The New York Times posted a great article on finding Angel funding. Our four favorite takeaways are from Ted Ray of FlyRight:
“Have a product on the market. Nothing speaks more loudly than revenue coming in.”
“Do not ask other people for money unless you have spent your own.”
“The business plan you show to potential investors should be concise. He [Ted] suggested using software on Angelsoft.net.”
“Explore every angle. If an Angel says no, ask him for the names of four other Angels who might say yes…My goal is to get 100 introductions to get 10 meetings to get three presentations to close one deal.”
The team at Angelsoft tries to be as active as possible in the entrepreneur community. One of the ways we do that is to attend conferences like SXSW and, most recently, the Web 2.0 Expo. Here is a rundown of our experience at the Expo in San Francisco.
Funding Q&A
Jason Schwartz (Community Manger) and Evan Bartlett (Senior Account Manager) lead a packed session at the Web2Open on funding. The Web2Open is the free section of the Web 2.0 Expo that I hope more entrepreneurs take advantage of in the future.
The primary topic of discussion was helping entrepreneurs understand where their company falls in relation to a startup an investor would consider ‘fundable’. I plan on blogging more on this topic later.
Sales
Evan Bartlett lead a Web2Open session on Sales covering how to get a meeting, and figuring out who the key decision maker is in an organization. Sales is often an overlooked part of a startup and some quality information was shared on how to succeed.
Angelsoft Entrepreneur User Group Meeting
Entrepreneurs from all over the Valley came to speak with us about their experience with Angelsoft. Entrepreneur feedback is crucial for us to build the best product possible, and I appreciate all of you who came out. I also spent some time going over their one-pagers to tweak them for optimal effect with investors. For those of you who were able to join us, I hope you found the meeting as informative as I did.
Challenge and Opportunity: Angel and VC Funding During an Economic Crisis
I had the pleasure of interviewing Angelsoft’s CEO, David S. Rose, during a session at the Web 2.0 Expo. The hour long interview covered a lot of ground including the landscape before and after September, and how this has changed investor’s strategy. More on this in a future blog post. David and I had the opportunity to speak with entrepreneurs who spent another hour with us after the session. If any of you did not get your question answered, feel free to ask it in the comments below.
Silicon Alley Insider is a must read blog for every entrepreneur in the tech space. Bookmark it, add it to your feed reader, and follow along.
This summer they are hosting their first conference and it’s shaping up to be a must-attend event. Startup 2009 will be one-day conference that will feature interviews with entrepreneurs, expert panels, networking, and a 10-company startup contest. The 10 companies selected will compete for bragging rights, buzz, and a $50,000 prize!
They are using Angelsoft to manage the screening process for the contest so if you already have an application, all you need to do is apply.
The Contest
Emerging online companies are invited to submit applications to present at the conference. Their panel of VCs and experts will evaluate the applications in Angelsoft. They will then choose 10 finalists from the pool of applicants to present at the event.
Applying to the contest is free and all companies that apply will be evaluated by General Catalyst, Softbank, and Venrock for possible investment. One of the finalists will also win a $50,000 prize, which will consist of a $25,000 cash investment from General Catalyst Partners and $25,000 of in-kind services. The latter will include:
Up to 6 months of office space in NYC.
Marketing campaign with Silicon Alley Insider.
Legal services from a top-notch law firm.
How to Apply
Emerging companies in the online industry are invited to apply. (They’re defining “emerging” as less than a few million of seed capital.) Concept-only companies are fine, but you will need to describe your planned product and value proposition in detail.
Here’s how to apply:
1. Log-in to Angelsoft on the right hand side of the Startup 2009 Profile to start an application. If you do not have an Angelsoft account click Sign Up directly under the Login button.
2. Ignore the “Apply For Funding” part. You’re applying for the contest, not funding.
3. If you already have an Angelsoft account, you will be asked if you want to copy your answers from a previous application. If not, fill in the information and upload your business plan–any other uploaded material will be discarded.
As we are finally catching up from our time in Austin, I wanted to write about our first Entrepreneur User Group meeting at SXSW Interactive.
We want to ensure that entrepreneurs have the best possible experience when working with the investors who use our deal flow management software.
The team really enjoyed having a chance to sit down face-to-face with our entrepreneurial community to hear how we’re doing and what we can do better. Balancing the needs of entrepreneurs and investors is a tricky challenge, but one we are committed to get right. We plan on hosting User Group meetings in the future so you can share your feedback on our progress and learn how to best utilize our tools to find funding.
Roger Ehrenberg, one of the smartest and most active angel investors in New York (and a member of Angelsoft-based New York Angels) recently led a $1.25 million angel financing of Domdex, an exciting new company in the Internet marketing space. In this interview from the DailyDeal with Mary Kathleen Flynn, Roger discusses the new breed of serious angels, and why they can be a viable alternative to traditional venture financing. Disclosure: I was one of the angels who participated in this round.
Today we launched an Investor Search Engine that includes all of the VC Funds and Angel Groups in the US. The tool includes a wide array of filters and sorts to help entrepreneurs narrow their funding search to the perfect group. We believe this a important step forward in bringing transparency and efficiency to the early-stage industry, and we’d love to hear your feedback.
Angelsoft.net Launches the Definitive VC & Angel Investor Search Engine
New York, NY (March 09, 2009) – Few would argue that it’s getting easier for startup companies to find investors. That however, is the bold claim made by financial technology provider Angelsoft.net, who today announced the release of theirInvestor Search Engine. The surprising news is that, given their unprecedented access to real data about real investors, they might just be right.
The Search Engine contains detailed profiles on over 1,000 venture capital firms and angel investment groups, with a dizzying array of sorts and filters reminiscent of Web 2.0 travel search engine Kayak.com. Entrepreneurs can filter investment firms based on how much they invest and what terms they typically offer, as well as on company-based criteria such as industry, location and stage. The real revolution, however, is the ability for entrepreneurs to sort the 450 investment organizations who use Angelsoft’s Investor Tools by actual metrics mined from the software, like each group’s average response time, number of applications received each month, and even real investment amounts.
“Entrepreneurs have never had access to this kind of tool before, but more importantly, they’ve never had access to this kind of data,” explained Angelsoft’s CEO, David S. Rose. ”Investors have traditionally been very guarded about how they manage their pipeline.”
When asked how they convinced their clients to open up, COO, Ryan Janssen cautioned, “Not all of them have, but our VCs and angel groups consistently rank ‘inappropriate applications’ as the biggest burden on their resources, and most of them know that will never change unless entrepreneurs have easier access to better information.”
It’s a poorly guarded secret that investors prefer to back experienced entrepreneurs, or at least those who have been referred by people they know. As such, it is increasingly difficult for new entrepreneurial talent to get discovered and funded. Most venture capital firms and an increasing number of professional angel groups no longer look at unsolicited business proposals.
“We’ve been battling this problem for the last 5 years,” says Janssen. “Because our platform powers the large majority of organized angel groups, as well as an increasing number of leading venture capital firms, the system can automatically ‘black-list’ entrepreneurs who apply indiscriminately, while promoting those companies that are the right match for a particular firm.”
Angelsoft also provides a suite of tools to help entrepreneurs manage their funding search, including an industry-standard online application, news feeds to monitor their progress as they move through a firm’s review process, and integration with the LinkedIn business networking site to quickly reveal their existing connections to each investment group. ”There simply is not a lot of trust between investors and entrepreneurs right now,” explained Rose. “We believe that communication and transparency is the key to rebuilding that trust, and the Angelsoft platform is taking major strides in this area.”
Once your company has received funding, this tool helps track your deal terms. You can also track the percentage of your company owned by each investor.
Who will see the information I enter here?
When an investor commits funds to your company, they will be brought to a similar page where they can enter the amount invested. They’ll be able to see other investors in their group, as well as see how much money has been committed by outside investors (though they will not be able to see the names of those outside their group).
Who can edit this information?
Investors can enter their investment amount, which will automatically show up on your Investor Relations page. You can edit any information and add investors who have not entered an amount.
Angelsoft is the industry standard deal-flow management software for VC Funds and Angel Investment Groups. 450 groups use the software as the exclusive means of managing investment opportunities from submission to investment. The Funding Stories page is a current directory of compaines that have been funded by investors using our toolset.
When an investor finds a deal the or she is interested in, they may “refer” it out of Open Deals and into their group’s Angelsoft account.
When this happens:
The admin of the investor’s group is notified by e-mail. For an angel group this is usually the General Manager. For a VC fund this generally includes all partners.
A deal room is created in the group’s Angelsoft account, which will be used to collaborate internally and communicate with you.
A new application is added to your Application Monitor. You can edit this application and add additional documents. Note: A “referred” deal does NOT count towards your 3-submission limit.
When you apply directly to a group using the Investor Search Engine, the group also has the option to “refer” your deal to another investment group that they think might be interested. They may do the same by referring a deal from Open Deals.
The Investor Search Engine provides access to a database of all of the VC funds and angel groups in North America and a considerable number on other continents. You’ll be able to apply to any of these groups using a single Angelsoft application.
If there’s an investment group that you don’t see listed here, please e-mail us at feedback AT angelsoft.net.
There are five sections of the Investor Search Engine:
First, be sure your location is correctly set in the filters column. Your location should automatically show up here. If it doesn’t, click “change location.” You’ll see all of the groups available in the search engin, sorted by “closest to you.”
Each search result has 3 elements:
a. The investment group name and a link to their full profile, which includes information about their funding criteria.
a. The investment group name and a link to their full profile, which includes information about their funding criteria.
b. Investment group type, location, and submission fee (if any). Fees are set by the investment group and do not go to Angelsoft.
c. Investment group activity statistics, pulled directly from the Angelsoft system. Go here for a full description of each statistic. You may notice that not all of the investment groups display these. You can learn more about that here.
In the left hand column, you can filter out groups that don’t invest in your type of company. All of the available data is described by each investment group. Go here for a full description of each filter.
Once you have filtered down to best investment groups for your funding needs, you can sort those groups using the header on the top of the screen. All of the sortable data is actual investment group activity pulled from the Angelsoft system. Go here for a full description of each criterion. You may notice that not all of the investment groups display activity statistics. You can learn more about that here.
When you click on a search result, you’ll be brought to the selected group’s profile. The profiles contain information that has been automatically pulled from the Angelsoft system as well as data the groups have entered themselves.
This data is all pulled live from the Angelsoft system.
a. Group name and website.
b. Live group activity statistics pulled from the Angelsoft system. Only Angelsoft Groups will display these statistics. Learn more about Angelsoft Groups here.
c. Group location.
This data is entered by the investment group. It includes the type of companies they invest in, as well as a list of their portfolio companies.
This section includes information about individual members of the investment group.
a. The partners in each venture fund and the General Manager of an Angel group are listed here with links to their profiles.
b. If you are currently logged into LinkedIn, connections within the investment group will show up here. This includes 1st, 2nd, and 3rd degree connections.
The Deal Funnel shows the percentage of deals that make it through each stage in the groups process. The Member Industry Expertise section displays individual investors’ expertise. This is a chart of the aggregate expertise for the entire investment group.
You can sign up for an Angelsoft account or log in if you already have one. If you’ve already filled out an Angelsoft application, you’ll be asked if you want to use the same information. You can make edits to your application before submitting it to a group.
Silicon Alley Insider is a must read blog for every entrepreneur in the tech space. Bookmark it, add it to your feed reader, and follow along.
As we are finally catching up from our time in Austin, I wanted to write about our first Entrepreneur User Group meeting at SXSW Interactive.
