(4 votes, average: 4.25 out of 5)
Loading ...Fascinating article in Wired about the resurgence of angel investing in the US, as well as a new software platform for angel investors that seems to be a category killer for now. Alok, would you know more about this?
Okay, so what? Well, the classic V.C.’s simply have too much money under management, and too expensive a talent pool, to waste time looking at investing anything less than $10 million in a project. Meantime, no entrepreneur wants to give up equity by taking in more money than he absolutely needs. So, when it only costs a few million to get a serious new company off the ground, how can the V.C.’s really play? They have to find places to make gigantic gambles, usually overpaying because the other big V.C.’s are also trying to invest in the few really big-dollar opportunities out there. It has become a system doomed to failure.
The flip side of the story is the rise of angel investor groups. These investment consortiums have always been ideally positioned to provide $500,000 to $5 million equity injections; but until recently, that wasn’t enough to get a serious effort off the ground. More fundamentally, however, they have historically not been terribly investor-friendly, largely because the individual members have other occupations.
The individual members didn’t work in the same place or even at the same times, so angels were terribly inefficient at evaluating transactions, sharing information, and negotiating and documenting deals.
Those days are over, thanks to software developed by David Rose, founder of the New York Angels (yes, I belong). Angelsoft is a wonderful collaboration platform that manages deal flow, helps match talent and expertise to projects, provides easy-to-use data rooms for potential investors, and generally drives the investment process. It combines project management and social networking in a way that, for the first time, makes the angel process efficient for both the company seeking capital and the potential investors.
The big news now is that, in a period of just a couple of years, over 400 angel groups around the globe have standardized on the platform. That means, of course, that they will also be able to share deals between themselves, vastly expanding the capital and expertise available for any given project.
well, some of the numbers mentioned above are out of whack - VCs routinely do $3-5M investments. Angels more typically do a million or less. However, it is correct that in US, total VC money and total angel money are about equal buckets (angels investing in far more companies, of course) - $20bn each if I am not mistaken.
I have heard good things about angelsoft - in fact, met the founder there, and we have been evaluating the same for Indian angel network as well. Dont have first hand experience on it though. From what I understand, it helps angel investors and groups manage investments and the investment process. I personally have been thinking of a platform that allows angel investors manage a large set of consideration companies - before a serious investment dialogue happens… of course, it may just land up being a not-for-profit like venturewoods
Does somebody (angel,investment analsyt,mentor) has the patience to build a business model around it.Which aliens the missing link in business models,aliens various individuals .Act as convergent to startups in similar spaces to match their resources.
Vikas
Alok…Good to hear that you are thinking such kind of a platform. Here is my experience with Angelsoft.I just wanted to post a message in angelsoft, the website told me “Angelsoft charges a non-refundable $250 application fee for posting to the Investor Community.” India is, of course, a different market. What about the global market with less fees to build/run the non-profit website? The same website that can cater India with minor modifications can cater the whole world.
Prady - good thought - it might be even possible to talk to angelsoft to see if they want to partner - they seem to have a lot of base stuff done, and it would be great just to build on top of it,
You might want to check:
http://www.gobignetwork.com/ as well. While this doesn’t fly for investor groups quite as well, it’s good for one-on-ones. As many propel have probably seen, angel investment is usually never about groups, but one-on-ones.
I must say I’m not a fan of group investing unless it’s big ticket. For small sums - sub 1 crore in today’s parlance - it shouldn’t have to be decided by a group, which tends to only delay stuff. A committee has a productivity of 1/(number of people in it) compared to an individual.
I think angelsoft addresses certain investor concerns, like those that get too many enquiries. In an age where a company can be kickstarted with less than 20 lakhs - indeed less than 10 - it might make sense to raise small sums with say 4-5 investors that truly know your space. If that’s true, the need of the hour is to link startups with individuals for small ticket investments.
But that would mean both startups looking for many people x small ticket money, which is not a very easy transition to make.
Alok,
We would love to see the Indian market adopting Angelsoft and I would be happy to discuss this in detail with you. Please send me your contact information.
To be clear about the $250US charge. Angelsoft is free to any organization whose core focus is investing. That means VC’s, angel groups, and others. Any angel group or VC can use Angelsoft’s platform and participate in the community and accept applications from entrepreneurs - for no fee. If an investment group decides that they want to charge the entrepreneur to apply (as many do), then Angelsoft facilitates that - but does not charge the entrepreneur. Angelsoft also offers the ability for an entrepreneur to apply to the ENTIRE Angelsoft community at once (all 11,000 investors in 415 investment groups, in 43 countries) for a $250US charge. If an entrepreneur selects the group to apply to directly; however, we do not charge. ONLY when they want to post to all groups at once, do we charge.
In regards to your comment, “I personally have been thinking of a platform that allows angel investors manage a large set of consideration companies - before a serious investment dialogue happens” You have just described the CORE of Angelsoft. It is an enterprise grade tool for investors and investment groups to manage large sets of companies through the entire deal flow process. We have VCs and angel groups that receive hundreds of submissions each month and they tell us that it is only through Angelsoft that they are able to manage and keep track of all of it - and be able to effectively and nicely communicate with ALL the entrepreneurs that reach out to them.
I look forward to speaking to you and helping the Indian market.
Sincerely,
Mark I. LaRosa
VP of Sales, Angelsoft
Deepak,
the challenge of linking start-ups with seed-stage capital is especially difficult here in India at the moment. At India Development Gateway we see it as the need of the hour like you do and we’re working hard to help early stage SMEs extend their reach among friends fools and family with better tools for connecting and representing their business plans. By helping bring in the first few anchor investors, enterprises will have a far better time securing traditional VC interest in a 1st or 2nd round, and we believe we can provide that extra push that start-ups in India often need.
please have a look: www.IndiaDevelopmentGateway.com. We are in early stages of our own development and thus very welcoming of feedback and suggestions. Also we do have a few competitors focused on the Indian market who are worth checking out including: pitchindia.com and EDACapitalConnect.com
any questions please feel free to email me Devin a t intellecap.net
Devin,
Its very nice. I went thru the site and it is pretty good.
I am sure something like this will be very useful for Indian entrepenuers.
Rgds
Vyaas
Angel Soft is interesting , I am keen on some quant. I visited their website but did not come across too many success stories & user testamonials , just a single podcast of a guy who received angel funding
Anyone out there who has used angel soft and seen traction ? not everyone gets funded but I am keen on knowing the response buzz from angel soft before I consider or recommend it to anyone