Tips for Using AngelList for Entrepreneurs

6 Nov

While our economy is in the dumps, consumer confidence remains glum, and jobs are still hard to come by, I believe the silver lining lies in innovation and entrepreneurs.

During this time of hardship, it may not seem like the ideal time to fork over a huge chunk of change to begin your dream endeavor of being your own boss. Mashable reported on a site called AngelList that provides a smoother transaction for small business hopefuls looking to connect with moneybags.

The site provides a meet-up place where start-ups can upload their business plan, network with investors, and hopefully land a little dough. I checked it out. The idea is great but because it is relatively new there is room for improvement in user experience.

As someone who wants to run their own business, having an angel investor may not seem like the most ideal scenario. Isn’t one of the perks of starting your own company is you are your own boss? Regardless of this fantasy world some may want to live it, reality sets in for many and investors are their only option.

Technology is making it easier than ever to connect with investors who may helped cash-strapped entrepreneurs live their dream for a stake in the business.

Even though, the online world is making it easier to find angel investors don’t expect to raise capital with the snap of your finger.

AngelList has approximately 50 to 100 new start-ups a day, and only 1% actually achieve their goal.

If you are thinking about using AngelList as a way to get investors chomping at the bit to fork over their hard earned money for “the next Facebook,” you may want to follow Mashable’s guidelines to ensure you fall into the 1% success rate.

1. Make It Easy for Investors To Write Checks

AngelList offers you all the tools for success. It is designed as a hub for start-ups that encompasses all the best of Twitter, Facebook, LinkedIn. Use it to its full capacity by utilizing all its applications.

2. Start with the Basics

I agree with Mashable on keep your profile private until it is complete, polished, and nothing is left blank. They do state to avoid inputting press as a way to lure potential investor because no one really cares if your idea got picked up by The New York Times. Really?

Doesn’t this go against the golden rule of publicity—there is no such thing as bad publicity? Look, if you get a write up in The New York Times, state it. Don’t get overboard but give yourself props when deserved.

3. Find a Good Referrer

On AngelList you are only allowed one referrer. Most people provide the person who referred them to AngelList, but if you have a better one use it.

4. Shop It Around to People You Already Know

Have a solid list of advisors but only add people who are impactful. You don’t want to have too many people you kind-of, sort-of know. Really step back and think about who you know and if they would add to your start-up.

5. Use Your AngelList Profile as Your Executive Summary

Joshua Baer, the Mashable contributor, suggests when someone wants to see your executive summary you direct them to AngelList and not a personalized link sent through an email. I get a bit suspicious about this recommendation, as Baer has raised a substantial amount of money on AngelList and contributed to many start-ups. It kind of sounds a bit like a plug for the site. Investors may want to cut through the bull and not deal with the hassle of signing up on a new site that you pushed them to do. On the other hand, the site is relatively new and many inventors may not know of its existence. It may be a great tool for you to not only showcase your project in a professional format but also show them who else has invested, comments, and other information they may find relevant.

6. Be Responsive

This tip seems like a no brainer. If investors are looking at your start-up, respond to them as quick as possible. You don’t want a great opportunity to slip through your hands because you were lazy. Baer does offer some email templates for the follow-ups but emphasizes customization. After I glanced at the templates, they seem a bit, well, generic. I am not sure if filling in your name, the person’s name, and company information will really help spiff it up, so take his recommendation with a grain of sale

7. Look for Your Lead Investor

It was highly suggested not sending out this mass email blast looking for people to invest. Look for one leader, perhaps someone who has invested in other companies similar to yours, and reach out to them. They may have their own circle of friends who also may be interested.

8. Fill Out the Round

Once you have snagged your lead investor, it is time to schmooze. Get your profile front and center to anyone interested in your area of expertise. If you get investors on board, have them introduce you to others or if needed take a look at their LinkedIn profile for another route of contract. As a pusher of AngelList, Baer does suggest you make all the appropriate steps outlined in his article in order to catch the founders of AngelList’s attention.

9. Keep Your Profile Active and Up-to-Date

Keep your profile fresh with news, updates, and investment activity. I definitely agree with this tip. The more alluring you sound, the more likely you’ll land the cash.

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