Case Studies Posts

When startups raise money with AngelList, we encourage them to share their fundraising story. Here are 3 stories from BlockChalk, MightyMeeting, and Postling. I’ve excerpted the nice things they wrote about AngelList, but you should click through and read their whole posts — each startup tells their unique funding story from start to finish.


AngelList [is] a service that sends pre-screened startup pitches to angel investors who sign up to receive them. We wrote up a version of our pitch that matched AngelList’s requested format (an exercise that in itself was very useful) and submitted it. They sent it out to the list and within a day we had received ten quality angel inquiries. In just a few days, we had our first new commitment — Tom McInerney.

“After Battery Ventures signed on to lead our round, Nivi and Naval sent BlockChalk out to AngelList once again. With this new added social proof, the response was even stronger than the first time around. We literally received dozens of new angel inquiries and things began to rapidly come together. In the span of a few days we had a commitment from the legendarily awesome Mitch Kapor. We also met Josh Stylman who signed on and also introduced us to Chris Dixon and Eric Paley of Founder Collective (who themselves signed on).

“AngelList is a remarkable experiment that is redefining the way entrepreneurs connect with angels. It’s something you want to be a part of.”


“We’ve been fortunate to get great advice from a few good people. Let me mention some of them here.

“First, there is Adeo Ressi’s Founder Institute. I did not get a chance to attend the training program, but I did have the pleasure of pitching at the Founder Showcase.

“The outcome of the event has been tremendous, and Adeo’s advice has been invaluable, always blunt and to the point. One of his emails started with: “You are making rookie mistakes and your round will fail”. Got my attention.

“True to the style, Adeo’s offers an honest review of the investment community. Definitely worth a look.

“Second, there is Venture Hacks. The blog is run by Nivi and Naval. I actually discovered their book before I discovered the blog. Both are highly recommended. Good stuff that will educate you and save you tons of time.

“Venture Hacks also runs AngelList. You can apply online. If you got the goods, you will get intros to angels in the list. The intros carry Venture Hacks credibility, which is significant.

“In our case, the intros we got through the Founder Showcase and through Venture Hacks lead to great connections and, ultimately, money in the bank.

“I also had good experience with the Open Angel Forum and the DEMO conference. Both are very selective. Both are also very high quality in terms of the advice and the connections that they offer.

“The exposure and intros we got helped us build the funnel.”


“AngelList is a collection of amazing angel investors, all waiting for your brilliant idea. You fill out an application and, if you’re awesome enough, your application will be sent out to everyone on the list. You’ll then be introduced personally over email to anyone who is interested.

“… we sent out our application once, touting our idea of “social media management for businesses”, got 8 fantastic introductions, and were ultimately funded by David Rose and Chris Yeh. The Venture Hacks guys came back to us and said, ‘We want to send your application back out onto AngelList with the added social proof of being invested.’

“To give you some context, over the last 3 months, we followed the Customer Development methodology and went outside of the building. And we found that the social media management tools space was commoditizing quickly, with everyone concentrating on selling to a small sliver at the top (media companies, PR, agency, etc). We also met with VCs, who gave us the same feedback. So it was time to pivot.

“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 Venture Hacks 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.”

Big thanks to the guys from BlockChalk, MightyMeeting, and Postling for sharing their fundraising stories for the benefit of other entrepreneurs.

“Lean startups are built from the ground up for learning about customers.”

Eric Ries

I recently sat in on Eric Ries’ presentation on lean startups at Berkeley. The slides and audio are below. The presentation is about one hour long and it is gold.

Audio: The Lean Startup (mp3)

Slides: The Lean Startup (pdf)

The audience consisted of students from Steve Blank’s course on customer development. So you will hear an occasional remark from Steve or his students. When Eric refers to a “case”, he is talking about this Stanford GSB case about his company, IMVU, and his previous company,

Built to learn

Many founders believe that early stage startups are endeavors of execution. The customer is known, the product is known, and all we have to do is act.

Eric takes a different approach. He believes that many early stage startups are labors of learning. The customer is unknown, the product is unknown, and startups must be built to learn.

IMVU learned its way to product/market fit. They threw away their first product (40,000 lines of code that implemented an IM add-on) as they learned customers didn’t want it. They used customer development and agile software development to eventually discover customers who would pay for 3D animated chat software ($10M in revenue in 2007). IMVU learned to test their assumptions instead of executing them as if they were passed down from God.

Learning to learn

This is the scientific way of building startups. It requires a commitment to learning and thoughtfulness. It is being documented in books like Steve Blank’s Four Steps to the Epiphany and blogs like Eric Ries’ Startup Lessons Learned. It represents the triumph of learning, over the naive startup creation myths we read about in the media. 

IMVU learned to learn. This process can be replicated at your company. Please do try this at home.

Update: Eric writes a follow-up to this post on his blog.

William Pietri left a great comment on Books for Entrepreneurs: Agile Software Development:

“Great to see these approaches getting more attention in the startup world. I’ve been soaking in both agile methods and startup companies a long time, and I think they go perfectly together. They provide just enough structure to make everybody effective, without unnecessary constraints or process bloat.

“One of my clients, started with an XP-ish process from the first week. They had an alpha for investors in 2 months, a private beta in 3, and a public beta in 4 months. Now they’re happily funded, up to a dozen people, and just shy of Alexa 1000 site [emphasis added].  Weekly iterations meant they always had new progress to show potential investors. And being able to change direction easily meant they could try a lot of things out and invest heavily in areas the users liked.

“Speaking of which, I and a colleague are interested in trying out some variations of the Planning Game with a couple of user-focused startups. If any VH readers want to be guinea pigs, we’re looking for Bay Area teams that are early in the process, actively struggling to put together a product plan, and have both business and technical people involved full time. If there’s anybody here that meets those criteria, just drop me a line. My email address is my first name at my domain name [].”

Also check out An XP Team Room, where William walks us through the offices of a lean startup in gory detail:

Watch the master pitch man, Steve Jobs, analyze the market for NeXT workstations in Part 1 of his Chalk Talk. He explains:

“Who is our target customer? Why are they selecting our products over our competiton’s? And what distribution channels are we going to use to reach these customers?”

Steve covers a handful of the slides that you see in a typical startup deck: Marketing, Sales, Competition, and a little bit of Problem and Solution. We should all strive to present with Steve’s clarity and simplicity.

Here’s part two of the video. Thanks to Daring Fireball for pointing me to this video.

Summary: If you’re having trouble writing an elevator pitch, try using bullets. And challenge yourself to keep the pitch under 100 words.

I received a cold call elevator pitch yesterday that was very effective. It was short (88 words not including the signature), the company had good traction, and the author used bullets to make his case (4 out of 5 bullets were about traction). Here it is (with the author’s permission):

Subject: Cold emai [sic]

A quick “cold email” to see if you would be interested in helping X raise money.

Our Story

  • We are the the X of Y
  • Over X Million registered users
  • Growing at X new users per day
  • Projecting growth at X new users per day in next X days
  • Zero cost per customer acquisition

If you are interested please contact me 🙂


The prose, spelling, and formatting could use a little work, but the pitch was brief and effective. I’m going to follow up with him.

Later that day, I was helping a client refine his elevator pitch. We were stuck on the prose so we decided to try bullets and it worked well. Here’s an example:

Subject: Introducing Ning to Blue Shirt Capital

Hi Nivi,

Thanks for offering to introduce us to Blue Shirt Capital. I’ve attached a short presentation about Ning. Here are some of the highlights:

  • Ning lets you create your own social network for anything. For free. In 2 minutes. It’s as easy as starting a blog. Try it at
  • We have over 115,000 user-created networks and our page views are growing 10% per week.
  • We previously raised $44M from Legg Mason and others, including myself.
  • Before Ning, I started Netscape (acquired by AOL for $4.2B) and Opsware (acquired by HP for $1.6B).

We’re building Ning to unlock the great ideas from people all over the world who want to use this amazing medium in their lives.

I’ve admired Blue Shirt’s investments from afar. We’re starting meetings with investors next week and I would love to show Blue Shirt what we’re building at Ning.


Marc Andreessen

Not bad. But at 158 words (not including the signature) it’s almost twice the size of the cold call I received today. Compare this Ning pitch to Ning’s pitch without bullets. Which one do you like better?

John Manoogian sent me this great trailer for The Player, a satire of the movie making system in Hollywood:

(Link: The Player)

Silicon Valley is the Hollywood of startups.

Business plans are scripts, entrepreneurs are writers, engineers are talent, VCs are studios, angels are independent financiers, recruiters are casting agents, lawyers are lawyers, advisors are agents, points are options, TechCrunch is Variety, and so on.

What analogies am I missing?

Mike Cassidy‘s talk on building companies fast is a must-read for all entrepreneurs:

(The slides are here if you don’t see them embedded above.)

Mike founded Stylus Innovation (sold 2 years after launch for $13M), Direct Hit (sold 500 days after launch for $500M), and Xfire (sold 2 years after launch for $110M). Mike is currently the CEO of travel guide and tour review site Ruba.

cassidy.jpgI originally saw Mike’s talk at Dave McClure’s Startup2Startup. The audio from that talk is not available, so I pieced together some clips of Mike on Tim Ferriss’ Art of Speed panel at SXSW: Mike on the Art of Speed (mp3).

You’ll learn a lot more from the slides if you listen to the audio too.

I want to give Pinch Media a shout-out for mentioning our post on high concept pitches in their funding announcement. Their pitch is,

“FeedBurner for iPhone developers.”

Can they shorten it even further? “FeedBurner for iPhones”?

I wonder if they used our other hacks too when they negotiated their deal with Union Square Ventures and First Round Capital. (Mobile analytics must be picking up steam; Motally just joined Venture Hacks—they “track and report usage statistics across mobile websites.”)

Some people think high concept pitches are too simple. I agree, they are too simple—that’s the point. They’re the beginning of a conversation, not the end of one.

There are too many startups vying for too little attention. You simply won’t have the opportunity to tell your whole story at once. A high concept pitch is a meme that you use to capture some attention, so you have the chance to tell the rest of your story.

Marc Hustvedt, an angel investor on Venture Hacks, calls the high concept pitch a “Hollywood pitch”. I like it. “Hollywood pitch” is shorter and more concrete. Which one do you prefer?

Anthony Stevens read our article on high concept pitches and decided to write a high concept pitch for his startup:

“So, let’s see: my startup is Crowdify, a tool for brand and reputation managers to discover new insights into consumers’ attitudes about their subjects and make better decisions about marketing and public relations strategy. We do this through semantic analysis applied to consumer-generated correlations among and between brands and reference data. Further, we utilize social-networking metaphors to keep interesting information flowing back and forth between branding people and the consuming public.”

Most elevator pitches look like this: long, boring, senseless, and ineffective. You probably stopped reading after the first sentence. Or the pitch looked so long you didn’t read it at all.


Fortunately, Anthony came to same conclusion:

“That’s a little wordy, especially for a business card, so let’s try a little high-concept pitch development. Hmm… relations that people will understand. “A for B”, where A is a known brand in my space, and B is the target audience… how about:

Facebook for Brands

“I think I like it! Not least of which is the rumor floating around today that Facebook is about to be acquired by Microsoft for something like 15 to 20 billion dollars.”

I like it too. Anthony started with a long paragraph that actually hurt him more than it helped. Then he turned it into a high concept pitch that opens the door to a conversation about his company.

todd.jpgTodd Vernon, the CEO of Lijit, has written a great article on raising money from angels. I especially like his taxonomy of angels:

The Family Investor: The Family Investor is likely not really a classic Angel Investor at all but rather a supportive family member that “knows you”. Their motivation is likely out of support (sometimes guilt), but their basic investment thesis is they trust you. For me these are the worst type of investor because you likely have intimate knowledge of their financial situation and whether or not they ‘should’ be investing. Likely, they have no inherent feel if your idea is good or not, but may have changed your diaper at one time or another and have overcome that experience to hand you a check for $25K or $50K. Personally, I like this category of investor the least because the investment is totally emotional and personal – and that sucks in business. But based on the financial situation of the individuals involved and the relationships this can work ok if everyone comes into the situation with their eyes open, but go out of your way to make sure.

The Relationship Investor: The Relationship Investor is probably one or more co-workers from a previous gig or business friends you have known for a while. They may or may not understand what your new company is doing but they have had a track record working with you. They want to be supportive, but are looking for a return. You won’t lose them as friends if things go bad, but the investment for them is likely not ‘trivial’. In my experience these are good Angels to have, again as long as their eyes are open going in. These people can also be wildly supportive of you in terms of finding employees and other resources.

The Idea Investor: The Idea Investor is probably very familiar with the space your company is targeting. These are in some ways the very best types of Angels because to some degree they validate your idea. There investment is based on the Idea and there is little emotion around the table (always good). If you can get them onboard they can open doors into partner relationships and just generally good advice. You will spend most of your time convincing the Idea Investor that you and team are the right people to attack this problem (as they likely don’t have a strong relationship with you or the team). Often an influential Idea Investor makes a good early board member for the company.

The Once Removed Investor: The Once Removed Investor is likely connected through a personal or professional relationship with either the Relationship Investor or the Idea Investor. They likely don’t know you, and they likely don’t have a clue if your idea is good or bad but they have translated the trust in the investment to the person they know. This is a great way to get additional Angel Investors onboard, but without a solid Relationship Investor or Idea Investor it just isn’t going to happen.”

Read the rest of Todd’s article, it’s great.

Via: Ask the VC.