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Raising Money On AngelList: 21 Tips From Two Active Angels

Raising Money On AngelList: 21 Tips From Two Active Angels
The following is the result of a collaboration between Ty Danco and Dharmesh Shah. Ty is an angel investor and startup mentor (you should be reading his blog). Dharmesh is founder and CTO of HubSpot, runs OnStartups.com and is an advisor to AngelList. [Note: All the smart useful stuff in the article is Ty, all the feeble attempts at humor are Dharmesh] AngelList (AL) connects promising startups to a sterling network of early stage investors. AL has been getting a blizzard of well-deserved press of late after Venture Hacks released the networks 18 month statistics. 1. AngelList may be a game-changer, but most of the same rules are still in place. 2. "How to Hustle with AngelList", by Brendan Baker is the definitive how-to guide discussing how to make it onto AngelList, how to set up profiles, etc. 3. With over 400 companies having raised money on AngelList in its first 18 months, this is easy. 4. The first anchor investor is the hardest. 5. Whens the best time? 6. 7. 8. 9. 10. 11. 12. Related:  Funding

Startups: How to Hustle with AngelLis... by Brendan Baker How We Raised $1.3 Million As First-Time Founders When Jim and I quit our finance jobs to start the next big thing, we were really unprepared for our startup journey. We didn’t have startup experience, we had no real domain expertise (our startup wasn’t going to be about finance), and we didn’t know any investors in the tech community. There was very little reason for them to want to invest in our startup. Exactly three years later, we raised $1.3 million for Yipit, a daily deals aggregator, from Ron Conway and David Lee’s SV Angel, RRE, DFJ Gotham, IA Ventures, and a handful of other amazing tech investors. This post isn’t about the tactics we used once we started getting interest — I’ll share that with you later and you should check out VentureHacks. Note: We didn’t think of raising money as a goal. Below are the the key moments in our journey: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Getting Traction was HUGE As you can see, getting traction was huge for us.

Burn Rates: How Much? In the comments to last week's Burn Rate post, I was asked to share some burn rates from our portfolio. I can't do that. But an alternative suggestion was to write a post suggesting some reasonable burn rates at different stages. I can do that and so that's the topic of today's post. The following applies to software based businesses, and most particularly web and mobile software businesses. Building Product Stage – I would strongly recommend keeping the monthly burn below $50k per month at this stage. Building Usage Stage – I would recommend keeping the monthly burn below $100k per month at this stage. Building The Business Stage – This is when you've determined that your product market fit has been obtained and you now want to build a business around the product or service. A good rule of thumb is multiply the number of people on the team by $10k to get the monthly burn. Once you get the business profitable, you can scale the team larger and larger to meet the needs of the business.

Deconstructing AngelList: How to Optimize Your Funding Profile | Daniel R. Odio - Entrepreneur & LifeHacker in Silicon Valley AngelList is a platform that connects entrepreneurs to angel investors to raise seed stage capital. Out of the $1.5 million dollars in angel funding we've raised for Socialize, over $1 million came from introductions made on AngelList. We were very early AngelList users under our AppMakr brand, with Brendan Baker doing a detailed analysis of our use of AngelList in his Anatomy of a Seed project. Recently, using AngelList has changed the way I've been fundraising. As I was talking to my friend Ben Young, CEO of Nexercise, about this sea-change in fundraising, I offered to critique his AngelList page to help him optimize it for this type of inbound passive investment. You can find the Nexercise AngelList profile here, and compare it to my Socialize AngelList profile here. First, some background on AngelList: If you're an entrepreneur and you haven't yet made a profile on AngelList, you need to do that right away. The Basics: The basics in AngelList are pretty straight forward.

Thoughts How to Pitch to Angel Investors Mission accomplished. You have found what seems like an ideal match. You are ready for that first meeting with an angel investor where you get to present your business concept. "You won't get past first base if you can't address four areas," says Mike Levinson, managing partner and co-founder of DreamIt Ventures, a Philadelphia-based accelerator program for start-ups. In essence you're selling your vision and your team. "A lot of entrepreneurs object to paying fees to present to private investors. Which pitching tools do you need? "My whole focus is on trying to size up the entrepreneur," says private investor and real estate mogul Barbara Corcoran. How to Pitch to Angel Investors: Focus on the Money What's the No. 1 mistake entrepreneurs make during the pitch? Dig Deeper: How to Evaluate Your Company's Financial Position How to Pitch to Angel Investors: Gauge Your Body Language People physically judge your acumen based on how you look. Dig Deeper: What Is YOUR Personal Brand?

How to nail the five-minute pitch Editor’s note: Chuck Dietrich is chief executive of online presentation startup SlideRocket. Startup CEOs wear many hats. None, perhaps, is more important than that of “company pitchman.” In today’s competitive funding climate, CEOs often present at events like Under the Radar, South by Southwest, and DEMO –- where they have five minutes on stage to ‘sell’ their company to potential investors, partners, and customers. Getting these presentations right leads to financing, buzz and growth; getting them wrong doesn’t. In my role as CEO of SlideRocket, I view hundreds of presentations a week and thousands over the course of the year. So how do you make a great startup presentation? 1. Critical questions to answer during your presentation include: What is the company vision? 2. 3. The Basic Pitch Outline Following is a sample outline that I have seen many successful startup presentations follow. At pitch events, you have just five minutes to stand out from the other presenting companies.

Behind the Scenes: How Fab Raised $40 million with a lot of data and not much pain Let’s face it, fundraising can be a real pain in the ass for the entrepreneur. It takes up a ton of time that can be otherwise spent managing the business. Sure, it’s a necessary evil, but it’s also typically a big distraction. It’s also a lot like dating. When we decided to raise a large round of financing for Fab in October, my biggest concern was that it would divert our management team’s time and attention away from running the business at a critical time, as we were simultaneously scrambling to prepare for our first holiday season at Fab. As our “one thing” at Fab.com is design, I put a lot of thought and consideration into how we might design our fundraising process differently from the norm, so as to optimize around time spent fundraising vs. running the business, and to quickly hone in on who we wanted to marry. The typical VC dog and pony show goes like this: VC’s approach company or Company approaches VC’s. Here’s what we did differently with Fab’s recent round. One final note.

Fundraising Hacks: Interview with Naval Ravikant of AngelList | Daniel R. Odio - Entrepreneur & LifeHacker in Silicon Valley This is the first of a multi-part blog post I'll be writing over the next week that will chronicle my experience raising a $1MM round for AppMakr. I'll be sharing my learning and experiences as a first-time fundraiser out here in the Valley. My goal is to provide pragmatic tips to help other entrepreneurs understand the process and short-cut the time fundraising typically takes. Think of it as download that condenses 4 months of learning into a series of blogs you can read in an hour. Be sure to subscribe to the blog if you'd like to get those future posts. Also, we're throwing a party to thank the investors who made this round possible, and celebrating the fact that over 1,000,000 people have now used apps made through AppMakr. For this first post, I scored an interview with Naval Ravikant, one of the co-founders of VentureHacks, which runs AngelList. Here's the video with Naval: Here's a transcript of the video: (learn how & why I do this) Naval- That's right. Naval- Thanks. Daniel- Wow.

A Primer on Equity Dilution - Dilution - Equity Financing When the founders of a company bring in new equity money, they are typically concerned that they may be giving away the store -- reducing their percentage ownership by too large an amount. The culprit is typically something called "dilution." The concept of dilution is a major factor to consider in deciding upon a financing strategy. By definition, bringing in an equity investor means that that the new party will be taking part ownership of the company. So where does the newcomer's ownership interest come from? Very often, it comes out of the prior owners' chunk of the pie, meaning that the percentage ownership of each of the prior owners decreases on a pro rata basis. Hopefully the newcomer's contribution will make the pie bigger, so that the value of the prior owner's adjusted percentage ownership is worth as much or more than the original larger percentage. (New Shares Issued) = (Original Total Shares) x (Newcomer's Interest)/ (1- Newcomer's Interest)

Does Your Startup Have a Good Story? Never underestimate the importance of having a good story when pitching your startup to potential investors, clients, partners, and journalists. As Seth Godin writes in his 2005 bestseller All Marketers Are Liars, "Either you're going to tell stories that spread or you're going to become irrelevant." Godin's book addresses a shift in marketing - away from simply presenting factual information and towards telling great stories. As Godin suggests, these stories make us want to believe - in a product, in an idea, in a company. As you craft a story for your startup - whether it's to be used in marketing, in a pitch to investors, or in conversation with friends and family - here are some things to keep in mind. Your story should be short. Your story should be easy to tell. Your story should be memorable. Your story should make an argument. Your story should be strategic. Your story should be relevant. How to Tell a Good Story You startup should have a good story.

» Guide pour présenter votre Business Plan de Startup  (Ce post sera mis à jour en fonction des retours de mes lecteurs, n’hésitez pas à en laisser en commentaire) Depuis le lancement de Kima Ventures avec Xavier Niel en février 2010, nous avons reçu via notre site plusieurs milliers de business plans en provenance du monde entier. La grande majorité des business plans sont reçus via notre site internet, lui-même relié à notre base de données de startups. Nous avons investi dans plus de 130 startups (une partie apparait sur notre site) dans 18 pays, de la Chine au Nicaragua en passant par le Pakistan, Israël, la Norvége ou la Suisse. Lire des business plans peut être une activité agréable mais, pour que cela soit vrai, il faut que celui-ci réponde clairement aux questions que se pose un investisseur sans développer de détails inutiles. Pas la peine donc de présenter l’évolution de la taille du marché du e-commerce au cours des 10 dernières années quand vous présentez un dossier de vente de pin’s sur Internet Parlons donc contenu désormais.

Interview: Naval Ravikant, Co-Founder AngelList and Co-Maintainer Venture Hacks Messenger: Naval Ravikant, Co-Founder AngelList and Co-Maintainer Venture Hacks. Former Founder Epinions. Investor in Twitter, Foursquare, DISQUS, and (by Naval’s own admission) “a lot of other companies you have never heard of” Dharmesh Shah, Founder of HubSpot and of OnStartups, recently published a great post entitled, Raising Money On AngelList, which offers insights germane to my conversation with Naval. I recommend you first review Dharmesh’s article and then listen to Naval’s thoughts. You can watch my interview with Naval below or on YouTube here: What follows is a summary which paraphrases Naval’s responses. Value Prop Twitter Style: AngelList is the productization of raising startup funding. If you haven't already subscribed yet, subscribe now for free weekly Infochachkie articles! 6) Naval, why does the startup world need AngelList and Venture Hacks? “As of the last the 9 to 12-months, AngelList is actually my fulltime endeavor. Share and Enjoy

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