
What’s The Real Deal With AngelList? - ssclafani
http://techcrunch.com/2011/02/26/angelist/
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brianstorms
My discomfort with AngelList stems from what I see as a disproportionate
advantage on the buyer side (the investors), with less advantage going to the
seller side (the startups).

For investors, AL is a firehose of Shiny. If you're a Shiny junkie, then
connecting the IV tube of AL into your veins will keep you wired into dealflow
like nothing before. Instant gratification, severe acceleration.

For startups, you hear the occasional startup praising AL with stories like
"we posted our profile and 3 days later we have $600K woo-hoo!" but my
question is, until I see AL post detailed stats and analytics, I assume that
for every success story there are dozens, scores, or even hundreds of stories
where basically nothing happened.

I would gladly be proven wrong: Nivi, Naval?

Lastly, I get the brilliance of AL, I get that it works because there are tons
of investors signing up, but it's the scale that worries me. As it scales, the
win rate for entrepreneurs will just get worse. Has to.

A similar thing exists in the publishing world with literary agents and
editors. (Heck, there, writers (the entrepreneurs in this analogy) have to go
through TWO hoops not just one, to get an advance (investment)). There are too
many writers and not enough agents and even less publishers, it's a very very
tight funnel and rejection is the norm.

AL will probably wind up this way too, unless AL thinks of ways to improve the
service to better balance the features, acountability, and responsiveness of
each party. I want to see investors being forced to respond to investors
who've submitted their pitch to them specifically, within a set amount of
time, or lose reputation points. AL should facilitate rapid communication
between both parties, but it seems that all AL does now is email investors
when entrepreneurs submit companies to specific investors, and at that point
AL's job is done and the ball is in the investor's court. Not enough. AL
should be all over the investor and help the entrepreneur get closure as soon
as possible with each investor they submit to -- even if the answer is no. Any
answer is better than silence.

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asanwal
If the angels on AngelList are happy with 5-10% returns (per Jason Calacanis)
and those are the types of companies they're funding and finding on AngelList,
doesn't it make sense that VCs would "opt out" of this market given 5-10% is
not what they/their LPs are after?

After all the drama and histrionics, it seems that the 2 investor groups may
just have different returns expectations. Nothing wrong with that.

~~~
salemh
VC List pivot / new startup modeling Angel List?

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jdp23
"My biggest fear is that people confuse the “social proof” of other prominent
investors on AngelList for real insight. Indeed, in a bubble people generally
chase what other people are chasing leading to group think."

Indeed.

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trevelyan
You'd think reading the piece that there had never been groupthink behind
funding decisions before.

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Wrkonce88
As a new found "tech geek" the "angelInvestor" world can be quite discouraging
and complicated. I was never one for formal education and always taught
myself, however there are certain areas where information is limited one being
this. So I believe this site offers a great connectivity tool to at least
allow you to introduce and connect with key people.

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fleitz
Have to agree on this one. My startup is in the same space, we're taking a
totally different approach. The focus is on creating a compelling presentation
/ pitch. When you use the product it feels like your interacting with the
company.

We're pretty much iPad exclusive as we think the best way to approach the
space is to put pitching tools in the hands of the entrepreneur. The idea is
that investors and entrepreneurs will share the presentation physically by
passing the iPad around. We also have tools to gather information on the spot,
if the person wants to look it over later, take their email in the app and it
emails them a link to the presentation. Which they can review later.

Use Cases:

In person amongst friends: Check out this startup, and then pass the iPad to
the person. We see this use case more for someone who has been presented to in
person and is sharing with others who may also be interested.

Elevator Pitch: If you get the opportunity for an elevator pitch and generate
interest you can pass them a compelling presentation. The buttons are also
oversized so that while you're presenting you can still guide the presentation
while it's held in the other person's hand.

Multiple People: With your iPad in hand you'll always be prepared to present,
if you find yourself in a board room, or anywhere with a TV simply plug the
VGA/TV connector in and display the presentation on the big screen.

The exit / next round: It's easy for investors to take their portfolio
companies presentation and add them to their home screen, that way when they
are looking for prospective buyers for the next round / exit they have those
great presentations on hand and can easily walk the buyer through.

We'll eventually support recording a presentation so that the app flips
through the various parts of the presentation automatically while playing your
recorded audio as the app transitions through the pitch.

We have no social media integration other than to login/share with friends, we
don't think it's a good idea to encourage a herd mentality and that
prospective investors should make up their own mind, rather than relying on
the herd for signals. I think over the long term it will build a better
understanding between investor and entrepreneur. Rather than investing based
on what is in vogue.

We focus on creating a compelling story for the entrepreneur by being rich in
imagery, video, and eventually audio. We're helping entrepreneurs create a
connection and generate real interest in what sets their company apart from
the herd.

Once we have the presentation down and have that working flawlessly we'll move
to social media.

~~~
asanwal
Interesting idea, but all use cases above suggest you have to be there in-
person to "pass the iPad". Seems like that requirement creates extra friction
in the process.

~~~
fleitz
You can definitely send a presentation to someone else, there are
email/linkedin share features.

Your home page will display all publicly available presentations, but we see
an essential chicken-and-egg problem that is solved by positioning first as a
presentation tool. Thats the immediate value, it helps an entrepreneur present
to the people you already know, as well as collect information for prospective
investors.

eg. hallway / booth conversations at a tradeshow, quickly walk through a hand
held presentation that is tactile and interactive, if they're interested, take
their email down, send them a copy of the presentation and have the email on
hand for follow up. You can also use it to pitch your product, rather than
providing information about the company.

Once the network of entrepreneurs is in place we can start attracting
investors via internet means. Once both are in place we'll evaluate the next
steps. What we don't want is prospective investors going to an empty site.

