Any experience with AngelList as startup?


23

AngelList sends almost hourly Tweets about Angels joining in, however I never heard anything about start-ups. Has anyone given it a shot or thought?

How long does the application process takes? What happens next?

What does it even mean "application process"? You are not really applying for a loan, right?

Any idea of the proportion of angels/VCs to startups? What's the activity rate? I saw a post that a few startups got funded? What's that portion of all "submissions"?

Is it really beneficial to startups or is it just a "who's who" capitalist showcase?

Just curious.

Thanks.

Angel Angellist

asked Nov 17 '10 at 04:33
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Usabilitest
1,698 points

8 Answers


16

AngelList is rapidly becoming the hub of a huge amount of angel activity.

My understanding is that it's very simple:

  1. entrepreneurs post descriptions of their business idea
  2. the full feed of business ideas is read by a small team, who pick out the best ones
  3. angel investors can subscribe to either the filtered feed of the best ideas, or the whole feed
  4. if an angel sees anything they like coming through, they contact the startup directly and decide whether or not to invest using whatever criterion they normally use. Every investor will have their own process.

From what people tell me, this has massively democratized the process of getting angel funding, especially for relatively unknown entrepreneurs who don't have a good Silicon Valley network yet. I've also heard that it has led to something of an "angel investment bubble" because it's so much easier for angels to get access to deals that more of them are competing.

answered Nov 19 '10 at 14:04
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Joel Spolsky
13,472 points

10

Slatecaster, LAV, our apologies for not getting back in touch with you.

When we first started out, we used to screen all of the pitches and decide which ones went to the investors and which ones didn't. Back then, it made sense to "accept" or "reject" applications.

However, since then, we've moved to a crowdsourcing model. When you submit your pitch, you choose who it's visible to, and based on that, it automatically shows up in the angels' feeds on the website. If it gets intros and votes via the feed, then we also email it out to the angels, which results in more intros. So, because the pitch is always visible and active, it doesn't really make sense for us to "accept / reject" anything anymore.

That being said, we do need to do a better job communicating. We are going to open up the site more that you can see what the angels are doing and how the site works. We will, however, anonymize all of the startup information for their protection. Also, we are going to let startups know if they haven't been chosen for the more active email channel.

In the meantime, every time your pitch is updated, we do get notified and take a look. If there are any questions or issues, just email us directly. Brendan is at the front lines, and I'm right there behind him. You can reach us at firstname-at-angel-dot-co.

Thanks for your patience,

Naval

answered Nov 28 '10 at 05:15
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Naval
219 points
  • Thanks Naval. The new model certainly makes more sense. I appreciate you offering deeper insight into what's going on. Judging by votes and the number of visits to this post, it did capture a great deal of attention. Since AngelList does have access to email of each submitted pitch, perhaps an mail blast with similar explanation could help to clear up any possible anxiety and confusion on the part of start-ups. – Usabilitest 8 years ago

6

I submitted a pitch almost 4 weeks ago, never heard anything back. Wonder if they even review the pitches submitted. There is no way to know if the pitch has been reviewed , rejected , approved to be circulated within angel list..

Still waiting ...

answered Nov 20 '10 at 15:01
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Lav
87 points
  • Yes, I'm afraid you're not alone. I've see a few frustrated posts on this topic. In fact I got in touch with couple of people running the site and brought this issue to their attention. Any status is better than none. – Usabilitest 8 years ago
  • You know, they invest in small amount of startups. So there is a small probability that someone will get back to you. – Vladimir Prudnikov 8 years ago
  • @vladimir - right, but that small number is multiplied by the number of angels on the list. Are those people really active and taking deals, or are they there just to drop names? – Tim J 8 years ago
  • I mean small amount of startups get investments in general. May be 10-20%? Or less? – Vladimir Prudnikov 8 years ago

6

Disclosure: I'm an investor in the company that runs AngelList.

I'm also an angel investor that's on the list. I review every deal that is approved and gets shared with the list. I've made 3 investments in companies that came through the list.

answered Nov 26 '10 at 16:20
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Dharmesh Shah
2,860 points
  • Thanks Dharmesh. Not sure if Angels go through the same routine, but upon start-up registration AngelList displays the following message: "If we accept your pitch, we'll get in touch with you to get a full list of angels you want to contact. We'll also let you know if we don't accept your pitch". However, after weeks go by and neither status is updated nor anyone gets in touch with the applicants, some people starts to get frustrated. Also, there's really no way provided on the website to get in touch with the owners of the service. – Usabilitest 8 years ago
  • I'll follow-up with the AngelList folks and share this experience. I agree it's sub-optimal. – Dharmesh Shah 8 years ago

2

I know Tim has done an excellent job of deciphering AngelList and pointed out some of the problems. However I would like to add my own experience with AngelList.

Although Nivi’s comment regarding the lack of feedback and a promise to fix it is almost 6 months old, no such “fix” has been implemented. Basically if you create a profile you will only hear back if they are interested.

AngelList says “Please keep updating your profile as you make progress and we will keep reviewing it.” But after weeks of constant tweaking of my profile I have yet to see anyone other than myself look at the profile. Sure I could have the worst idea in mankind but still no one will know unless they take a look.

I think there are some major problems with AngelList.

The first problem is that it is made for the investors and not the startups. The key to getting the “in-crowd” of investors on board is to have the right names to drop and enough startups to attract those investors. As long as you have some good startups in between the rest nothing else really matters. Like the startups are taunted with high number of “high profile investors” those same investors are probably taunted with “more than X quality startups”.

Another problem for startups using AngelList is that getting funding is still rare even when using the site. Getting exposed to 2000+ potential investors might help a little. However when someone (http://www.slideshare.net/brendanbaker/anatomy-of-seed-7753824) state that it is responsible for more intros than traditional funding it is a bit of a stretch (Please note that the only way the statements in the included link could be true was if AppMakr didn’t have any prior investors/advisors/endorsers)

After using AngelList for weeks and studied the activities on there I have come to the conclusion that it is useful for couple of things.

1) Obviously a couple of startups did get funded there so it works right? Well yes if you get the sun, moon and all the stars to align. See the only scenario that will get you funded is if you already have investors that are well known. Those same investors could have helped you the traditional way to get additional funding but by using this social site they get to their investor friends a little “cooler”. Basically those startups would have gotten funded anyway.

2) If you are an investor in a startup you might use AngelList as a way showing off. A “look at what I did” scenario. This is very likely as some of the startups on the site have little to no merit e.g. poor idea in a niche market, but still manage to have a bunch of “followers” and views.

I really hope that AngelList eventually turns into what we all could use – A site where startup and investors meet – but if not hopefully someone else will open such a site.

answered May 10 '11 at 10:42
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Snow
61 points
  • Yes, it seems it was a bit of a flash, and the net result is that nothing much has changed in the angel world. Those involved seem very pleased with it and with themselves - I am happy for them - but hardly worth spending time on that site. – Tim J 8 years ago

2

The initial email I received makes it look like it is an engine to get people interested in buying something - though that hardly seems like the real purpose of Angel List. I got an email after I submitted that shared a link and had a buy now link on it is well and some admonition about not sharing any of the stuff that they were sending. (A pretty useless spreadsheet/cap table) that they made sound incredibly important to have. (The people running AL should take a hard look at the copy they put into that email and fix it - it seems a bit scammy)

"Here's a link to something that you
get for free but don't share it with
anyone because we usually charge for
it."

Then on that page for the download is a "pay now button or something similar.

I am not impressed so far.

I looked at the links Nivi provided. Based on the quotes from the parties involved I have some observations -

All this really means is that, as with many things, the "market" is not efficient. far from it. If these "high quality" investors and "high quality" startups both sing such high praises it really only means that there is room in this match-making for better matching.

One wonders what all these folks were doing previously. It was sheer dumb luck that brought the parties together, that and I guess a lot of persistence on the side of the entrepreneurs. (A test of will, perhaps by the money side?)

There is a lot more room for improvement in this area. Perhaps Angel list really is the cat's meow, but perhaps it is also going to just keep the relationships incestuous and close-knit.

Joel talks about "democratizing" - but access to Angles is very much a non-democratic thing. Angel List is basically about "selling" a scarce resource - the attention of "desirable" angel investors - even if for a few minutes. there is nothing democratic about that - many of these folks have process or other barriers put into place to keep away the riff-raff. With good reason.

I don't know what the solution is. Good luck to all the parties - the site founders, the investors and the angels. Hopefully the market will converge into something a lot more efficient, but given the nature of the market I am skeptical.

answered Nov 28 '10 at 10:26
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Tim J
8,346 points

1

Joel nailed the description of AngelList. I've also updated the description of how the site works here http://angel.co/intro.

And there are more reviews of AngelList here:

http://twitter.com/angellist/favorites http://www.quora.com/AngelList/What-do-people-think-of-AngelList Slatecaster, LAV: We review every single pitch, usually within 24 hours. But we need to do a better job of communicating with the startups that aren't ready to get funded by the AngelList community. We're working on that right now. Stay tuned. Thanks for the feedback, it's very helpful.

answered Nov 28 '10 at 06:08
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Nivi
157 points
  • Thanks Nivi. I followed the link to Quora that you provided here and came across the following post: "There have been numerous cases of companies successfully raising through AngelList, although it is unclear how many startups pass Nivi and Naval's first screen and get sent out to the whole list." Are the startups that do not make the cut notified about their status? If yes, within what time frame? Thanks. – Usabilitest 8 years ago
  • Hi Nivi, it's been a while since this reply, and I was wondering if there's an answer to @usabilitest's question. Also, the description of how the site works is no longer present at http://angel.co/introDan Dascalescu 7 years ago

1

Some more useful comments and questions aside from my previous "rant".

  • Are the angels listed actually taking deals through Angel List or are they there for show/name dropping? I would imagine that the organizers either charge some nominal amount or cull the Angels if there is no activity/investment. While it gives everyone a warm, fuzzy feeling to see high profile names it is also a bit misleading if those people are just there as eye-candy.
I realize this is not so easy - as it is hard define what "active" means and the next deal they might invest in is "just around the corner" but again, as an entrepreneur it would be nice to know if I am wasting my time or have better information so I can prioritize the venues and activities I pursue. (I am sure I am not alone in this)

  • The "number of views" counter is nice to have
  • You (the AngelList folks) mention "Over 100 startups have raised money from the community of investors on AngelList". It would be nice to know how many "applications" there are - it would give people an idea of the odds of funding. Expectations would be set correctly with that tiny additional bit of information. Also, please indicate how many of the total number are "recommended" via your screeners. Again, this would provide the transparency for entrepreneurs to decide whether it is worth the effort to join the program or whether to spend time on more productive activities.

Thanks for providing the site. It certainly can't hurt the current state of affairs.

My "problem" with the investing bit really stems from the amount of energy and time it takes - and distracts from actually running a business. The opportunity cost is huge.

I would skip the parts about "kicking ass" and "kicking its ass". Maybe once for effect is ok, but repeated use of the phrase "kick ass" is just a bit juvenile, especially on the same page that admonishes people to write effectively.

Again, the "Use Chrome dude. Use Chrome" content on the AngelList site is juvenile and indicates to me that this AngelList is more of an insider's list and a popularity contest rather than a real venture. (I use firefox - and while it may not be a hip or cool as chrome it works just fine for me.) Perhaps I am wrong, but it appears condescending, puerile and unimportant. (really, you want to take up prime space on your front page with an admonition to change browsers?)

answered Nov 28 '10 at 11:26
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Tim J
8,346 points
  • Thanks Tim. I love your analysis and the insight stemming out of it. You were able to convey some of the points that I failed to express clearly in my original post. – Usabilitest 8 years ago

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