AngelList is a social network designed to connect startups with investors and vice versa. The founders of it were dissatisfied with how opaque the VC world was, and found a way to increase the amount of available data. The project began in partnership with just 50 volunteer investors wishing to allocate $80 million in capital, and has grown to be the leading website of its kind. Over the past three years more than 75% of startups that received seed funding from American investors used AngelList to make it happen.
Overview
AngelList has a number of distinct uses. First and foremost, it’s a startup directory. It can be filtered by industry, location and other criteria, like funding stage and amount of money raised. You can follow corporate profiles to get the latest news, status updates and press releases in your personal feed.
Given the number of companies on AngelList, some investors simply use it to look up startups they found elsewhere. The visibility of your profile depends on the number of connections you make — investors you feature, people who follow your page. Each company is assigned a ‘signal’ value, based on its performance, and some investors get startup suggestions, based on the criteria of their choice.
It’s also an investor directory with information on more than 40,000 angels, VCs and advisors. Investor profiles work like CVs: they feature the person’s investment history so that startups can easily access their competence. Just like with companies, you can keep track of what the investors are doing.
In recent years AngelList has become increasingly popular for its recruitment features, as well. Startups can post job listings, regular members can publish their résumés, and both sides can browse it all.
Last, but not least, it’s an investment website for individuals that want to diversify their portfolio. Syndicates allow investors to ‘chip into’ deals organised by top VCs in their fields. Funds let people invest in tens of startups with a single check. In either case, your investment goes straight to the recipient — AngelList simply takes a 5% cut of the exit money.
Thousands of new startups get listed on the platform each month, all hoping to get funded. If you’re reading this guide, chances are, you have a similar goal. How should you go about it?
Ground rules
Don’t go in unprepared. AngelList is not an all-in-one platform: you have to work offline to make things happen. If you aren’t an active member of your local startup community, and have no connections to speak of, nobody will notice you. So work in that direction before ever registering a corporate account.
Don’t expect investors to behave differently just because it’s an online service. You can’t catfish your way into capital — online introductions have to be followed by meetings and/or phone calls.
Don’t spam people. You can’t register and simply start messaging the founders of Reddit and Techstars. Most users don’t allow messages from people they don’t follow — and those who do, may not appreciate unsolicited pitches, either. The proper way to do it is to get ‘introduced’. If you and your desired investor have a mutual acquaintance, you can set up an ‘introduction’ and if it’s not possible — tough luck. Spamming people, even if they follow you back, is prohibited and you will be banned for it.
Don’t lie. Might be alluring to embellish things, but don’t do it. Lying to investors will get you banned and possibly persecuted, depending on your local laws.
Do It Right
AngelList employees often share tips on using their website. Here’s a guide to Angel List, based on the suggestions of Phillip Moehring, the head of AL Europe, alongside other advice from across the web.
Become active in your local community. Startups with established connections have a much better chance at getting noticed. AngelList is an extension of your local scene — keep it in mind.
List early. List your company as early as possible, way in advance of the upcoming fundraising. Amass followers, make connections — get the most out of the ‘social network’ aspect of it.
Build a good corporate profile. It is all about optimizing the price-setting process, which can only be done when you post important information. Fill out all the fields — they are there for a reason. File your listing under all the applicable categories, tag your teammates, investors and advisors.
Turn your personal profile into a comprehensive CV. Some investors look for alumni of particular universities or former employees of certain companies. Connections are everything.
Answer these three questions: Why are we looking for investors? How much money do we need? What will we spend it on? Seeking fundraising without having clear answers to these questions is close to useless. Investors don’t like ambiguity.
Build relationships. Discuss your startup with potential investors before announcing your fundraising campaign. This will help you make adjustments to your campaign, as well as help you get an idea of what you should expect once you go live. Ask people you know for introductions, then ask your new acquaintances for more introductions. AngelList lives on introductions.
Leverage the snowball effect. Committed investors attract other committed investors. This is your best chance to build momentum and get the most exposure out of AngelList. If you do everything right, and get enough traction — you might just get a Skype call from an AngelList employee. Each featured company is manually approved, precisely because they are endorsed by the website itself. If you get featured, you’ll be able to reach beyond your own network.
AngelList is impossible to game. Fundraising on this website could be as complicated as doing it in real life. However, following the advice outlined above will increase your chances of success. Good luck!
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