AngelList Posts

Today, we’re announcing that Divvyshot is the third company to raise money with AngelList. And the first AngelList-funded startup to be acquired — by Facebook no less. The AngelList investor is:

Richard Chen (Investor in Aardvark)

And Divvyshot was referred to us by an AngelList power broker:

Jamie Quint (Founder of Simple Condo)

Divvyshot also raised money from Y Combinator (in a previous round), Jim Young and Gabor Cselle. That’s a great list of investors. Soon after raising this round, Divvyshot was acquired by Facebook.

Update: Jolie O’Dell picks up this story for Mashable.

New angels on AngelList

Some of the awesome new angels on AngelList:

Mitch Kapor (Investor in Posterous)
Ram Shriram (Investor in Google)
Mike Maples (Investor in Twitter)

You can track the day-to-day minutiae of these angel’s lives with the AngelList Twitter list. 2 years ago, you would have had a tough time convincing me that the best angel investors in the world would be publishing hourly updates about their lives via txt message. But here you go:

Startups: Get intros to AngelList here. Angels: Join AngelList here. Everyone: Get AngelList updates with Twitter or RSS.

AngelList reviews from entrepreneurs in the trenches:

Tony Wright, Founder of RescueTime (and AngelList power broker) says:

“AngelList is the real deal. I’ve heard quite a few people having some success there. Even as a YC company, there is a startling hole after Demo Day… It can take months to close a round (it took us 5ish), even loaded down with Demo Day biz cards and meeting invites. If I were doing YC again today, I’d try to get on AngelList right after Demo Day…”

Paul Stamatiou, Founder of Skribit says:

“Nothing but great things to say about AngelList. I applied with my startup and while we weren’t selected for that week, Nivi sent me a nice personalized email and has been super friendly and always open to chat about startups.”

Dave Lifson, Founder of Postling says:

“So we pivoted (explained in the GigaOm post, but I’ll say more soon), and sent the new direction to AngelList. And this is where the craziness started.

“My first phone call was with Tom McInerney, 3 hours before I was flying out to SXSW. After about a 30 minute phone call, Tom was in. He then introduced me to his friend Paige Craig, who would also be at SXSW. I met Paige in Austin, and after meeting, he told me he was in. The next day, at a Venturehacks meetup at the Four Seasons hotel, he pulled over Dave McClure. We went out to the balcony (he wanted a cigarette) and I pitched him. He was in. The following day, I spoke with Thomas Korte, who moved up our scheduled phone call a couple days once he heard Dave was investing, and he was in. I also got an email introduction via my friend Russ (founder of SeatGeek) about his investor Kal Vepuri, who was also at SXSW. Kal and I spoke on the balcony of the Austin Convention Center, and I was blown away by his intelligence and humility. So Kal was in. Finally, my friend Michael Galpert of Aviary connected me with Gary Vaynerchuk, who is a perfect investor for us given what he is passionate about (social media for businesses). David Cohen finished off our round not too long after that.

“So that’s it. Through a combination of a great team (Chris & Haim founded Etsy), customer development, responding to feedback, AngelList, networking, and being able to articulate a compelling vision backed by domain expertise, I was able to raise $200k in the 6 days of SXSW!”

Startups: Apply to AngelList. Angels: Join AngelList. Everyone: Get AngelList updates with Twitter or RSS.

Sean Ellis taught me that startups need to be as creative and thoughtful about their marketing as they are about their products. But we’ve never applied that thinking to Venture Hacks. We focused on writing stuff that doesn’t suck, didn’t engage in marketing histrionics, and figured the customers would come. More important, we simply weren’t excited about marketing.

But! Since we started AngelList, we’ve suddenly gotten excited about marketing — who knows why. And so, on to the histrionics…

Interview: How to close an angel round

Naval and I have recorded one of our best interviews yet: how to close an angel round. But there’s only one way to get it: apply to AngelList. And if you don’t want to apply AngelList, apply anyway, tell us why you don’t want any intros, and we’ll still send you the interview.

Here’s a 10-minute teaser of the full 40-minute interview:

SlideShare: How to close an angel round – Teaser
Video: Interview with chapters (for iPod, iPhone, iTunes)
Audio: Interview without chapters (MP3, works anywhere)
Transcript: Below

¡Get the full interview by applying to AngelList!


Here’s the outline of the full 40-minute interview (not just the teaser).

  1. You can close an angel round with ‘mass syndication’
  2. Start with terms and valuation below market
  3. What you want in your term sheet
  4. What you don’t want in your term sheet
  5. Should you have a board seat for seed investors?
  6. This isn’t comprehensive term sheet advice
  7. Memorize the term sheet before your first meeting
  8. How do you set your valuation? Price it to move
  9. How do you bring up the terms in a meeting?
  10. Describe how the terms are investor-friendly
  11. A preferred round is a good way to set up good initial terms
  12. Does a small seed round need protective provisions? Pros and cons.
  13. Get feedback on the terms in the first meeting
  14. Drop names to build social proof
  15. Social proof works differently in a Series A round with VCs
  16. See if the “interest” includes a dollar amount, intros, and name-dropping (a.k.a. soft circled)
  17. When do you need a lead?
  18. Approach the financing as if you won’t find a lead
  19. What’s a lead investor?
  20. If they say “find a lead,” ask why
  21. How to create a deadline
  22. Raise the money when you don’t need it
  23. Send two emails to the angels
  24. Do a rolling close: the cash comes in just- in-time
  25. Mass syndication can fail if a very high social proof investor drops out
  26. Use AngelList and StartupList to get intros to angels
  27. What do angels look for?
  28. Advisors are good for getting your foot in the door, not in a pitch
  29. Get advisors by going to events or talking to entrepreneurs
  30. Before you raise a seed round, you need a product in the marketplace
  31. Use customer development and lean startup techniques to get to market with less
  32. Pitching hacks free chapter: Advice on getting investor intros
  33. If you need money to get something in the marketplace, pitch idea investors
  34. Pitch incubators or do your startup on the side
  35. What are the different types of seed stage investors?
  36. If you’re talking to a VC, make sure they really do seed stage rounds
  37. Potential concerns with pitching multi-stage and seed-stage firms
  38. Get intros to seed investors with AngelList/StartupList


Here’s a transcript of the first 10 minutes of the 40 minute interview.

(Music: Squarepusher)

Nivi: Hi there, this is Nivi from Venture Hacks.

Naval: And Naval from Venture Hacks.

Nivi: And we’re going to talk about how to close an angel round, how to put together an angel round, or in other words, how to herd a motley crew of angel investors and turn those meetings that you’re getting into money in the bank.

I think we’re going to start off by talking about mass syndication, which is an approach that I think more entrepreneurs should be taking to close their angel rounds.

[

Some AngelList applicants don’t want to send their pitch to everyone on the list. Maybe they don’t want to send their pitch to angels who have competitive investments. Or they simply don’t want to distribute their pitch widely.

No problem. Use the ‘Custom Intros’ feature when you apply to AngelList:

We can give you custom intros, a mass intro, or both. Most startups ask for both. Even when we’ve already done a mass intro for a startup, custom intros get high response rates — about 50%.

And how do you research the angels you want intros to? Guess.

I hope you’ve enjoyed the introduction to this new introduction.

We recently wrote about the first startup that got funded through AngelList: Matt Mullenweg invested in a Y Combinator startup we called Startup #0.

Today, we’re announcing that Postling is the second startup to raise money from AngelList. The AngelList investors are:

Dave McClure (Investor in Mint)
David Cohen (Investor in Twilio)
Thomas Korte (Investor in Heroku)
Chris Yeh (Investor in PBworks)
Paige Craig (Investor in Plancast)
David S. Rose (Investor in Ambient Devices)
Thomas McInerney (Investor in Mochi Media)

Gary Vaynerchuk and Kal Vepuri, who aren’t on AngelList yet, also invested. That’s an awesome list of angels.

How did Postling do it?

First, Postling had traction — in fact, they were already charging for their product.

Second, they listened to customer and investor feedback and pivoted into a larger market during their fund raising process. More details about the pivot in this post on GigaOM — Postling’s website doesn’t reflect the pivot yet.

Third, the company was started by two of the founders of Etsy. But they didn’t need that pedigree to raise the round — they could have done it with just their traction and pivot.

Update: Read Postling’s story, in their own words: The inside story on how I raised $200k in 6 days.

AngelList is growing quickly

There are now 75 angels on AngelList and we’re adding 1-2 new angels a day like Mike Maples, Ram Shriram, and Aydin Senkut. You can track the day-to-day minutiae of these angel’s lives with the AngelList Twitter list:

Startups: Get intros to AngelList here. Angels: Join AngelList here. Everyone: Get AngelList updates with Twitter or RSS. Thank you all for being part of this.

You already know about AngelList, our curated list of top tier angel investors.

You also know that you can get in touch with these angels by sending us your pitch and, if it’s investment grade, we’ll pass it on to the angels. We’ve already announced the first startup that was funded this way and more announcements are on the way.

In the meantime, I thought you might like to know which angels have taken meetings (or are setting up meetings) with the startups we’ve sent to AngelList. It’s a pretty awesome list of angels. All of these angels have given us permission to use their name. In no particular order, here we go…

Dharmesh Shah (Investor in Backupify)
Thomas McInerney (Investor in Mochi Media)
Aaron Patzer
(Investor in Milo)

Shervin Pishevar (Investor in Gowalla)
Jeff Clavier (Investor in Mint)
Matt Mullenweg (Angel in DailyBurn)

George Zachary (Charles River)
Chris Yeh (Angel in EtherPad)
Jeff Fagnan (Atlas)

Brian Norgard (Angel in
Mike Hirshland (Polaris)
Alex Finkelstein (Spark Capital)

David Cohen (Techstars)
Bill Lee (Angel in Posterous)
Michael Dearing (Angel in Aardvark)

Rob Go (Spark Capital)
Richard Chen (Angel in Aardvark)
Joe Greenstein (Angel in Eventbrite)

Ann Miura-Ko (Investor in Modcloth)
Andrew Parker (Union Square Ventures)
Jon Callaghan (Investor in Meebo)

Ho Nam (Investor in JS-Kit)
Rob Lord (Investor in Grockit)
Pejman Nozad (Investor in Dropbox)

Fadi Bishara (Investor in Bebo)
Thomas Korte (Investor in Heroku)
Salil Deshpande (Investor in Engine Yard)

Mark Suster (Investor in
Peter Chane (Investor in Aardvark)
Gabriel Weinberg (Investor in Wakemate)

David Cowan (Top 10 on Forbes Midas List)
Bijan Sabet (Investor in Twitter)
Bob Shapiro and Drew Turitz (Sandbox Industries)

Chris Sheehan (Investor in Carbonite)
Sim Simeonov (Investor in Veracode)
Satish Dharmaraj (Investor in Posterous)

Keith Rabois (Investor in YouTube)
Manu Kumar
(Investor in CrowdFlower)
Bipul Sinha
(Investor in Sweepery)

Phineas Barnes (First Round Capital)
Saar Gur (Investor in Admob)
Ariel Poler (Investor in StumbleUpon)

Andrea Zurek (Investor in Tapulous)
You (Join AngelList →)
And You (Join AngelList →)

That’s 40+ angels and counting who have taken meetings from AngelList (ping me if I missed you or I shouldn’t have included you).

I want to thank all the angels who are making AngelList happen and the startups who are applying for intros. Startups, apply for an introduction to AngelList here. Angels, join AngelList here.

Image: Pink Floyd

Update: Here’s a simpler approach I like.

Scheduling meetings with investors — this topic is so banal you may wonder why someone needs to write about it all. But since we started AngelList, we’ve been making daily introductions between investment-grade startups and top-tier investors like Satish Dharmaraj (Posterous), Jeff Clavier (Mint), and Aaron Patzer (Milo). We see a lot of first time entrepreneurs trying to schedule meetings with investors.

This is not how you do it (based on a true story):


It is a pleasure to meet you. I would love to tell you more about Yomommaco. Next week we are at DEMO but the following week is wide open. Please let me know if there is a date/time that works for a meeting.

BTW, I am big admirer of some of your investments… KISSmetrics looks very interesting. Gowalla too.

Looking forward to speaking with you,

Yngwie Malmsteen
CEO, Yomommaco


What’s wrong with this email? First, Yngwie proposes meeting in over a week — what’s wrong with right now? Second, he doesn’t propose any times to meet. Third, he doesn’t talk about the fact that he lives on the other side of the country. Fourth, he CC’ed me instead of moving me to BCC. Fifth, he makes an attempt to add a personal touch about KISSmetrics and Gowalla but he’s too colloquial (BTW?) and the touch isn’t personal at all — it’s just a list of company names.

How to do it right

This is how you do it (based on a true story):

Thanks Nivi (bcc'ed).


I'm back in SF on Wed 3/31. I could meet anytime the following day Thurs 4/1 after 3pm or Fri 4/2 before noon.

Since I won't be in SF for 10 days and we've already secured some commitments for the financing, why don't we get the conversation started with a 30 minute phone call anytime tomorrow Mon 3/22 after 2pm or Tue 3/23 after noon? My cell is 213.333.8923.

If you happen to be in Cambridge, MA anytime between now and 3/31, I could meet you there. Similarly, if you're in NYC in the next week, I could hop on a bus and make that work too.

I'm looking forward to talking.

Yngwie Malmsteem

The principles of scheduling meetings with investors.

Respond immediately and be available to meet immediately. BCC the introducer. If you don’t live nearby, find out where the investor is (Plancast anyone?) and let them know if you’re going to be there soon. If you’re not going to be near them soon, propose a phone call. Propose specific times to talk. If there’s a deadline on the financing or you’re going to be oversubscribed, politely let them know. Write less — you have no idea how busy a typical investor’s inbox is. Don’t be colloquial. Attach a copy of your deck. Use an email program like Gmail that generates narrow fucking columns. Don’t write HTML emails. Include a cell # and URL in the signature and not much more. Bonus: include one line of good news — or start the email with a substantive sentence about a mutual acquaintance or something about the investor’s portfolio or blog or whatever.

P.S. Good news: we just hired Steve Wozniak. / Barney Rubble just committed to the financing. / We just had our first $1000 revenue day. / I got hair plugs and they look great.

Seed financings get done through a positive feedback loop of social proof, scarcity and momentum. Focus on the financing, get it done, and get back to work.

We launched StartupList 3 weeks ago and immediately updated you on the day after results (75 new angel applications, 7 startups getting intros to 11 investors). Now we’re 3 weeks in and we’ve got great news.

The first startup has been funded through StartupList. The investor is Matt Mullenweg and it’s a Y Combinator company. We’re not releasing the name of the startup right now but let’s call it Startup #0. This is a big milestone and we want to thank Matt, the AngelList investors, and the startups who’ve applied to StartupList for making it happen.

Power Brokers: Our new referral program

We also want to thank you for referring startups to StartupList and AngelList. And we want to single out Rob May (@robmay), founder of Backupify, for referring Startup #0. So we’ve created a referral program to thank you for your referrals. It starts with a list Power Brokers: people who’ve referred high-quality startups to StartupList — check it out.

Here’s what we do for the power brokers. If we select a startup you’ve referred for StartupList, we highlight your name to all the investors on the list (for example). This is an awesome way to build a relationship with the investors on AngelList (and us). Second, we’ll highlight your name in announcements about the startup (see the fine photo of Rob above). Third, we’re brainstorming other ‘thank-you’s’ for the power brokers. An invite-only conference with the angels on AngelList? A demotivational poster? Please share your ideas in the comments or email me.

If you refer a startup to StartupList, please tell them to fill in your name in the field for referrers in the application.

New investors on AngelList

We’re working through the investors who’ve applied to AngelList. There’s 54 investors on the list so far and about 25 of them have asked for intros to StartupList startups — here’s a few examples:

Ann Miura-Ko from Maples Investments
Jon Callaghan (Investor in Meebo)
Michael Dearing (Angel in Aarvark)

These are just a few of the new angels who’ve asked for intros… go browse all the investors and tweet them a hello.

And you don’t need StartupList to get in touch with the angels — you can contact many of them directly or, better, through the referrals they list. But you should still apply to StartupList because it often takes three tries to get a meeting.

Twitter Widgets

I’ve collected Twitter testimonials from AngelList members in our Twitter favorites:

Widget: Venture Hacks Twitter favorites

And this Twitter list of AngelList members is always fun:

Widget: AngelList Twitter list

Startups: apply to StartupList here. Angels: join AngelList here. Everyone: thank you for being part of this.

We’re blown away by the support for StartupList and AngelList.

Thank you to TechCrunch, Business Insider, and ReadWriteWeb for describing these lists better than we could.

Thank you to the well-known investors, successful entrepreneurs, and up-and-coming entrepreneurs discussing these lists on Twitter.

Widget: Twitter discussion about AngelList and StartupList

New angels on AngelList

75 new angels have applied to AngelList. We’re going through the applications one-by-one. I added some great investors today:

Chris DeVore from Founders Co-op
Robin Klein
in London
Thomas Korte, an investor in Heroku
David Shen, an investor in
David Rose, a New Yorker with 75 angel investments
Shervin Pishevar, founder of SGN
Pejman Nozad, an investor in Dropbox

And I didn’t even know these three entrepreneurs were angels until they applied to AngelList:

Jeremy Stoppelman, founder of Yelp
Joe Greenstein, founder of Flixster
Aaron Patzer, founder of Mint

Silicon Valley has a tradition where entrepreneurs start investing as soon as they can — and that tradition is spreading to the rest of the world.

Startups are getting intros

Since we released StartupList on Twitter a few weeks ago, we’ve introduced 7 startups to 11 investors. With their permission, here’s a list of investors who’ve gotten intros:

Jeff Clavier (Angel in Mint)
Bill Lee
(Angel in Posterous)
Mike Hirshland
Chris Yeh (Angel in AppJet)
Naval Ravikant
(Angel in Twitter)
Jeff Fagnan (Atlas)
Brian Norgard (Angel in
George Zachary (Charles River)
Alex Finkelstein (Spark Capital)
David Cohen (Techstars)
Matt Mullenweg (Angel in DailyBurn)

How to get on StartupList

We’ve received 50 new pitches from startups. If you’ve got a good pitch, don’t worry about getting lost in the noise. A good pitch will stand out — and we will find a way to help that startup through StartupList or something else. If you’ve got a great startup on your hands, people will insist on helping you out.

Yesterday, we published guidelines for applying to StartupList. We said we look for the same things that early stage investors look for: traction, social proof, and team. But we didn’t mention another critical piece of the puzzle: the quality of the pitch itself.

Spend time writing and re-writing an awesome elevator pitch. Our elevator pitch template is a good place to start. Then get feedback from good writers — writers who have fans. You have 100% control over the quality of your pitch and there’s no reason not to kick its ass.

Apply to StartupList. Browse AngelList. And enjoy the weekend.

I’m psyched to announce AngelList, a curated list of super high-quality angel investors. And how to reach them.

Investors like Jeff Clavier, Dave McClure, Rob Hayes, Aaron Patzer, Brad Feld, and 50 other investors have already joined. I want to thank all of the angels for taking the time to fill out these extensive profiles.

And it’s not fair for me to list just a few of the investors here — they’re all awesome. You should click and browse the entire AngelList. Together, they represent $80M that will be invested in early-stage startups this year.

Angels: How to join AngelList

If you’re an angel investor, apply to join AngelList here. At a minimum, you should have made two $25K angel investments in 2009 and plan to make two more $25K investments in 2010.

Startups: How to contact the angels

Read an angel’s profile before you try to get in touch with him. All the angels have listed how many investments they expect to make this year, their typical investment amount, the markets they invest in, how to get intros, and lots more information you can’t find anywhere else.

Some of the investors let you contact them directly. But, before you do, build a minimum viable product and learn something about your customers by putting it in front of them. If you can’t get that far on your own, go find some idea investors instead. Then send the angels an amazing 150-word elevator pitch.

Don’t send them nonsense. Angels talk to each other and they talk to me. Your reputation is all you’ve got — so please follow our suggestions in the previous paragraph.

And — stay tuned — we’re announcing a sweet new way to reach AngelList soon.

Get AngelList updates

Get notified about new angels on AngelList via RSS or Twitter. And here’s a Twitter list of the angels on AngelList: