6 Tips To Rapidly Raise Funding on Angel List

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6 Tips To Rapidly Raise Funding on Angel List

 

The following is a guest post by Rick Perreault. Rick is co-founder & CEO of Unbounce, a Vancouver-based company that develops a web based platform which makes it easy for non-technical marketers to build & test landing pages without having to rely on I.T. or web developers. Rick tweets @rickperreault about marketing, entrepreneurship and backyard vegetable gardening (during the summer months).

I recently had the opportunity to use Angel List (http://angel.co/) as part of raising a Series A for Unbounce and wanted to share a few things that I learned along the way.


angel list icon
First off, Angel List is a pretty awesome service that makes it easy for introductions to happen between entrepreneur and investor, kinda like a mini Facebook for investors and entrepreneurs. However, there were some things I wish I would have done differently or had known before I got started. I made some mistakes. In some cases, I was not as prepared as I could have been and learnt alot on the fly. So today I want to take the opportunity to share the top 6 things I did that helped me raise capital with Angel List.


Tip #1 Use video to tell your story

In hindsight, probably the most effective thing I did was include a link on our profile and in all my email correspondence to a video of me giving our pitch I had the opportunity to pitch at the last GROW Conference here in Vancouver and lucky for us, they recorded it. I included it on our Angel List profile and almost everyone that contacted me commented that they watched it and especially liked the Q&A. Here is the link to the video: http://www.youtube.com/watch?v=1WcpFqKA7So

You don’t need to spend any money doing this either. Record yourself giving your pitch and providing answers to all the typical questions that you get from outsiders and post it on YouTube. Your passion, conviction and knowledge of the problem you are solving will come across in ways that a deck can never achieve and by presenting your own Q&A, you’ll skip all the typical questions and have a much more constructive meeting when you get on a call with an investor.

Tip #2 Get commitments for endorsements early

You probably have advisors and/or commitments from investors already or at the very least, someone of influence that likes what you are doing. Let them know that you are going to raise investment via Angel List and ask them in advance if they would endorse your company. Once your profile goes live, your first email(s) should be to them asking them to comment & share your profile.

There are a lot of companies posting on Angel List and having people of influence endorse your business will help you stand out and give visitors to your profile page a reason to take a good look at your startup.

Reality Check: If you can’t get at least one person of influence to endorse your business, you are not ready for Angel List.

Tip #3 Prepare your email responses in advance

In our first 24 hours on Angel List, we received a lot of followers and request for introductions. Both are opportunities to pitch your company as both enable you to contact the investor but unless you are prepared in advance, it can be overwhelming — I was not prepared on our first day.

Typically, those who follow you may simply be curious while those who request an introduction are interested so use your available meeting times on those who are asking for an introduction. Additionally, there are those who fit your criteria as an ideal investor better than others and reality is, you may get more interest than you can handle so remember to focus on those who fit your criteria as an ideal investor first.

Prepare your initial communication in advance and save them in a text file. Here are the three responses that I used.

a) For those who followed us:

Hello [Name]

Trust you are well and thank you very much for your interest in Unbounce. I’ve attached our current deck and I’m including here a link to a short video about our company [link to video]. Let me know if you have any questions about Unbounce and please feel free to share this information with others.

Best Regards,

b) For those who requested an introduction:

Hello [Name]

Trust you are well and thank you very much for your interest in Unbounce. I would love the opportunity to introduce you to our business. Would you be available [day] at [time] for a quick call? In the meantime, I’ve attached our current deck and here is a link to a short video about our company [link to video] for you to review. I look forward to talking soon.

Best Regards,

c) I had a third response for those who I really wanted to speak with:

Hello [Name]

Trust you are well and thank you very much for your interest in Unbounce. Having read your profile, I would love the opportunity to introduce you to our business. I’m hoping to have a short list of investors by [short time period] and currently have [investor] and [investor] confirmed. Would you be available [day] at [time] for a quick call? I’m also free for the next hour if you have a few minutes to give me a call on my mobile [your number]. In the meantime, I’ve attached our current deck and here is a link to a short video about our company [link to video] for you to review. I look forward to talking soon.
Best Regards,

I tweaked this a little for each individual however, having these on hand saved me from having to write 100+ emails from scratch.

Tip #4 Prepare an investor data sheet

You’ll need an effective way to keep track of all your investor contacts and conversations - your leads. You’d be surprised how easy it is to not remember who’ve you’ve spoken to or how the conversation went. Seriously, after your first dozen calls, your memory will fail you so get into the habit of writing stuff down.

As contacts are made, you will need to keep on top of your leads so prepare a spreadsheet in advance (recommend Google Docs). I organized mine by name, email, contact #, VC firm [If applicable], Links to Angel List & Crunch base profiles, a field for notes and finally, amount they typically invest. The beauty of Angel List is that you can learn a lot about the investors that contact you and based on their profiles, almost predict if they will be a good candidate or not. For this reason I also included a rating for each potential investor on my spreadsheet.

Sub-tip: speaking about bad memory and calls, it’s hard to take good notes when you are pitching so I found it helpful to have someone else on the call with me when possible to act as a second set of ears & take notes.

Tip #5 Rate your investor contacts (just like you would your prom date potentials)

Related to my investor data sheet, I also created (truthfully, by evolution than by design) an investor rating system. Nothing too complicated but effective. Why? Because we were not interested in all investors equally and investors were equally not all interested in Unbounce to the same degree. I gave a sets of points, one for our interest in them and another for their interest in us with low interest being 1 point, 2 points being the middle, and high interest 3 points. For example, a high profile investor with a history of investing in our space and interested in what we are doing might be something like, our interest high + their interest medium for a total of 5 points. Another example might be an investor with no previous investments nor experience in our market and for various reasons is lukewarm on the investment opportunity, our interest low + their interest low or med for a total of 2 or 3 points. By each name I had two numbers and over time these would either go up to down or replaced with a yes or no. Think of it another way, this is really no different than the process you went through in trying to choose the perfect date for your high school prom.

All this is important because you have limited time and it will help prioritize your actions and focus who you want to spend your time on. So when a #6 wants to have a call at 3PM to discuss the opportunity and a #2 wants a 3PM conference call to introduce me to one of their friends that will help #2 validate whether or not this is an opportunity, you will quickly know who to bump to a later date. Again, think of it like the prom, if you spend all your time asking people who are the wrong fit, you run the risk of not having any date for the prom.

Tip #6 Share the responsibility of raising capital with someone on your team

Finally, raising capital is a lot of work and you will not sleep well until you close the deal. However, to get it done fast and as painless as possible, you will need support from your team and you all need to discuss in advance what role each of you would play in this big step for your company. In our case, Unbounce COO Jason Murphy was the other half of this initiative and CCed on everything. We broke down responsibilities like this:

My role was to pitch and get a yes from the investors we wanted on board and was responsible for maintaining our Angel List profile, our deck, leading all the meetings and initial contacts. Jason on the other hand came in after the first meeting to provide all follow up material (CAP table, financials, corporate) and coordinated all interactions between respective legal teams. This division of responsibilities allowed us to move fast but more importantly, allowed us to support one another when either of us were feeling overwhelmed – it will happen.

That’s it — glad you made it this far & please let me know what you think. While this list is just a handful of things that helped me, feel free to add any additional tips in the comments below and maybe we can turn this into the ‘comprehensive’ list of tips to use Angel List. Thanks for reading.

What do you think?  Have you tried raising a fund through Angel List?  Any tips you've picked up along the way?  Any questions on the process?

Posted by Dharmesh Shah on Wed, Aug 01, 2012

COMMENTS

Great guide and can't echo enough that "it is NOT a one man show" - getting outside buy-in and having internal support are keys to success. 
Raising capital is just like that promo analogy only better - if you are good you get more than one partner for the fun!

posted on Wednesday, August 01, 2012 at 12:23 PM by Nik Souris


great post. insightful and one that can be easily followed. may be rick, you can do a post on ur insights on angel interactions.

posted on Wednesday, August 01, 2012 at 1:34 PM by Deboprio


I've got a HOT employment opportunity for most of the readers of this blog! I'm working with a very well known VC (perhaps the most known and respected of all) that is looking to hire a VC Tech Analyst! I've got an exclusive on this search and would be happy to tell anyone about it and present a job description! Please feel free to email or call: 415-820-6347

posted on Wednesday, August 01, 2012 at 1:36 PM by Heinz Bartesch


You solved my problem! thank you! How long did it take you to close your Serie A round?

posted on Wednesday, August 01, 2012 at 1:38 PM by Pierrick Bouquet


Great Info! 
 

posted on Wednesday, August 01, 2012 at 1:39 PM by Corey


Rate your investor contacts = Rate your prom date potentials. Love it!

posted on Wednesday, August 01, 2012 at 1:41 PM by David Temkin


we have developed led light source in india. we are looking for partners investors for promotion and production

posted on Wednesday, August 01, 2012 at 1:41 PM by yogesh


Great Tips. I have been in the "Pitch" mode since June 15th and have learnt a lot. Your tips resonate well. One more I would like to add, as I have started implemeting this strategy now, is resaerch the interest and activities of your potential investors. Be willing to talk about them other then your Pitch. They listen to hundrds of Pitches, and it does become mundane. You want to be a friend first.

posted on Wednesday, August 01, 2012 at 1:45 PM by Manoj


Perfect timing - thank you Rick for sharing all that detailed information.  
 
We're getting ready to post to Angel List next week. This will help me immensely. 
 
Many thanks!

posted on Wednesday, August 01, 2012 at 1:45 PM by Annabel


Nice capture. Good match to reality I've experienced. Why not provide a use case with results on how you use your own tools to grow your biz?

posted on Wednesday, August 01, 2012 at 2:07 PM by Nora Ryan


I like that you have a concise follow up system. However, what if your competitors are lingering around and you send your deck/video to them?

posted on Wednesday, August 01, 2012 at 2:07 PM by Melani Gordon


WOW, GREAT ARTICLE. REALLY APPRECIATE ALL THE TIME YOU TOOK TO PUT THIS TOGETHER.

posted on Wednesday, August 01, 2012 at 2:12 PM by Bob McCracken


Hi Rick, 
I was watching your pitch video while my wife was "organizing" things in the room. Then she said; is that Michael Douglas you are listening!! :-))  
 
congrats! Best.

posted on Wednesday, August 01, 2012 at 2:29 PM by Zlatko


Thanks everyone! Your comments are encouraging me to write another. Let me try to answer some of your questions. 
 
Deboprio, specifically what interactions are you interested in? 
 
Pierrick Bouquet, it took about 3 months to close our Series A 
 
Nora Ryan, good idea, maybe subject of next post  
 
Melani Gordon, good point however, not too concerned about 'accidently' sending my deck to a competitor. Nothing in the deck that will allow them to get an actionable advantage. Reality is, I don't spend too much time worried about my competitors and focus on being the best we can be. 
 
Thanks Zlatko!  

posted on Wednesday, August 01, 2012 at 3:05 PM by RIck Perreault


Rick - these are great tips. A lot of it pertains to the logistics of managing investor communications and information. Seems like an opportunity for an entrepreneur to develop a platform for automating the process!

posted on Wednesday, August 01, 2012 at 3:14 PM by Akira Hirai


Listen up people, Rick has the right of it.

posted on Wednesday, August 01, 2012 at 3:20 PM by Roger


Very thoughtful article - thank you for sharing. In particular, I now appreciate the importance of having both a video pitch and endorsements lined up in advance of posting to AngelList. 
 
Out of curiosity, since you were raising a Series A, was this your first time posting to AngelList or did you already have a profile courtesy of your Seed rounds?

posted on Wednesday, August 01, 2012 at 3:27 PM by Mitchell Fox


The pitch feels rehearsed and can have more energy in the beginning. But thanks a lot for the useful post ;)

posted on Wednesday, August 01, 2012 at 3:51 PM by Ayush


Useful info, thanks a lot!

posted on Wednesday, August 01, 2012 at 4:05 PM by Luiz Duraes


Great article. Good pointers.

posted on Wednesday, August 01, 2012 at 4:16 PM by Jim Casey


Thanks.

posted on Wednesday, August 01, 2012 at 4:55 PM by Daniel G. Hayes


Excellent points - thanks for sharing about your road to success!

posted on Wednesday, August 01, 2012 at 5:50 PM by Craig Smith


Great article, did you start out without a lead investor?

posted on Wednesday, August 01, 2012 at 6:47 PM by Conall Arora


Great and practical insights on managing pitches and helping on deal closures. Insightful. 
 
Many thanks for sharing these learning experiences. 
 
Best wishes 
 
Deepak Nanda 
Chairman and MD 
Knightsbridge Financial Services Pvt Ltd 
Pune, India

posted on Wednesday, August 01, 2012 at 7:28 PM by Deepak Nanda


Great bit of resource for later on for us. And like a date selection process, we don't have to be so desperate and can reject the not so attractive offers. One question are the angel investors the guys and the startups are the gals?

posted on Wednesday, August 01, 2012 at 7:33 PM by Desmond Sherlock


I found the article most interesting, informative and filled with good information. I have been in the shark tank before for "Bowl Gamer” www.bowlgamer.com ]...And I am constructing a product that will utilize a different fund raising vehicle - the Indiegogo platform, because I am only looking a "seed money amount" [ $ 250,000 ] and the amount will not really attract an serious VC’s - they only want to get into deals at several Millions of dollars - And I understand that. 
 
I am confident in our product [“CEFopoly”] that once we have enough funding via crowdsourcing - the need for VC money will change. I am not counting VC’s out of the future -Because actually my team and I believe VC’s may provide one of the exit strategies. However, for the entrepreneur that is only requiring a couple of hundred thousand US dollars [$ 100,000. to $ $ 500,000.] - Most VC would feel we are wasting their time - and in the initial starting phase they just might not be the best fit in what’s needed. 
 
However I do value VC’s because many times they bring expertise and “personnel” recommendations with “know how”, and a valuable network beyond capital. And execution is critical early on for most start-ups. 
 
Again, Thank you 
 
Jim Johnson, 
Creator & Developer of **** CEFopoly ***** 
************************************* 
CEFopoly TM (Trademark is registered with the USTPO - # 85470598) /  
Provisional patent is registered with the USTPO {# 61620446} and a treatment is filed with the WGA / Writers Guild of America. 
******************************************* 
Following CEFopoly TM - will provide insights - @CEFopolyMedia - https://twitter.com/#!/CEFopolyMedia 
- Thx  
 

posted on Wednesday, August 01, 2012 at 7:46 PM by Jim Johnson


Thanks for a great post. Looking at Angel list In the last week or so. This will really be invaluable moving forward.

posted on Wednesday, August 01, 2012 at 7:51 PM by Luke Sankey


Rick, solid post thank you.  
 
I'm an Unbounce evangelist, send me anyone who needs to 'validate' the opportunity and I'll set them straight. 

posted on Wednesday, August 01, 2012 at 8:19 PM by Sean Sherwood


Best post anywhere in a very long time. Someone actually sharing how they won. And a great subject. Perfect timing by the way.

posted on Wednesday, August 01, 2012 at 9:45 PM by Tim Cook


Excellent article, it's refreshing to see successful Vancouver start-ups featured in reputable blogs like this. 
 
For Tip#4, I've found that Highrise can be hugely beneficial.

posted on Wednesday, August 01, 2012 at 11:09 PM by Darren


Very practical easy to follow tips. 
Thank you for the post

posted on Wednesday, August 01, 2012 at 11:13 PM by Shabareesh


One of the best guidelines stated, its really helpful for guy like me who have no idea about raising funds other than envisioning about the product

posted on Wednesday, August 01, 2012 at 11:23 PM by GP


Great post Rick! Interesting and practical.  

posted on Thursday, August 02, 2012 at 1:15 AM by mohan


Rick and Unbounce - you rock and make us all proud - and your belief in the fellow startup community is awesome, especially as it's followed by action such as this blog! Great advice and only thing I would add is that the same can apply to another fundraising popular platform - gust.com

posted on Thursday, August 02, 2012 at 2:03 AM by Alexandra T. Greenhill


Thanks for the post Rick. Helped me in ways you may have not even intended

posted on Thursday, August 02, 2012 at 6:26 AM by Andrew


Thanks everyone for yet more feedback. Let me answer your questions 
 
 
Mitchell Fox, our first posting on AngelList was when we raised our Series A. 
 
Ayush, it was rehearsed :) 
 
Conall Arora, "did you start out without a lead investor?" No. When I posted our profile live, Real Ventures & 500Startups were already committed and Mark MacLeod was our lead. 
 
Desmond Sherlock, both 
 
Sean Sherwood, great to hear!  
 
Alexandra T. Greenhill, thanks! 
 
Cheers, 
Rick 

posted on Thursday, August 02, 2012 at 12:52 PM by Rick Perreault


Well said! I will be passing this along to clients - this is a great "guide" they really need!

posted on Thursday, August 02, 2012 at 1:29 PM by Mark Long


Great info Rick. After reading #1 I wondered how effective a simple pitch video would be. Your pitch was good but the real hook was the q/a session. Excellent answers to good questions from very smart people. That's a great springboard to a meeting. So you've had to screen both investors and dates? You're doing something right. 
Frank

posted on Thursday, August 02, 2012 at 5:34 PM by Frank Traylor


What great, well thought out tactics for us first timers planning to use Angel List or any other on-line fund raising platform. Thanks for taking the time to share your insights, it's people like you that make the community so strong. 
 
...and thanks to you Darmesh for posting it.

posted on Friday, August 03, 2012 at 3:23 PM by Brian Allman


But what do you do if you don't have anyone to endorse you??

posted on Saturday, August 04, 2012 at 3:16 AM by Shachar


Great article, excellent insight. Congrats on the round! Glad our Vancouver startups are getting more exposure and capital from the Valley.

posted on Saturday, August 04, 2012 at 11:17 AM by Rob G


These are awesome ideas to save a lot time time in the fund raising process. Great post.

posted on Sunday, August 05, 2012 at 4:12 PM by ADI Pumps


I think it is interessant

posted on Sunday, August 05, 2012 at 8:13 PM by amhare


Thanks Rick. So can you give an example o types of info you did include and what you wouldn't include.  
 
IE: customer traction, active users, total number of users etc.... 
 
Obviously financials, revenue etc. would be provided in a more closed environment after speaking to someone a few times.

posted on Sunday, August 05, 2012 at 11:38 PM by Melani


Great post! So now the big question is, how do you get that first endorsement? I'm about to start a seed round for my company, but as you stated, my company isn't ready for angellist until we get some endorsements. Any suggestions would be greatly appreciated.

posted on Monday, August 06, 2012 at 12:28 PM by Charlie


Best post on this (or any other site) that I've read in a long time. It made my bookmark list. 
 
Many, many thanks.

posted on Monday, August 06, 2012 at 9:41 PM by Andrew Ellis


Love it - especially around having endorsements BEFORE going on Angel List

posted on Wednesday, August 08, 2012 at 1:00 PM by Michel Rbeiz


Sign me up!

posted on Thursday, September 06, 2012 at 3:29 PM by Jonathan Charles


Comments have been closed for this article.