A young Silicon Valley venture firm is taking the wraps off a piece of software that it says makes it a cinch for founders to figure out which VCs are worth approaching, based on stage, sector, and a variety of other factors.
Serial entrepreneur James Currier — who cofounded NFX with longtime business partners Gigi Levy Weiss and Stan Chudnovsky (who’s also the head of product at Facebook Messenger) — says that like so many innovations, Signal comes from a problem he found himself struggling to address.
Though part of NFX Guild’s promise to founders is to help them navigate the fundraising process, he says there was “no place for us to get an easy, clean list of active investors, where we could choose our target investors, then export that into a Google Doc or whatever.”
Signal is focused foremost on founders, but it should prove useful for VCs, too, says Currier. He uses travel startups as a theoretical example. “For [the early-stage venture firm] Felicis Ventures, a related intro is [a waste of everyone’s time]. Felicis doesn’t invest in travel, but no one knows that and there’s no easy way for Felicis to signal that to everyone. Or,” adds Currier, “say you’re an investor and you haven’t really spent time with blockchain startups. You won’t pop up on a founder’s radar as a result, but if you say on Signal that you’re starting to [poke around], you will.”
It does seem fairly straightforward, for what it’s worth. You simply connect your Gmail or sign in separately with a user name and password and start searching and filtering through 4,500 investors in mostly Silicon Valley and Israel whose profiles have already been ported into the platform. (Currier and his team created these snapshots themselves; he says investors can now go in and tweak or add to their bios or else join the platform if they don’t seem themselves listed.)
Afterward, you collect a short list of your target investors, then export the list to a spreadsheet or whatever tool you’re using to manage your fundraising process.
Current members and alums of NFX Guild have already been using the platform for months. Currier says that 94 percent of them choose to connect their Gmail because the platform can then rank which of the founders’ contacts have the strongest relationships to the specific venture capitalists they want to talk with. (Currier notes that “we don’t look at any email stuff; we’re just looking at metadata.”)
After the founder zeroes in on which of his or her contacts have the closest relationship to the VCs they need to talk with, they can ask for — and hopefully receive — an introduction the old-fashioned way: via email.
Currier calls what NFX is releasing today “version 1.0,” explaining that in the future, founders will be able to land an introduction directly through the platform. They’ll also be able to send their own private and secure company summary, making it easy for investors to evaluate whether there’s a fit.
In fact, there’s already a “Signal Elite” version of the platform, but it’s only available to NFX Guild founders and companies at the moment.
One of them is Sarah Schaaf, an attorney who spent a year with Google before launching Headnote, a workflow startup aiming to help attorneys get paid faster, close more clients and collaborate more efficiently.
Schaaf went through the NFX program last spring and says she “had an incredible reaction” after the outfit’s demo day but wasn’t ready to fundraise until late last year. The problem: as someone who “grew up in a family of attorneys,” she said she could figure out who the “best 20 VCs are” but finding out who the best VCs for her startup’s stage, area, and particular financing needs was becoming a “total nightmare” that involved poring over LinkedIn, Crunchbase, and CB Insights, among other data sources.
With Signal, she says, she quickly zeroed in on SoftTech VC, which recently led a $2.5 million round in her company. “I could tell on a scale of 1 to 10 who to ask” for an introduction. “It cut right through the noise.”
By the way, if you’re a VC, you might be wondering if Currier and company will be expanding Signal to include a way for you connect with the right people at pension funds, universities, and other institutions that might fund your firm. Currier says it isn’t high on NFX’s list of priorities, but he’s definitely hearing from investor friends who wish it were otherwise, adding with a laugh, “We might end up going there.”
Here’s a video if you’re curious to learn more.
Pictured above, left to right: Michael Groeneman, director of engineering; Currier; and product manager Peter Simones.