Brief Thoughts on Angel List(500hats.typepad.com)
500hats.typepad.com
Brief Thoughts on Angel List
http://500hats.typepad.com/500blogs/2011/02/brief-thoughts-on-angel-list.html
37 comments
best way to start on angel list is:
1) get at least one notable angel to introduce it / submit it
2) ideally have them introduce you to a few others (privately)
3) once you have some visibility / traction with a few folks, then set your listing public and open it up to the rest (if you want)
this should probably be a separate thread here or on Quora to discuss best techniques for marketing a deal on Angel List. i'll try and write a blog post on this or a Quora question in the future. it's worth diving into more.
this should probably be a separate thread here or on Quora to discuss best techniques for marketing a deal on Angel List. i'll try and write a blog post on this or a Quora question in the future. it's worth diving into more.
That does make sense, and if that is the way it works, that's the way it works. The name AngelList, at least from an entrepreneur's stand point, might be misleading then. It seems to me that AngelList is more of a list of potential start-ups for angels than it is a list of potential angels for start-ups. While it can be used either way, to me it seems that the benefit is more for the angel than the start-up looking for funding. Maybe it should be called StartupList?
It worked this way long before angellist. You need some combination of amazing team, traction, or social proof. AngelList features a huge bunch of angels which is a HUGE benefit to the startup. Finding angels is hard. But just because they are all in one "room" doesn't mean that you don't have to impress them in the same way that startups have always needed to impress.
The good news is that once you DO get get something eye-popping (an amazing prototype, a great advisor, a brilliant growth curve), AngelList can be like gasoline on a match-- you close faster and with better terms (at least that's what I've heard from multiple sources).
The good news is that once you DO get get something eye-popping (an amazing prototype, a great advisor, a brilliant growth curve), AngelList can be like gasoline on a match-- you close faster and with better terms (at least that's what I've heard from multiple sources).
There is a certain way to use it, just like any tool. And the folks at AngelList helped us out with it.
If used correctly it helps angels see higher deal flow and founders raise capital more efficiently.
If used correctly it helps angels see higher deal flow and founders raise capital more efficiently.
Initially, tt was actually called "StartupList."
A few points that may help you:
1. AngelList has a backlog of submission on the investor and startup sides. It may be you just haven't been reviewed yet.
2. Add more info. When you think you have enough, add more. Info on your startup, fill out bios of key people, etc. etc.
2a. Unless you have figured out how to print money, you at some point have to sell something to someone. If you can't put effort into selling yourself on AngelList, that shows investors you are bad at running a business.
2b. See item #1. Someone at AngelList has to review your application and work directly with it. Do you call up customer service and refuse to give your account number? Of course not. You are less likely to get exposure if the employees of AngelList don't have to do a bunch of leg work to complete your app for you.
3. You may just have a horrible idea. As much as AngelList is a service for startups, it is a service for investors as well. It is possible your "Foursquare for Pets" was just marked as hidden.
4. Your AngelList submission is not the template for your final term sheet. List numbers on the low end to drum up interest, and if you have a good idea demand will swing things into your favor.
1. AngelList has a backlog of submission on the investor and startup sides. It may be you just haven't been reviewed yet.
2. Add more info. When you think you have enough, add more. Info on your startup, fill out bios of key people, etc. etc.
2a. Unless you have figured out how to print money, you at some point have to sell something to someone. If you can't put effort into selling yourself on AngelList, that shows investors you are bad at running a business.
2b. See item #1. Someone at AngelList has to review your application and work directly with it. Do you call up customer service and refuse to give your account number? Of course not. You are less likely to get exposure if the employees of AngelList don't have to do a bunch of leg work to complete your app for you.
3. You may just have a horrible idea. As much as AngelList is a service for startups, it is a service for investors as well. It is possible your "Foursquare for Pets" was just marked as hidden.
4. Your AngelList submission is not the template for your final term sheet. List numbers on the low end to drum up interest, and if you have a good idea demand will swing things into your favor.
Dave strikes me as rude, obnoxious, and difficult to read. But more importantly, he strikes me as correct. The vast majority of VC's do a terrible job at investing. He's bold enough to try a new way - the index fund of the startup world.
As they say, those who say it can't be done shouldn't interrupt those who are doing it.
Who knows if it will work, but I'm eager to see the results.
Edit: when I say Dave, I mean his writing style - I've never met the guy.
As they say, those who say it can't be done shouldn't interrupt those who are doing it.
Who knows if it will work, but I'm eager to see the results.
Edit: when I say Dave, I mean his writing style - I've never met the guy.
I think I may be the only person on HN (besides Dave himself) who actually enjoys his writing style. Then again, I grew up on the East coast playing poker and basketball everyday, so smack talk is second nature to me.
Most people in the Bay Area seem to be in a competition to see who can be the most modest, which has never been my style.
Most people in the Bay Area seem to be in a competition to see who can be the most modest, which has never been my style.
I like it too (east coast as well). I just see it as straightforward, though I've also been accused of having an offensive or off-putting tone when I thought I was being straightforward as well.
I don't see it as straightforward. I agree with a lot of what he says, but trash talk of pretty much any kind tends to distract of the issue at hand.
Like in sports or gaming, I always prefer the person who plays silently and speaks with purpose than someone who tends to trash talk while playing. But neither form of etiquette effects who is the better player.
Like in sports or gaming, I always prefer the person who plays silently and speaks with purpose than someone who tends to trash talk while playing. But neither form of etiquette effects who is the better player.
Agreed. I am also an east coaster and I find Dave's style to be a brilliant balance of humor and content. He occassionally rubs me the wrong way, but I'm a big boy. I can take it.
I have a strong belief that any time you are offended, you should look within, not attack the offender.
I have a strong belief that any time you are offended, you should look within, not attack the offender.
I think it's a style. He's not literally being (or trying to be) an asshole. If you substract the style, he writes with substance. Frankly, I'd love to see more written in his style than some of the pompous/formal blowhards I've seen elsewhere on the web. Dave also was a "working stiff" before he got PayPal bank, I believe, which differentiates his perspective and style a bit more from the standard blueblood VC/bankster type.
Dave is a cool guy, and really nice to talk to, but I'll be the first to agree that when he's writing/giving speeches, his style sometimes serves to distract/detract. I remember hearing one of his speeches where it felt like every other word was either "fuck" or "shit". It was highly distracting.
thanks for the feedback. will try not to swear unnecessarily, but it does serve as useful / unintentional emphasis sometimes... guess that's the hillbilly talking.
Oh wow, I'd describe that writing style as "stream of semi-consciousness". I couldn't read all of it.
I would describe his entire writing style as annoying and abrasive which makes it so I can read barely any of it. But I suppose some people like it or the ideas as his writings seem to do well here.
that is my writing style. i was also in a hurry because i needed to get my kid to basketball practice at 10am, and i started at 7am.
usually it takes me about 5-6 hours to include the "full insanity" version with fonts, pictures, etc.
(anyway, i'm obviously an acquired taste... i won't be offended if you think i'm offensive.)
usually it takes me about 5-6 hours to include the "full insanity" version with fonts, pictures, etc.
(anyway, i'm obviously an acquired taste... i won't be offended if you think i'm offensive.)
I've never met you so I can't possibly think you are offensive but I do find your writing style a bit harsh to read, some people obviously like it though.
Why insanity? I guess there's the entertainment value...
Dave makes it pretty clear that though VC's years ago praised the theories of the Wisdom of Crowds, they felt it applied to other industries, and not theirs.
Seems most 'experts' feel that way.
Seems most 'experts' feel that way.
Dave nails the often unspoken truth: traditional VC's have been terrible on average. Suspect the savvy LPs will pour more and more into 500hat-esque vehicles...
Dave is spot on when he says that "value-added" investing comes more and more from domain experts. We have lately had discussion with a few investors. The quality of feedback AND connections from those that have been hands-on entrepreneurs, especially in our field (gaming) is in a totally different level compared to others.
I wonder when this Silicon valley school yard soap opera is finally over.
Just in time for my compilation (bit.ly bundle) of interesting reads in tech controversies: http://bit.ly/openletters
Reading him is like reading James Joyce Finnegans Wake. For those who haven't read the book: http://en.wikipedia.org/wiki/Finnegans_Wake
This blog seems like a parody of western civilization.
I don't like how he points at the negative 10 year VC return numbers as implied proof his strategy is superior. On the other hand I don't know why I'm arguing against someones alter ego.
I didn't get that takeaway. He said if you're losing money, you have no standing to criticize someone else's investment strategy. He seemed perfectly willing to take criticism from Sequoia & Friends who adopt a different strategy from his own, but with the important distinction THAT THEY ARE MAKING MONEY.
I think he's acknowledging that there is still risk in his strategy, but that's it's not as risky as critics like to say.
That's overly charitable of you. Why would he bring up the last 10 years of VC returns unless his argument was, "look how bad traditional investor schools of thought are, anything else that kinda seems to make sense must be as good or better". But that doesn't follow.
The past 10 years returns of VC's investment strategy says nothing about his strategies relative performance.
The past 10 years returns of VC's investment strategy says nothing about his strategies relative performance.
i didn't say "anything else must be as good or better".
what i meant was that blind trust in traditional VC strategy doesn't make any sense, since on average they suck.
my strategy is still new (<12 months old), so there's no historical performance to compare, outside my investing at Founders Fund (which looks pretty good so far) and my own angel investing (which also looks pretty good).
sorry i can't share #'s here on those, but as a personal investor i was in early on Mint, SlideShare, Simply Hired, & Mashery. as a professional investor at Founders Fund i was in early on Twilio, CrowdFlower, CreditKarma, Bitly, and several others which are doing pretty well.
still, it's too early to say whether i'm any good or not.
my point was simply that arguing status quo doesn't make sense when status quo is sucking pretty hard.
what i meant was that blind trust in traditional VC strategy doesn't make any sense, since on average they suck.
my strategy is still new (<12 months old), so there's no historical performance to compare, outside my investing at Founders Fund (which looks pretty good so far) and my own angel investing (which also looks pretty good).
sorry i can't share #'s here on those, but as a personal investor i was in early on Mint, SlideShare, Simply Hired, & Mashery. as a professional investor at Founders Fund i was in early on Twilio, CrowdFlower, CreditKarma, Bitly, and several others which are doing pretty well.
still, it's too early to say whether i'm any good or not.
my point was simply that arguing status quo doesn't make sense when status quo is sucking pretty hard.
Look, I like your investment strategy and want to see how it plays out.
That said, your post does imply that the weak returns of the VCs last decade lend your approach merit when you point out their weak returns and then say:
"to be more specific: if we look at the #'s, on average it's more likely that high-volume, spray & pray investing -- which i will going forward refer to as "a quantitative investment strategy" -- is likely to be successful than a "focused, low-volume" investing strategy."
(Of course I assume you measure success by expected value, not the chance of being in the black after a small number of investments)
That said, your post does imply that the weak returns of the VCs last decade lend your approach merit when you point out their weak returns and then say:
"to be more specific: if we look at the #'s, on average it's more likely that high-volume, spray & pray investing -- which i will going forward refer to as "a quantitative investment strategy" -- is likely to be successful than a "focused, low-volume" investing strategy."
(Of course I assume you measure success by expected value, not the chance of being in the black after a small number of investments)
yeah, guess i'm intentionally taking on the "spray & pray" haters, but to me more specific -- i'm combining that strategy with other filters, domain-specific expertise, selective follow-on investment. the combination of all of these is more like an index fund for initial selection, then active management and time-weighted averaging of future funds into the winners.
little bit complex to describe, adn we're still developing it so even i'm not final on which parts add most value.
but we are trying some new shit. some of it hopefully works ;)
little bit complex to describe, adn we're still developing it so even i'm not final on which parts add most value.
but we are trying some new shit. some of it hopefully works ;)
One has to believe that with the variety of startups coming out that seed-level spray and pray, coupled with selective follow-on will likely get you in on big things.
Worst case, you have an existing relationship with a large number of startups, a percentage of which will undoubtedly go on to bigger things or exits -- the trick is of course in how big that percentage is.
This is evidenced somewhat by the increasingly large number of teams getting accepted by YC.
Worst case, you have an existing relationship with a large number of startups, a percentage of which will undoubtedly go on to bigger things or exits -- the trick is of course in how big that percentage is.
This is evidenced somewhat by the increasingly large number of teams getting accepted by YC.
I appreciate the entertainment, investing would have been so boring.
"Angel List is like Dangerous Sex with Super Models for Virgin Nerds.
yeah that's it -- imagine if you're Urkel and all of a sudden you get to find out who the newest Sports Illustrated hotties are, who they're screwing, and then SOMEHOW you discover an opportunity to SCREW THEM YOURSELF TOO! (omg, where do i sign?!?) ok, so you get the picture. this is probably why Bryce left the party."
"Angel List is like Dangerous Sex with Super Models for Virgin Nerds.
yeah that's it -- imagine if you're Urkel and all of a sudden you get to find out who the newest Sports Illustrated hotties are, who they're screwing, and then SOMEHOW you discover an opportunity to SCREW THEM YOURSELF TOO! (omg, where do i sign?!?) ok, so you get the picture. this is probably why Bryce left the party."
The above quote is direct from the blog post. Not my words.
Edit: I guess there is also the possibility that my company will not be the next Facebook nor does it even aspire to be and because of that, I guess it might not be interesting to investors.