In this release we are welcoming VCs into the Angelsoft network, with a few new features that will make life a lot easier for them. But angels too have a lot to be excited about: We’ve improved some key areas of the program, including adding new deals, customizing industries, and inviting entrepreneurs to collaborate.
All in all we’ve had 317 updates, among them 194 were general bug fixes, 4 were new features, and 29 were smaller improvements. You can see all of them here. The highlights are below:
NEW VC FEATURES
For our venture capital users, these power features could help streamline the process:
Submit Directly to a Partner - You can now require the entrepreneur to select one of your fund’s partners, who will automatically be notified and become deal lead.
Track Deal Status - Deal Status notes, always at the top of the deal dashboard, are a new way to track the status of each deal. Only deal leads and admins may create them.
Printed Progress Report - From the Deal List, select any number of deals and click Actions -> Print Weekly Report. You will get a printed version of a report containing all the deals, their last Status Note, 3 last activity feed items, and general information about the deal, its stage, the deal lead, etc.
NEW ANGEL FEATURES
Quickly Adding Deals - Investors and Administrators can now quickly create a deal without going through the full application form. Create New Deal will open a dialog where you can add a deal by merely its name, or add the entrepreneur information and invite them to collaborate!
Smart Email Drop-box - Emailing-in deals just got smarter. You or your members may add a Deal Lead directly from the email by adding ::lead@email.com to the subject line - which will give that user admin privilege and Deal Lead status.
Better Industries - We’ve added some default industries to our list, including Clean Technology, Education, Gaming, Internet/Web Services, Mobile, and Nanotechnology.
Administrator Unsubscribe - Administrators can now unsubscribe from deal messages if they have no interest in them. Simply go to your Profile, and click Edit Preferences, then uncheck All Deal Emails.
Invite Entrepreneur Template - When inviting an entrepreneur to fill out the application, you can now use a saved template that you can change under Group Preferences.
Whether VC or Angel Investor, your feedback is very important to us. So please let us know what you think! Requests, suggestions, or questions are all welcome. Simply comment below.
Recently, Scott Shane, a very smart and decent guy who is a professor of Entrepreneurial Studies at Case Western Reserve, has been highly visible around the web blogging and commentating in support of his recently published book, Fool’s Gold: The Truth Behind Angel Investing in America.
His main thesis is that ‘people’ have a very misleading view of that rare creature known as an “angel investor”, and that angels are far less numerous, generous, and active than ‘everyone’ thinks. In support of this he has extensively research the subject, pulling together all of the available statistics on the field, from the Angel Capital Association, the Center for Venture Research, and even us at Angelsoft (which we’ve been happy to provide.)
As I read his book, and many of his subsequent blog postings and commentaries, I am alternately baffled, bothered and bewildered by his conclusions. First, let me say that his research is legitimate and (as far as anyone, including me, can tell) accurate. So I am not disputing his facts. What I object to, however, is that he sets up straw men to demolish, in order to make lurid points that I believe lead his readers to draw inaccurate conclusions on the state of angel investing.
Take, for example, his contention that angels in America invested “only” as much money last year as venture capital firms. Is the fact of “angel investments = vc investments” accurate? Yes (to the best of our knowledge.) But phrasing it as “only as much” somehow implies that someone is maintaining it is much more. Hunh?
What we and the facts all agree on, is that LAST YEAR ANGELS INVESTED $26 BILLION IN US COMPANIES!! Who on earth is claiming it is anything higher than that??
Meanwhile, in a recent blog post on Small Business Trends, Scott opines that so-called “active investors” are a myth, because even among the cream-of-the-crop angels, the self-reported average time they spend with their portfolio companies is a miniscule 41.9 minutes a week [gasp!] Once again, I can confirm his facts, but substantively disagree with his conclusions!
I’m one of his “cream of the crop” active angel investors. I’m the Chairman of New York Angels (one of the largest and most active angel groups in the country, with 22 deals this year alone), have 70+ companies in my personal portfolio, and spend my full business time on angel-related activities. That said, it would be absolutely correct to say that there are some (indeed, many) ventures in which I have invested on which I spend less than 41.9 minutes per week. And the problem with that is??
I’m not running the business, the entrepreneur is! The last thing he or she wants is me looking over his or her shoulder and micro-managing the company. If that’s what I need to do, then I shouldn’t have invested in this venture in the first place.
Think about it this way: if, after pulling together an investment round of half a million dollars for a company (including corralling the investors, structuring the deal terms, and doing due diligence analysis, all for no compensation, and then investing $100,000 of my own money), I followed through by serving on the company’s Board of Directors (which would be active involvement indeed), kept updated by asking for and reading weekly management reports (which is way more than most CEOs want to provide), referred the CEO to a dozen high-level sales and business development prospects from my network during the year, and then introduced them to five top-tier venture capital firms for potential participation in a follow-on investment round…would that be the kind of “active” angel investor you’d like to have?
I think the answer from any entrepreneur I’ve ever met would be “yes, in a heartbeat!”
Now, let’s look at my time involvement post closing:
You can create a deal in Angelsoft by sending or forwarding an email to your drop-box email (newsubmissions@YourGroupName.angelgroups.net ).
Remember these simple rules to maximize your use of the drop-box email:
The subject of the message will be the Deal Name.
The files attached to the email (up to 10MB) will go in Documents.
The body of the message will be posted under Messages.
This will speed things up, and allow you to start tracking ALL your deals in Angelsoft.
For a more advanced option, you can also add ::referral source to the subject line, to indicate the person or organization who referred the entrepreneur to you. For instance, if a company named ABC General was introduced to you by Sam Smith, then the subject line should be: ABC General::Sam Smith.
At Angelsoft we spend most of our time making sure we are doing everything possible to build tools that serve both Entrepreneurs and Investors. It’s a tough balancing act because the needs of both often conflict. The one thing I’ve heard most from entrepreneurs lately is that they need the plans submitted to Open Deals to be better promoted to our 17,000 investors.
We took steps to help them out which resulted in a doubling of the number of views that Open Deals subscriptions receive. The feedback from our Investors has been positive as well. Making both side of the equation happy is central to our product decisions and we think we succeeded with these new features.
To take advantage of these new features you can post your deal to Open Deals where it will be accessible to the 17,000 investors that use Angelsoft. Screenshots
Investor Community live deal-feed added to the Investor dashboard
The right side of the investor dashboard is a live feed of the closest deals to that investor. The dashboard is the entry point of every investor into Angelsoft. The middle section of the dashboard displays updates on all Open Deals they are interested in. Screenshot
Investors now receive an email every 2 weeks with the 5 closest and 5 highest rated deals
It is a lot to ask investors to go seek out entrepreneur plans. Now we email the investors in our system every two weeks with a simple email informing them of the 5 closest deals to them and the 5 highest rated during the previous two weeks. Our first email went out before Thanksgiving and received tremendous response. Screenshot
Entrepreneurs now receive more feedback from investors. Investors can easily leave you feedback in the form of a rating or written feedback. You can see ratings and respond to feedback on your Application Manager. Learn more on our blog here and here
This is a major step forward in improving the funding process for entrepreneurs. Spend some time with these new features and leave comments with any feedback that you have.
Last week we conducted a survey that asked our Angel Investors how they felt about exposing more information about themselves on our Angel Investor Directory. The idea was to help our 450 Angel groups network more effectively and to help entrepreneurs make intelligent choices about whom to apply to for startup funding.
We wanted to get a sense of how valuable this information would be to entrepreneurs, so we reached out to them to tell us their thoughts on the new Group Profile we are building.
You can see our current wireframe below:
(click to expand to full-size)
The results were a little more expected than our Investor survey, with 95% of the the entrepreneurs responding claiming that the information would be valuable to them.
You can take the original survey here and see the results here.
With both Investors and Entrepreneurs in near perfect agreement, we are excited to move forward with the feature. We should be releasing it to Investors by the end of January, allowing them time to fill out the Group Description and Investment Criteria sections appropriately. The feature will be visible to entrepreneurs towards the end of February.
The Angel Capital Association released results of a survey that they did today on their web site. They report mixed results projected for angel investing projections in 2009:
While full data for 2008 investments are not yet in – as many angel groups expect to finalize investment deals in December – the picture from the survey is that total angel group investments in North America will decrease by at least ten percent from 2007. Survey data for the ACA Angel Group Confidence Report was collected from leaders of ACA member angel organizations November 6 to 18th. About two-thirds of all ACA member organizations participated in the survey.
Based on survey responses, the average size of group investment per deal in 2008 ($280,936) is about six percent larger than the 2007 average, but the average number of investments per group (6.1) will be about 16 percent less than 2007. The average total funding by each group is therefore estimated to be about $1.72 million, more than ten percent less than the 2007 figure of $1.94 million.
Group leaders had been optimistic about increasing their investments at the beginning of this year, in a survey conducted in January and February, 2008. But in this November survey, nearly half of the respondents (47.9 percent) found their activity was less than they had predicted for 2008. Activity was higher for 16 percent of the angel groups and another 36.2 percent found that their investment activity was about the same as they had forecast.
Also, David S. Rose, our CEO, was interviewed by Tech Confidential today on his view on the impact that the current market climate will have on angel investing. His comment:
TC: A recent survey by the Angel Capital Association indicates that angel group investments in North America this year will decrease by at least 10% from last year. Why do you say the role of angels will increase?
Rose: In the near term we will see a divergence in the angel community. The “casual” angels, people at the lower end of the accredited investor spectrum, will likely pull back during the crisis because their base of investable capital is shrinking, and there is going to be a significant movement away from risk. At the same time, the “serious” angels are likely to maintain or increase their early-stage investing during this period, because innovation doesn’t stop during a recession, and valuations are now quite attractive for startup deals in this tight market.
In the longer term, angels will unquestionably be playing a larger role in the startup space. Plummeting technology and distribution costs have made it possible to start highly scalable businesses anywhere, at any time, and on a shoestring budget. Because of the low capital requirements for these types of businesses, it is very difficult for traditional venture funds to get involved early in a company’s life cycle, since the funds need to put many millions of dollars to work. At the same time, the universe of active angel investors, leveraged by organized groups as well as by global platforms such as Angelsoft, is rapidly expanding to step in and provide funding at the early stage.
Today, in the U.S. early-stage market, angel investors and traditional venture capital funds invest roughly the same amount annually, between $25 billion and $30 billion. I believe that within 10 years, angels will be investing more than twice as much as VCs into startup and early-stage companies.
We think that both articles are valuable reads for anyone seeking angel or VC funds next year. Its clearly a challenging market, but the most important thing to take away from the articles is that there indeed will be funds in 2009 for the right companies at the right valuation, despite the market climate.
Angel investor groups have a reputation of being extremely guarded about their activities. As most of you know, we’ve spent the last 4 years helping to make the activity of this hugely valuable sector of our economy more transparent. As part of these efforts, we’re building Group Profiles for all of our 450 angel investor groups to help them network more effectively and to help entrepreneurs make intelligent choices about whom to apply to.
You can see our current wireframe below:
If you take a close look at the screenshot (click on it and expand it to full-size), you can see that we’re encouraging our angel investor groups expose some very sensitive information about themselves. Obviously, our highest priority has ALWAYS been to protect our groups, so we decided to send them a survey to get a sense of how open they were to this idea. The survey asked if they would be willing to show this information and if so how valuable it would be to their members, prospective investor partners, and to entrepreneurs.
The response was somewhat surprising: An overwhelming number of our groups thought this information would be valuable not only to their investors and fellow group managers, but ALSO to entrepreneurs. I’ve linked to the original survey and the response details, but combining the response, you get numbers like these:
Of the 60 angel investment groups that replied, a staggering 62% felt that even the most sensitive data would be valuable to entrepreneurs and only 19% wanted to hide this information from them. If you discount the 4% that didn’t even want to share this information with their own membership, only 15% wanted to keep this information specifically from entrepreneurs.
Obviously there is now a raging debate here about how accurate the survey is, so we’d like you to chime in. Are angel investment groups realizing the value of transparency, or are these results meaningless? We’re obviously hoping for the sake of the angel industry that it’s the prior!
We’re sending out the survey to our entrepreneur community tomorrow and will post those results then.
David Teten, a serial entrepreneur and author of The Virtual Handshake: Opening Doors and Closing Deals Online, will be holding a webinar next week called, “Where are the Deals? Private Equity Fund’s Best Practices in Deal Origination” David will be talking a lot about the use of Angelsoft to both source deals from the Investor Community, and also using Angelsoft to manage all of your deal flow.
Other things that will be discussed:
-> In the current tough climate, how can you lower your deal origination costs?
-> How are you positioning yourself to become your target’s preferred investor?
-> What are the primary sources of deal flow for institutional investors?
-> How can you use online networks and other “Web 2.0” internet technologies to increase your pool of sources?
-> What are the earmarks of a potential investment opportunity?
-> What best practices from sales and executive recruiting can you apply to the deal origination process?
-> How do you increase your inflow of useful referrals?
-> What is the best way to make warm cold calls?
As I mention early and often to anyone who will listen, the sensei of state-of-the-art presentations (which you will use to raise startup funding, inspire your team and sell your product to customers) is a gentleman named Garr Reynolds, the former Manager of Worldwide User Group Relations at Apple Computer. He writes the most influential blog on the subject, Presentation Zen, which was recently turned into the most influential book on the subject, Presentation Zen: Simple Ideas on Presentation Design and Delivery (Voices That Matter), a copy of which I present to every CEO who comes to me for training.
I have been asked to essentially talk about the contents of the book. I will indeed talk about the themes and ideas covered in the book, however, I have entitled the presentation How to Think Like a Designer (and why it matters). The applications of the items I discuss will focus on presentations, particularly presentations that are given with the aid of slideware, but the ideas can be applied to other types of presentations and even other types of disciplines such as web design and professional communications of all types. I have come up with a list of 10 ways to “think like a designer” with examples for each and applications for presentation design. Yet, there are of course more than 10 things we can learn from designers that may help us in our own work, so if you’d like to share your list — or even just a few tips of your own — please share those below. I appreciate your comments. Look forward to connecting with you during the webcast.
I can’t recommend this highly enough, but if you are not able to make the live webcast (at which you’ll be able to ask questions), the archive of the webcast should be available about 72 hours after the live event. Garr’s presentation, blog and book are mandatory reading for any entrepreneur who is serious about communicating his or her vision.
Based off an internal e-mail about search engine optimization strategy:
When you start determining the SEO strategy for your site, the first instinct might be to try and figure out how search engine bots think and act and go from there, but that’s only half the battle. It doesn’t really matter if you know how a bot interacts with the web if you also don’t think about how it sees the web. So, what follows is a little thing I like to call “SEO and Your Grandma”.
Something that you need to understand about bots is… they’re dumb. Okay, maybe that’s a bit harsh. It’s more that bots don’t comprehend as much as a regular web browser. Since what they’re really concerned about is text and links, that’s how most of them see the world. They can’t parse what’s in images (only what they link to) and they don’t really care about new-fangled things like CSS (first working draft published in 1996) and JavaScript (first implemented in 1995). They’re sort of like your grandmother in that sense, and not the cool one who listens to Coldplay and tells dirty jokes. They’re more like the traditional granny that sees the world simply, doesn’t really keep up with the latest trends, and if they encounter something they’re not familiar with, they just ignore it, or even forget about it altogether and head back home. Therefore, if we want granny to pay attention to something, we have to try and see how granny sees.
So, how do we do that? Easy–turn off CSS, JavaScript, and images. Yes, it can be done. There are prefs to disable all three in every major browser, but if you want to do it much more easily in Firefox, check out Chris Pedrick’s Web Developer extension. You’ll have a nifty new toolbar that will let you turn off images, JavaScript, and CSS in a couple clicks each, and you’ll also have a bunch of new tools that let you handle cookies, window sizing, validation, and some other stuff you’ll find fun (if you’re a front-end web developer). If you’re really hardcore, though, you can try looking at pages in just a text-based browser. There’s Lynxlet for OS X, some Lynx ports for Win32, and I’m sure most of you *nix people already know what to do. After trying to browse for a few minutes with those, you’ll have a new understanding of the word “tedium,” but on the plus side, you’ll have one app that instantly puts you in bot mode.
And that’s all there is to it: just a small install and you’re ready to go. If you start making sure to give your public pages a quick look with your granny goggles before letting them loose, you’ll be able to eliminate a lot of potential SEO problems. Looking at pages this way can also help you figure out where you can make improvements, since you’ll be seeing things more from a bot’s perspective. At the very least, it’ll help put you in the correct mindset for SEO, and you can start building from there.
After trying to browse for a few minutes with those, you’ll have a new understanding of the word “tedium,” but on the plus side, you’ll have one app that instantly puts you in bot mode.