AngelList the World of Startups | Best Practices & How to Trend (A Case Study by Boatbound)
Angel co – A platform for both angel investors and startups. Like many founders, Boatbound had many ideas, started a few companies, used their own money for some, and raised money for a handful of others (which is always better than using your own money).
Boatbound had the first experience using AL in 2011 when the company, Dress Rush, got into 500 Startups. At the time, AngelList was a very different site and most people were still learning about AngelList and how to leverage it properly to raise money.
Boatbound and the team ended up raising over $530,000 for seed round, but only a small percentage of it actually came via AL. Most came from what he called “Lilly-padding” (jumping from one contact to another by way of introduction).
Although Boatbound did list its committed investors on AngelList co it didn’t cause new investors to knock on their door. Announcing fundraising efforts on AL was more social proof than anything else at that time.
Flash forward to Boatbound, 2013.
AngelList co had matured and executed on their vision to turn it from a place where startups created a profile page listing their investors, into a platform being used by VC’s, angel investors, job hunters/seekers, startups, and other companies leveraging their API. Their reach was significantly higher, seed/angel investment was evolving, and more money was flowing directly through AL every day.
These changing factors led Boatbound to believe that AL was going to be core to Boatbound fundraising strategy. This time around, they raised most of this seed round from investors who found Boatbound through AL or through the online investment option.
Before actually creating a profile on AngelList co, Boatbound spent a bit of time deconstructing how AngeList worked so that I could better leverage the platform. Boatbound quickly decided that becoming a “trending” startup, or getting featured on AL, was the quickest path to increase reach. This was the first step in the fundraising process for.
Next, Boatbound wanted to figure out how to get “reach”. Each Sunday, AL sends out an email to all investors promoting the top four trending companies. Boatbound knew from talking to investors that they keep an eye on the trending list to find new companies.
Becoming a trending startup on AL was based on either one of two things. Either these startups were hand-picked by AL, or they were selected via a formula based on certain “actions” that happen on AL. Since AL also has a “featured” section, the conclusion was that the trending list of startups was created using a formula.
In order to be able to achieve the maximum reach, Aaron believed I would need to get Boatbound ranked between 1-4 most trending on AngelList co every Sunday to be featured in the weekly email sent out to investors. The longer we could keep Boatbound on that list, the longer Aaron could keep the momentum going, maintain our reach, and make it easier to achieve Boatbound fundraising goals.
How to Trend on AngelList
Since we achieved our goal of staying on the trending list for weeks in a row, I have been able to get to know the team inside of AL better and know they’ve changed their formulas a bit so that people like me can’t “hack” the system (whether fairly like we did or unfairly by paying for follows or some other method).
It’s no longer just a simple formula (my assumptions were pretty close to accurate). To trend now, you’ll need to focus on these actions:
Actions from investors
- Intros: Investors have to initiate this action by clicking “request intro” on your profile.
- Commitments: This happens when you add an investor to your current round
Actions from non-investors
- Customers: This is a new feature on AL, so they are pushing it by encouraging companies to use it.
- Reach: Although these don’t directly impact your ability to trend, they do extend your reach, giving you distribution and ultimately a greater probability to get more of #1.
AngelList: Do some preparation
There are a few things I set up before launching our profile on AL. I knew that if I started getting interested that I needed to respond quickly and be able to track my progress with each interested investor. Here’s the system that Aaron set up:
AngelList: Tracking spreadsheet
I put together a spreadsheet to track investors who were interested as well as investors who committed. Since I worked off this spreadsheet on a daily basis, there wasn’t a need in my mind to use a CRM or something more complicated. This was ghetto, but it worked.
There are two tabs on the spreadsheet;
- Investor Interest Tab: I kept this updated every time I’d get an email from AL. It tracks the following:
Investor sophistication (1-3): I’d use this to set the urgency on when I talked to them, how long I met with them, etc.
- One: No listed investments
- Two: Confirmed investments on AL
- Three: 3+ investments/sophisticated investor/VC/notable angel
- AL URL: for quick reference back to their profile
- How they connected: I used a different template for each (see below) (1); Intro: I would try to set up a call with any intro request (2); Invest online: I would email investors information, but treated these more as a potential small, passive investment and didn’t set up a call unless they were a “three” on the sophistication scale.
- When/how I first contacted them: I’d try to get in touch with each person within 24 hours while interest was still in the front of their minds.
- Probability of investing: I’d fill in this portion after having a discussion with them and use the templates outlined in the section below for follow up.
- Not interested. No follow up.
- Limited interest or too much work. No follow up.
- Couldn’t get a good read, follow up required to further vet. Interested. Requested terms. Send “terms” email.
- High probability/commitment. Send “after investor commits” email
- NPA Signed/money wired. Send a personalized email and set up a call if necessary.
- Investment amount:
- Discussed – I used this column for any soft-circled money to give me an idea of the overall money we could potentially raise. My process included vetting each investor who had an interest. In many cases, we actually decided not to take money from some investors even though we had already soft-circled their investment.
- Committed – Once committed, (which meant we vetted them and approved their investment), I immediately added these investors to our list of investors on AL and began the process of sending the NPA for them to sign.
- Online – This assumes you are raising money via the online investment option on AL. I tracked this option as well, as we were working to top off the round and had the online investments capped.
- Investment Status Tab: This feature tracked investors that had committed to the round, how they were investing, the method they were sending funds when money was received if NPA’s were sent/signed, and if I sent out the executed note.
- Create email templates
If things go well, you’ll get a lot of intros, follows from new potential investors, and invest online notifications. I wanted to be able to respond quickly to each. In order to do this, I set up a few templates that I could send within 24 hours after receiving the AL email. I would personalize all communication to investors I was familiar with, or that were a “two or three” on my sophistication scale.
Note: I used canned responses in Gmail, but you could even be more efficient by using ToutApp to track opens, etc.
AngelList: How to craft an email
Thank you for reaching out to us through AngelList (Insert link). I’m sure you’ve already had a chance to view our deck, but just in case, here is a link to the latest version – (insert link). The basic terms of the note are a $6mm cap, 20% discount, 4% interest rate.
After reviewing it, if you think there may be a good fit, shoot me two or three times over the next week (weekends are fine) so I can answer any questions you may have. Also, let me know where you are located so we can sync time zones if necessary.
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