Winning AngelList

Editor’s Note: Seth Goldstein co-founded and DJZ, has received funding from Kleiner Perkins and Google Ventures, was an EIR at Fred Wilson’s Flatiron Partners, and is an angel investor in Betaworks, Gumroad, and more. Michael Simpson also co-founded DJZ where he handles raising capital from angels and VCs, and previously worked at Greenhill as a banker.

It’s a 500,000 person party, and you’re invited. It’s 24/7, no charge for entrance, and when you leave you could go home with a pile of cash instead of a creeping hangover. As Fred Wilson says, “If you’re working in tech and you’re trying to raise an angel round, you have to be on AngelList. You just have to be there.”

AngelList is one of the most impactful additions to the early-stage funding ecosystem. It’s so crucial that we’ve dedicated a whole section to it in The Secret of Raising Money, our book on fundraising. We’ve used it to raise hundreds of thousands of dollars, and know many others who have raised millions. Our companies have been featured, and we’ve also used it to hire top-notch developers.

Here’s a framework for making it rain angel money as quickly as possible, followed by an interview with AngelList’s own Ash Fontana.

1.     Complete and launch your profile

First, complete your profile. How can you expect investors to give you money if you haven’t even taken the time to fill in all your information? AngelList gives you a handy little icon at the top of your screen that tells you how close your profile is to completion:

As you are filling it out, be concise. You want to avoid ‘tl;dr’. AngelList helps by imposing word limits to your answers and giving you thoughtful pop-up prompts as you type. Remember to add as many people as you can who are connected to your company in some way (e.g. customers, partners, attorneys, advisors, board members), as this will help you build your following and visibility.

Make sure that you are totally happy with your profile before you publish it. It may take a few hours, but it’s well worth it. A sparsely populated profile poorly represents your business. Remember: AngelList is frequently the first port of call for investors when trying to find out about your company.

Once your profile is complete and launched, assign somebody on your team to be in charge of updating it and monitoring all inbound messages (‘Contact’ and ‘recruitment contact’ highlighted below). Many of the fundraising and hiring-related emails are time sensitive, so you can’t afford to have them get lost in an inbox nobody is checking.

2.     Complete your personal profile and those of your team members

The team is featured prominently on your home page. Interested investors are likely to click through to view your profile, and perhaps those of your key team members. Get those profiles filled out. This is especially important for founders.

An often overlooked part of your own profile is the ‘reference’ section. You and your team members should ask others to write some praise in the box. You would be surprised how effective these references are – it’s just another form of Social Proof.

3.    If you are new to the platform, follow as many people as possible

If you are fundraising, you want to do this for a few reasons. Firstly, it raises awareness about your startup by pointing folks to your profile. Secondly, in order to be able to message a new investor on AngelList, either the new investor must be following you, or you must have friends in common with the new investor. The system is built like this in order to avoid a lot of spam. That said, don’t follow people who are entirely unlikely to be interested in your company or you’ll look disingenuous.

4.     First impression is key

Take particular care to manage the areas that new visitors see first when they arrive at your page. Give careful attention to the High Concept pitch (also visible in search results) and the primary image/video (both circled below).

The high concept pitch should powerfully communicate your business with the fewest words possible. This is not easy, but an exercise you will have to go through anyway for in-person pitching. It will also ideally contain some form of social proof, a concept which we explain in more detail in The Secret of Raising Money. Kivo’s social proof (above) is the fact that they were in Y Combinator’s S13 class. But the No. 1 goal is to keep this short and communicative. Here are some other good ones:

  • “On-demand evening package delivery”

  • “Sign anywhere, anytime”

  • “Scan and buy wine you love”

Choose a primary video / image that is very compelling. Viewers will likely prefer video, as a great video is typically more engaging and memorable than an image.

5.     Populate your profile with praise from others

As already stated, AngelList enables entrepreneurs to utilize and amplify social proof, one of the most important tools at your disposal as a fundraiser.

To this end, solicit advisers, investors and customers to write doting commentary about your business. Some examples below:

On a similar note, monitor the ‘Comments’ section of your profile. Consider deleting any comments that may tarnish your company’s image.

6.     Add investors as they commit, and get them to confirm participation

Add each new investor as they commit to your round. Include the actual amount invested, as this will feed into your fundraising status bar. Also, ask your current investors to confirm their investment so that they appear in the ‘Funding’ section. This is yet another way to increase social proof.

7.     Ask investors to share your company with their followers

Investors (and indeed anyone) can share your company’s profile with their followings on AngelList, Facebook and Twitter. This kind of endorsement is even more valuable when you are trying to close out the last segment of a round because it can stir up interest very quickly.

8.     Consider using Invest Online

Invest Online is a feature that allows investors to invest directly in your company via AngelList, with investments beginning from as little as $1,000. All investors have to do is click the blue button on your profile that says ‘invest’.

We have used this feature to raise money and found it highly effective, especially when you are near the end of a round: the near-complete progress bar creates a sense of scarcity, compelling individuals to invest. A decent amount of these investors will often be a particular class of angels who invest $1-5K at a time in a large number of startups using the Invest Online feature.

9.     Use tags to enhance your discoverability

AngelList allots you four ‘markets’ tags, one ‘location’ tag and an unlimited number of ‘technology’ tags. The ‘markets’ and ‘location’ tags are the most important, primarily because investors can ‘follow’ each of them. Choose your affiliation wisely.

By clicking on a tag, you can find out which other startups have classified themselves under the tag, and how many investors follow each tag. There is no exact science to this, but an advisable strategy is to pick a couple broad tags and a couple more specific tags. For example, if you are a website that sells products for infants, you could choose ‘E-Commerce’ (which has 76,674 followers at time of writing) as well as parenting (which has 2,772 followers).

10.    Promote your profile

AngelList makes it really easy for you to share your own profile (there is a “share” button at the top right of your company’s page), so spread the word. You can also ask your investors to share. The more followers you have, the more reach you have. For better or for worse, higher follower numbers also make you appear more important.

11.     Reach out to inbound investors

When investors come across a startup on AngelList that they like, they can choose to ‘follow’ or ‘get an intro’. You will be notified when somebody chooses either option. If you are raising money, and assuming you like the profile of the investor, you should reach out to them straight away.

In the email (in the case of ‘get an intro’) or AngelList message (in the case of ‘follow’), you should thank them for their interest, update them on funding progress and, if appropriate, ask to set up a call so you can walk them through your business. We have had a very high close rate with investors who ask for an introduction, and an above average close rate with those who follow. This underscores why it’s important to have somebody responsible for managing your AngelList campaign.

12.  Mine the networks of your current investors for further suitable investors

Warm introductions from current investors are one of the most effective types of introductions you can receive as an entrepreneur. By definition, you are presented to the new individual with a stamp of approval. It is a natural human tendency to seek consistency with one’s past decisions, and investors are no exception. Indeed, AngelList’s introduction system functions based on this principle – you can only reach out cold to new investors if you have somebody in common or they already follow you.

So if you are having trouble filling out your round, consider asking for introductions from your current investors. You can use AngelList to find and vet investors within your current backers’ networks.

13.  Get featured if you can

AngelList consistently ‘features’ a handful of startups, which usually happens 72 hours or less following the publication of a startup’s profile. These are chosen by the AngelList team and top VC analysts. Unfortunately there isn’t much you can do to get featured, except build an awesome company. Of course, relationships and dialogues with individuals at AngelList can help get you on the radar screen.

14.  Get your startup to ‘trend’

Trending means that you will be featured on the ‘trending startups’ area of the AngelList website and (if you are one of the top four trending startups) you will be featured in a weekly email that goes out to investors registered on AngelList.

When a sufficiently high volume of high-quality investors and/or candidates show interest in your startup in a short period of time, your startup ‘trends’. According to Babak Nivi, co-founder of AngelList “The rank of the person that is indicating interest matters. Rank is measured by track record: the valuation of the startups a person has invested in, founded, worked at, etc.” Bear in mind that it’s not easy to pro-actively orchestrate this process, but a handful have managed to do it. Ash goes into a little more detail in the interview below.

15.  Pay attention to the Admin panel

This area gives you personalized tips for improving your profile, as well as statistics on how many folks are viewing your page and following you. The latter is especially helpful information to track if you are actively trying to stir up a lot of interest with many investors at once.

16.  Post status updates and press mentions

Remember to continue to feed your followers with good news about the company. This is great for keeping existing investors excited about the company, as well as warming new prospects to the idea of investing.

17.  Stay organized

You’d be surprised at how rapidly investor interest can pile up. Pretty soon you can be juggling a large list of names, all of whom have shown varying levels of interest in your startup. You must keep some central database (just a simple Google doc can do the trick) detailing all of your open leads, the stage of the conversation with each, next steps, etc.

On a similar note, prioritize investors who are most likely to invest. While not a hard and fast rule, the level of completeness of an investor’s profile can give you a sense about how serious they are about investing. For example, if the investor has no profile picture, three followers and no confirmed investments, you should likely prioritize other investors ahead of him.

Interview with Ash Fontana of AngelList

What are some common mistakes that you see companies making on AngelList?

Firstly, many companies will wait until they have raised a certain percentage of their round before they begin raising on AngelList. You should raise money on AngelList in parallel with your other online and offline raising efforts. Investors want to be first to a deal. If you are out raising money for a while, and you wait too long before coming to AngelList, your deal will be stale by the time it hits our platform.

Second, people don’t create an AngelList profile until they begin fundraising. This is a huge mistake. You should create an AngelList profile and begin building your following as early as you possibly can. You should think of it as your business’s Facebook page. You need one in order to be discoverable.

Lastly, many companies don’t take the time to complete their whole profile. If you’re serious about raising money, you absolutely must build out your entire page.

How can a startup ‘trend’?

You can’t really game the system on this one. Make sure you get really good investors requesting introductions to your startup. Dollars invested on Invest Online / Syndicates factor into the algorithm, as well. Also, make sure to add new investors as they commit, along with dollar amounts

Any other advice?

Yes – use the “Find Investors” functionality. Our database is incredibly powerful. For example, if you’re making drones and you want to find a local investor who has experience investing in drones, our database will probably be able to find one for you.

Be proactive about engaging on AngelList much like you would on Facebook or Instagram. Like things. Comment on things. That’s how you pop up in users’ news feeds, which is a major way companies are discovered. Remember – there are literally hundreds of thousands of profiles on AngelList. You have to put in effort in order to stand out.

The last thing to remember is that the core value of AngelList is that it gives you more leverage in your fundraising. You could meet the vast majority of the angels registered on AngelList via other channels (e.g. LinkedIn, going to conferences, etc.). But AngelList makes it ridiculously easy and super efficient. Similarly, you can use social proof to help you close your round via a series of phone calls, emails and back-channel conversations. AngelList streamlines that process by advertising and amplifying your list of investors and advisers with minimal effort on your part.