust - but these organized groups, especially the pay to pitch ones are a bad neighborhood.
- mathewgj 18y ago
  'regularly'
davidsrose 18y ago
Paul, with all due respect, I have to disagree. As both the Chairman of New York Angels, and the CEO of Angelsoft (which grew out of our perceived need for a comprehensive deal management platform), I think it's both inaccurate and unfair to state that angel groups are "generally worthless" and "the best angels are not members". Taking our own group as an example, we have directly funded over $35 million into 54 companies during the past five years, have had successful exits in sales to companies like CBS and Kodak, and have a membership that includes 75 active, participating angels such as Esther Dyson, Scott Kurnit, Chris Anderson, Roger Ehrenberg, Brian Cohen, Charlie Federman, Lewis Gersh, David Hirsch and many others, all of whom commit to investing at least $100,000 annually. This year we funded about $4 million into 22 companies. How far off are those stats from yours at yC? For my own part, I have personally invested in over 70 startups and serve on half a dozen early stage boards. If that means I'm a "lame investor", I'm a little confused. Angelsoft was founded to bring to the world of angel investing the type of infrastructure, tools and communications that venture funds and commercial organizations like yCombinator already have. Since angels are, by definition, part-time investors for whom this is not a primary occupation, it has always been a pretty chaotic and haphazard way to put to work the $25 billion annually that angels in the US invest (which is just about the same amount as all VCs put together.) Now that something like 90% of the angel groups in the world, with 15,000+ accredited investors in 43 countries, have all standardized on a single platform, we're finally beginning to bring some order to the chaos. The Investor Community on Angelsoft was designed, as Ryan Janssen pointed out, to enable groups to syndicate deals with each other. At New York Angels, we have worked together with groups from Boston, California, Washington, Florida, Texas, Nevada, Missouri and Connecticut to fund cool startups...something that would have been logistically impractical prior to the advent of a single, standardized platform. Now that we've opened it up to direct submissions by entrepreneurs, we seem to be on our way to solving the biggest challenge of angel investing: "I want to increase my deal flow, but I don't want to be spammed by having to respond to every company asking for funding". Instead of having entrepreneurs apply directly to one group for which they may well not be appropriate, the Investor Community allows angels to browse a much wider array of deals, and then affirmatively bring to their group only deals in which they have an interest. As Ryan noted in an early response here, companies that posted to the Investor Community and then were referred into groups by the angels themselves were over 200% more likely to get funded. Paul, we both know how tough the funding environment is for startups, and we both know that your small investments and support into 102 companies, and our larger investments and support into 54 companies, are only drops in the bucket when one considers that there are over 600,000 companies started each year in the US. But angels and angel groups really ARE a legitimate part of the ecosystem, and I don't think you're doing a service to your readers by disputing that. yCombinator was a brilliant idea with which you are doing a superb job of execution, and your results speak for themselves. You don't need to promote yC by slinging mud at others who are equally active and supportive of entrepreneurs.

by pg 18y ago

andrewljohnson 18y ago

Thanks for the advice Paul. You'll have our application in the summer, and I'll skip this site.

DanielBMarkham 18y ago

Paul -- could you elaborate a bit here? We all see hundreds of angel groups all over the world. There must be thousands or even tens of thousands of angel investors. How come "Angel groups generally are worthless"? Unable to make decisions? Poor management? No funds to invest? People just fishing for good ideas? etc? I know a lot of people have tried something like "E-bay for Funding Startups" but not to much success. What's the major obstacle here?

pg 18y ago
I'm not sure what the cause is. I've just noticed that I never come across startups who've been funded by them. If I had to guess, I think the problem might be the investors they attract. None of the top angels I know would join an angel group; they're all already plugged into the startup world, usually because they came from it themselves.
- brlewis 18y ago
  I came across framemedia, not that that proves anything. http://www.commonangels.com/loader_funded.html http://www.commonangels.com/loader_funded.html

mathewgj 18y ago

+1! Totally agree. There are serious angels who co-invest fairly regularly with other angels they know and trust - but these organized groups, especially the pay to pitch ones are a bad neighborhood.

mathewgj 18y ago
'regularly'

davidsrose 18y ago

Paul, with all due respect, I have to disagree. As both the Chairman of New York Angels, and the CEO of Angelsoft (which grew out of our perceived need for a comprehensive deal management platform), I think it's both inaccurate and unfair to state that angel groups are "generally worthless" and "the best angels are not members". Taking our own group as an example, we have directly funded over $35 million into 54 companies during the past five years, have had successful exits in sales to companies like CBS and Kodak, and have a membership that includes 75 active, participating angels such as Esther Dyson, Scott Kurnit, Chris Anderson, Roger Ehrenberg, Brian Cohen, Charlie Federman, Lewis Gersh, David Hirsch and many others, all of whom commit to investing at least $100,000 annually. This year we funded about $4 million into 22 companies. How far off are those stats from yours at yC? For my own part, I have personally invested in over 70 startups and serve on half a dozen early stage boards. If that means I'm a "lame investor", I'm a little confused. Angelsoft was founded to bring to the world of angel investing the type of infrastructure, tools and communications that venture funds and commercial organizations like yCombinator already have. Since angels are, by definition, part-time investors for whom this is not a primary occupation, it has always been a pretty chaotic and haphazard way to put to work the $25 billion annually that angels in the US invest (which is just about the same amount as all VCs put together.) Now that something like 90% of the angel groups in the world, with 15,000+ accredited investors in 43 countries, have all standardized on a single platform, we're finally beginning to bring some order to the chaos. The Investor Community on Angelsoft was designed, as Ryan Janssen pointed out, to enable groups to syndicate deals with each other. At New York Angels, we have worked together with groups from Boston, California, Washington, Florida, Texas, Nevada, Missouri and Connecticut to fund cool startups...something that would have been logistically impractical prior to the advent of a single, standardized platform. Now that we've opened it up to direct submissions by entrepreneurs, we seem to be on our way to solving the biggest challenge of angel investing: "I want to increase my deal flow, but I don't want to be spammed by having to respond to every company asking for funding". Instead of having entrepreneurs apply directly to one group for which they may well not be appropriate, the Investor Community allows angels to browse a much wider array of deals, and then affirmatively bring to their group only deals in which they have an interest. As Ryan noted in an early response here, companies that posted to the Investor Community and then were referred into groups by the angels themselves were over 200% more likely to get funded. Paul, we both know how tough the funding environment is for startups, and we both know that your small investments and support into 102 companies, and our larger investments and support into 54 companies, are only drops in the bucket when one considers that there are over 600,000 companies started each year in the US. But angels and angel groups really ARE a legitimate part of the ecosystem, and I don't think you're doing a service to your readers by disputing that. yCombinator was a brilliant idea with which you are doing a superb job of execution, and your results speak for themselves. You don't need to promote yC by slinging mud at others who are equally active and supportive of entrepreneurs.