So You’re Looking for Investors: The Why and How of AngelList

According to credible sources like Forbes, Mashable and TechCrunch, if you’re an entrepreneur or if you’re an angel investor and you haven’t heard of AngelList, it’s time to get a clue. It seems that AngelList has single handedly dragged the back-room world of venture capital screaming into the light since its 2010 launch.
 
At first, people wanted to dismiss the potential, saying that only loser companies would want to share data and broadcast fundraising plans so publicly. Then, some Venture Capitalists said they’d never invest in an opportunity that didn’t come through traditional channels. Other VCs swore they’d have exploratory dialogs privately or not at all. They’d never do something as prosaic as leaving comments on a company’s profile.
 
But AngelList trounced those objections and found traction in 2011, with 500 start-ups and 2,500 investors who joined the community, resulting in a total of 12,500 introductions and subsequent fundings.  Trounced and then did the Happy Dance!
 
In fact, AngelList has proven to be a remarkably effective way for investors to connect with entrepreneurs. The hybrid social-network platform offers a greater degree of visibility to start-ups that might not otherwise have access to investors, and, on the flip side, has become an important resource for investors looking to boost deal flow and as well as connect with other investors.
 
After an afternoon of limiting my research to information published this year in order to stay current with upgrades to the platform, the definitive guide is Brendan Baker’s "How to Hustle with AngelList," updated this past April, 2012. This is a great article since in addition to the basics, it covers how to make it on to AngelList, how to set up profiles, and some proven tactics. If you have time to read only one article on AngelList, this is the one.
 
Two other essential articles are Raising Money On AngelList: 21 Tips From Two Active Angels by Dharmesh Shah of Hubspot creator fame and an article by a prolific angel investor, Joshua Bauer, co-founder of Otherinbox, entitled 9 Tips for Raising Startup Funds on AngelList. 
 
This brings us to my laundry list of articles on different aspects of AngelList. 

• If you’re wondering which influential angel investors to target here’s a Forbes Article from May of this year on The Most Influential Angel Investors On AngelList

• Does your pitch deck measure up? There is an explanation and links to winning a pitch deck in this article: “AngelList Takes A Shot At Standardizing The Startup Pitch Deck”

• AngelList is unique because it attempts to level the playing field for start-ups. How to use AngelList to Raise Money has the start-up perspective.

• Raise your spirits with a success story. It’s not every day that you get 200 emails in one hour offering you money:  “Take That Crowdfunding Cynics! Rally Raises Largest AngelList Deal Ever”

• Want to know more about the vetting process for AngelList? Check out the video in this article, AngelList Heats up as Angel Investing Sizzles (note date is February 2011)

• Ongoing good advice for start-ups on these sites on OnStartups, Venture Hacks, AVC, Ask the VC, Both Sides of the Table

What I took away from doing this online secondary research, aside from being entertained on a rainy afternoon, was that AngelList has really brought another avenue to the way entrepreneurs can seek out funding. It can cut down on the amount of prospecting involved in raising funds and it’s an immediate confidence booster when potential investors see other prominent Angels/VCs investing in your company.  AngelList takes the limited time an entrepreneur already has and optimizes it to seek out funding, and it’s a great digital tool that VCs use to scan through potential companies quickly. 
 
Bottom line: It connects VCs and Angels and is an important method for showcasing your start-up company to investors. Also remember that my point of view is based on what I’ve read. I’m not an investor or launching a start-up (at least not yet). But if you are, share your perspective as the rest of us would love to know what you think.