Quora Underscores The Power of “AngelList”

For a brief period on Friday afternoon, Quora, the Benchmark-backed question-and-answer site, went down, and the digerati lit up with Twittersphere with questions about when the service would be reinstated. The answer, it turned out, was quickly.

Still, given Silicon Valley’s love of Quora, it’s unsurprising that one of its most popular question-and-answer threads in recent weeks has centered on: What do people think of AngelList?

Turns out the list, created by the “advice site” for entrepreneurs, VentureHacks, is considered indispensable, according to the 55 people who’d responded to the question as of this afternoon, many of them well-known investors like Dave McClure and Jon Callaghan of True Ventures.

It’s not surprising, given that the directory of more than 100 angels includes many of their likes, dislikes, and how best to reach out to them — information the investors provide in return for exclusive information about startups that have been vetted by VentureHacks itself. The feedback is worth reading all the same.

Because it’s so extensive, I’m publishing just the first five answers from respondents, but take a look at the original thread if you have time.

Ming Yeow Ng

Update: The best way to summarize AngelList is that they are uniquely placed to match high quality deals with high quality investors, bringing structure to a formerly very nuanced, inefficient and opaque process. These is due to them bringing together these 3 rare assets in a very simple manner that just works:
Outreach to emerging entrepreneurs through a very credible and far-reaching channel at Venture Hacks.
Getting participation of top angels, including former entrepreneurs. This is through the principals’ personal network and credibility in the valley.
Very high quality vetting, starting with the principals’ own domain expertise in consumer internet. Constantly upgrading the vetting process by allowing more veteran angels with excellent track record to send in deals.

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I have spoken extensively to several of the principals, angels, and startups involved in AngelList. Honestly, it adds an amazing amount of value to the community and  an increasingly important piece to the valley

One of the most important factor in a startup ecosystem is matching quality startups with quality capital.

There are 3 main difficulties in doing so, and Naval and Nivi solves them very elegantly by tapping into their network and reach.

1) Getting the best entrepreneurs to send in deals: With Venture Hacks’s very credible and far-reaching reader base, they have built up a reach to entrepreneurs of all stripes that VC firms can only dream of. Most importantly, entrepreneurs trust Venturehacks, since it is the one of the best source of no bullshit fundraising tips.

2) Getting the best angels to invest:  From my observation, they started with the very best/prominent angels (Dave McClure, Aydin Senkut, Mitch Kapor, Ariel Poler, CRV etc). This can be done obviously only by valley powerhouses like Naval and Nivi. They are now expanding that base by including more and more less prominent (but high quality angels). One very important component of that is former entrepreneurs – Matt Mullenweg (wordpress), Aaron Patzer (mint).

3) Exclusive yet inclusive vetting/filtering. Naval is one of the smartest people you will ever meet, and his understanding of what will take off in the consumer web is probably unmatched. So he knows how to keep the quality very high. At the same time, he understands that he does not have all the time in the world, and there are plenty of startups outside of his domain expertise — so he is always aiming to expand the people who can send deals into the list. This bodes well for keeping the quality high, yet trying the best to be inclusive of quality deals that the principals might not understand that well.

Summarizing, I am extremely excited about AngelList. This is just the beginning — as transparency, relevance to matching, even better outreach to longer tail angels and entrepreneurs happen, this has huge potential to change the investing game forever.

As an entrepreneur, do try your best to get a meeting with the AngelList guys, or folks who have the ability to send deals into the list. At the very least, you will get some excellent tips on what angels are looking for.
Aug 17, 2010

Mark Suster, Venture Capitalist

Angellist has been the most important Internet contribution to the angel community to come along in a while.

That’s a lofty statement, what are my claims?
1. It has brought visibility to young promising startups on a scale and with a speed I’ve never seen
2. It requires initial validation beyond you have a cool team / great product.  As a company you have to convince the first few high profile investors.  Once you have this “social proof” and have been vetted by Angellist you’re sent to a very targeted group of individuals.
3. You get the benefit of closing an angel round.  But the benefit is much, much broader.  You get visibility within the wider VC community that will help with future financings.
4. Because it’s well vetted the investors actually pay attention
5. If you’re a perfect match Nivi provides a “custom introduction” as in “you REALLY need to look carefully at this one.”
6. As an investor I have met many great companies and started relationships that I think will go way beyond whether or not I gave them angel money.

Who have I met that has informed me greatly on markets?
– TrueDomain
– Postling
– Transparent FS
– Tello
– HitPost

and many more.  And even ones in which I haven’t taken a call I often glance at the website.  Way more so than with a TechCrunch article.

My one recommendation – try to ask for some “custom intro’s” from Nivi as it makes the recipient feel more interested to take the initial call.

Anon User

Short Version:
We went to AngelList after finalizing our convertible debt documents with a great lead investor. Our target raise was $300K with a max of $500K on the round.

Within 2 weeks, we were over-subscribed for $500K and had to raise our max to $1M.

One week later, we were over-subscribed again at $1M! We ended up keeping the raise at that amount, and actually had to say no to 4 interested investors.

P.S. We just closed today. Haven’t announced it yet, so I’m keeping this anonymous.

Long Version:

Here’s the million reasons why you should use AngelList:

Babak Nivi, Naval Ravikant and Brendan Baker are extremely helpful. Not only will they include you in their list, but they worked for over an hour with me on my pitch and fine-tuned it so it was perfect.
Top-Tier Angels. The response was incredible. We met with Jeremy Stoppelman (CEO of Yelp), Dave McClure (Investor in Mint, Twilio), Joshua Stylman (Investor in Bit.ly), Benjamin Ling (Leadership roles at Google, Facebook), all through AngelList. All invested.

Momentum. AngelList helped our non-AngelList investors make decisions because they saw the Social Proof of being on AngelList and the investors who came with it. Eventually, we were moving so quickly that some investors were asked to make quicker decisions and many times those decisions tipped in our favor.
Over-Subscription. We still can’t believe it. If Nivi and Naval did not help us out, we may not have closed our round at all. Because of AngelList, we were over-subscribed not once but twice!

Shafqat Islam, CEO and co-founder of NewsCred

I’m happy to share my experience as an entrepreneur that just closed our round using AngelList. We’re based outside of the US (but relocating), so keep that in mind.

We reached out the Nivi and also sent them several recommendations from people in my network (i.e. you need social proof to get in). In 24 hours after we got sent out to the entire list, we had >20 of the top investors in the country reach out for meetings. I flew to SF and spent four days meeting everyone. By the weekend I had multiple term sheets and by Monday we had closed our round with exceptional investors that I could only dream about. So from start to finish, we raised our round in less than a week.

There is simply no other way to raise a round so quickly. The quality of investors in their network is incredible. They’ve made the fundraising process quick, painless and incredibly efficient. I’m still amazed this is a free service that they provide simply to help the startup ecosystem. There is such a thing as a free lunch and as entrepreneurs we should realize how lucky we are to have people like Nivi/Naval on our side.

Jody Sherman, CEO & Co-Founder, EcoMom.com

I’ve been following AngelList for the past several months as I prepared my company to raise our seed round.  I have always been impressed by not only the quantity of potential investors who have signed up, but more importantly the quality.

Take a look at the list and review who is participating.  Primarily investors with previous operating experience with a sprinkling of institutional investors who are predisposed to early-stage deals.  These are people you want invested in your company.  Not just because they have money, but because they can be enormously helpful.  From “social proof” (i.e., investors who represent the right “stamps in your passport”) to actual relevant experience in virtually every area in which you might want assistance, you will consider yourself fortunate if your company is selected to go out to this list.

When it was time for us to reach out for our round, one of our investors introduced us to Nivi and Naval.  After providing our write up and being selected, we were sent out to the list.  In less than 24 hours, we were in discussions with many potential investors and several of them have committed.

You can’t underestimate how much this can accelerate your fund raising process. Most of our round has been filled in with angels from this list.  I’m extremely grateful to have been selected and just as grateful for the introductions which have proven so useful to us in getting our round done.