Thanks for the mention Fred. We certainly agree with the comments. We too are most excited about the data. We’ve been up and running for years now, so it’s good to see we’re now at the point where we have enough data to start providing relevant reports. And it’s also great to see that the VC community is getting so excited about getting on board as well – this time next year we should be able to report on some very neat VC stats as well.
Angelsoft is a big fan of transparency as well, and never before has anyone been able to offer so much insight into the early stage investor community. Not only are we doing this through our data, but also through the entrepreneur tools we’re providing. The entrepreneur angst is significantly reduced for those VCs and angel groups using Angelsoft because of transparancy.
Mark LaRosa VP of Sales, Angelsoft
Hank Williams
· 1 year ago
I would agree that the data is more valuable to users than the map stuff. But I do think that giving people real thumbnail dynamic insight into a site is going to become much more common and important compared to dry static homepages. As I think about what our homepage will be like, this has definitely informed my thinking. I think its going to be more important than just eye candy.
Ryan Graves
· 1 year ago
I love the movement towards open. From open source software, to open sharing of data, being open provides the opportunity for more and more competition. As the Google Chrome comic stated, competition is best for all competitors. Trying to close and cut off entities from involvement in the competition will hurt all parties (see Microsoft). Fred I'm glad you are giving the right people props and attention.
T.R. Teller
· 1 year ago
I've never understood why VCs and Angels are proud of figures like that 1% investment outcome in AngelSoft's Deal Funnel widget.
I know it's meant to communicate the awesome selectivity, popularity, and ultra-focused diligence of the investor, but in reality, it makes their process seem wildly under-screened, signals a near-pathological fear of pulling the trigger, or puts the lie to the amount of capital genuinely available for new investments.
I mean, it's one thing being picky if you're KP or Benchmark or something, but if you style yourself an "angel" and you're passing on 99% of the ideas that find you, that's not a credibility builder.
And If you're an "angel coalition" and you're making more money off of reg fees for the 99% of ideas you pass on than the 1% you're backing, you're not in the investment business, you're in the scam business
Jschwa
· 1 year ago
T.R.,
From the perspective of an entrepreneur I can see how it feels that way. From the perspective of investors the reality is very different. When you are an investor, your goal is to put money to work. Everyone in the early-stage industry would love to fund more deals. To them that 1.3% doesn't represent how selective they are, it represents the number of fundable deals that come through the system. They would like nothing more than for that % to rise. The unfortunate truth is that most deals that are presented to investors aren't fundable. What raises an investor’s credibility is not how much they invest, but how much they return.
Angel Groups, or coalitions are you call them, do not make a profit. Almost all of them just break even. Submission fees help offset costs, and act as a decent filter against frivolous submission, which helps to raise that 1.3%.
Jason Schwartz Entrepreneur Community Manager, Angelsoft.net
T.R. Teller
· 1 year ago
Oh, I'm sure that more than 98.7% of the deals presented to you are "unfundable."
My guess, in fact, is that a full 100% of deals that come your way are, strictly speaking, "unfundable."
I mean, why would an entrepreneur with a demonstrably fundable idea go to some wannabe angel network for small change, especially when you're wasting 99% of your time saying "No Thanks" to the 99% of crap your nervous-nelly network of near-anonymous plungers has deemed "unfundable."
I mean, if you want to throw figures at me showing how you're investing millions and closing a dozen deals EVERY WEEK, then I might admit your method is interesting. Then I might admit your group isn't a bunch of total posers.
I mean, please do let me and everyone know if that's the case -- you'll likely see higher quality entrepeneurs try their luck with your screwball process!
But as it is, you're all talk, no walk.
For all the investors in your network, you don't represent real capital, you haven't proven investment acumen, you don't have impressive returns to show off, you don't have success stories you can point to. You even admit you barely expect to break even.
You're not investors, you're a social club.
I mean, for all these reasons and more, most capable entrepreneurs wouldn't even acknowledge an angel outfit like USV as anything more than glorified bloggers/lookie-loos.
Why in the world would they take AngelSoft -- or any of your dubious peers -- any more seriously?
davidsrose
· 1 year ago
T.R, let's try to look at this calmly, since we are all ultimately on the same side here, trying, as I wrote in Angelsoft's mission statement, "to get more smart money into more good deals." I clearly understand your frustration with the challenges of getting early stage companies funded, but let me try to respond specifically to each of the points that you've made:
Oh, I'm sure that more than 98.7% of the deals presented to you are "unfundable."
The essence of a free market economy is that sellers may offer anything they want for sale, at any price the feel is appropriate, and buyers may buy, or not, anything that is offered for sale at a price THEY feel is appropriate. In a free market with perfect information, if no buyer is willing to purchase something on offer, then by definition the price is "too high". The inverse is that if there are ready buyers but not enough product, someone will step in and offer products until the market clears.
Historically, the angel funding 'market' has been highly IMperfect. I've likened it to an investor and an entrepreneur running around a football field in the middle of the night wearing dark sunglasses and earmuffs trying to find each other. With Angelsoft, for the first time we have actually managed to create a more perfect market: there are over 11,000 accredited investors who are taking the time to participate in angel investment groups precisely because the WANT to invest. Why else would they be here? At the same time, with the Angelsoft 'Community' we have provided a way for an entrepreneur to place his or her plan, completely with summary, video, et al, directly in front of these investors.
Logic, and the theory of free market economics, say that if 11,000 willing buyers can look at the presentation of a plan and decide not to invest...yes, it probably IS "unfundable by objective, economically-motivated angel investors". (Note that it may still be fundable by friends and family members, or by strategic investors, all of whom are motivated by something other than pure, stand-alone risk/reward economics.) Bill Payne (one of the most respected angels in the country, and an Entrepreneur in Residence at the Kauffman Foundation for many years), has written a good post on what kind of things make a deal 'fundable'.
My guess, in fact, is that a full 100% of deals that come your way are, strictly speaking, "unfundable."
Not at all! I have personally invested so far in two deals that I found through the Angelsoft Community, and have brought half a dozen others in for screening to the angel group to which I belong.
One of the things that is not intuitive at all is how the economics of angel investing work. While most entrepreneurs wouldn't begrudge an investor an annualized return of, say, 25% on his or her invested capital, given the risk of early stage investment, the surprising, and probably terrifying, fact is that in order to achieve that kind of return, angels need to target getting back 30 times their money on each deal! While I'm sure that seems virtually sociopathic, I've written an explanation of angel economics that may prove helpful in understanding it.
I mean, why would an entrepreneur with a demonstrably fundable idea go to some wannabe angel network for small change, especially when you're wasting 99% of your time saying "No Thanks" to the 99% of crap your nervous-nelly network of near-anonymous plungers has deemed "unfundable."
It is a question of supply and demand, and what other options are available. If an entrepreneur can personally fund his or her idea, then there's no need to seek angel funding. Likewise if he or she has a well-heeled family or circle of friends who are willing to provide financing. But if the idea requires outside financing, things get quite a bit tougher. Banks are not in the risk-taking business, and will simply not provide startup financing. Venture capitalists fund an even smaller percentage of companies seeking funds (MUCH smaller: last year, VCs in the US funded about 1200 startup and early stage companies; angels funded about 50,000).
So the question of "demonstrably fundable" may not be quite as clear-cut as it may appear on the surface. If no professional (or semi-professional) investor, having seen the proposal, is willing to fund it, I think that in a free market one would then have a hard time describing the plan as "demonstrably fundable". I think it's pretty hard to describe investors as "nervous nellies" unless you compare them to something else. I'm assuming that you would not invest your own money in a "hot prospect" from Nigeria that arrived via email, so would that make you yourself a "nervous nelly", compared to someone who was naive enough to do so?
As for the "near-anonymous" comment, that is a function of each angel group. My own group, New York Angels, proudly lists our members on our website (including folks like Esther Dyson, Gideon Gartner, Josh Kopelman, and other well-known investors), as do many other groups.
I mean, if you want to throw figures at me showing how you're investing millions and closing a dozen deals EVERY WEEK, then I might admit your method is interesting. Then I might admit your group isn't a bunch of total posers.
I'm a little confused by this one. How on earth could anyone, angel or vc, possibly look at enough deals, or do enough careful due diligence, to close a dozen deals a week?? I don't know of anyone or any entity in the history of investing that has had that kind of bandwidth. Our own group, New York Angels, has invested about $35 million during the past six years, and closed about fifteen deals this past year. I, personally, have invested in over 70 startup companies so far. I think it would be pushing things to call us 'posers'.
I mean, please do let me and everyone know if that's the case -- you'll likely see higher quality entrepeneurs try their luck with your screwball process!
While I'd certainly agree that the process is far from perfect, calling it 'screwball' might be going a bit far. At Angelsoft we've tried to make it as streamlined and rational as we can. What suggestions would you have for us to improve it?
But as it is, you're all talk, no walk.
I think that's unfair. Simply looking at the stats shows that over 11,000 investors are participating and actively looking for investments, and have reviewed deals over 100,000 times. According to the most recent statistics from the Center for Venture Research, angels in the US last year invested $26 billion, into mostly early stage companies.
For all the investors in your network, you don't represent real capital, you haven't proven investment acumen, you don't have impressive returns to show off, you don't have success stories you can point to. You even admit you barely expect to break even.
It's important to remember, as others here have noted, that Angelsoft itself is not a network; we are simply a software platform that services networks of angels. But that said, given the numbers above, I think it's pretty clear that the 412 organized angel groups using Angelsoft clearly represent real capital. The metrics and risk of early stage investing are such that, as I previously noted, fully half of all investments fail. Nevertheless, according to a study released last year, angels investing through angel groups have been averaging a 27% internal rate of return on their investments. Compared to just about any other form of investment, including bank deposits, stocks and hedge funds, that's actually quite good. As for the 'break even' mention, I think that might be a misunderstanding of the context. Most angel groups are not-for-profit as a group, and operate at breakeven. Their goal, however, is to help their members make a profit on their investments, which, as the statistic above shows, they usually do.
You're not investors, you're a social club.
Again, Angelsoft is neither an investor itself, nor a group, we're simply a software company. But for the angel groups who use the platform, social discourse is in most cases absolutely one of the reasons that members join. But since there are a lot better clubs to join, there's no reason for accredited investors to join angel groups unless they really want to invest [grin].
I mean, for all these reasons and more, most capable entrepreneurs wouldn't even acknowledge an angel outfit like USV as anything more than glorified bloggers/lookie-loos.
To be clear, USV is Union Square Ventures, one of the most respected professional venture capital firms in the country. They are not an angel group; Fred Wilson, a partner at USV, was simply writing an objective blog post about the Angelsoft platform...which he doesn't even use!
Why in the world would they take AngelSoft -- or any of your dubious peers -- any more seriously?
It's precisely because there are so many sites which purport to 'connect' entrepreneurs with investors that we have released Angelsoft 3.0. Now, for the first time, entrepreneurs (and everyone else) can look at real, live statistics on the system. They can see that over 11,000 accredited investors and venture capital firms are actively making use of the platform to review and collaborate on funding deals. That's why (we hope :-) they will take us seriously.
T. R. I hope this answers the points you've raised, but I'd be happy to continue the conversation either here in Fred's blog, or directly by email at david AT angelsoft.net. Thanks for raising taking the time to comment!
fredwilson
· 1 year ago
David, this is a full blown blog post. You should click the reblog link and post it to the angelsoft blog
Whoa. That's harsh and not accurate. Angelsoft is not an angel group. Its software built for angel groups.
Eben Thurston
· 1 year ago
TR, I can understand your frustration, but an investor's only objective is to return a profit. It's not philanthropy or gambling. Part of founding a new company or launching a product is picking a market appropriate to attract 3rd party investment if it's needed. Not every brilliant idea can become a company with the kind of growth potential required to warrant VC or angel backing, but there could very well be other sources of funding that are appropriate for your idea. Wealthy individuals with an interest in your space, government or state programs, university programs, etc. The problem might not be the idea, but the source of funding.
Nothing worth doing is easy.
innonate
· 1 year ago
TR,
As I've come to know a lot of VCs, I have to tell you: I haven't met one that doesn't want to make a lot of money or anyone who gets off from being selective for selectivity's sake.
Indeed, these two things are correlated.
Only 1% end up getting invested in because only 1% are really worth it.
Now, is the process 100% perfect? ABSOLUTELY NOT!
Part of that 1% is the wrong 1% and part of the 99% should have gotten invested in. This is where VCs win or lose. They won't win, however, from boosting the industry number above 1%. That's our job -- as entrepreneurs -- to do!
howardlindzon
· 1 year ago
you go girl
fredwilson
· 1 year ago
I am not proud of it. But that's the number for as long as I've been in vc (22 yrs and counting). During that period the vc industry has probably gone up 5-10x in terms of deals done each year. But obviously the number of entrepreneurs seeking capital has risen at the same rate. Not sure how to fix it. It might be a law of vc physics
evbart
· 1 year ago
Had to add my 2 cents to clear some things up.
When Jason said most angel networks are not for profit, thats true, because the entity itself is not investing. Angels join a network, so that the network can publicly accept submissions and screen deals. Sometimes they have a full time administrator to do this, and those costs are offset by submission fees and membership dues. The goal of the network is not to make money, it just provides a service to the investors that are members.
The investors themselves make decisions on what they want to invest in, and they are the ones that take the profits/losses, not the angel network entity.
Now these networks as well as all the other early stage investors on our platform take in a huge amount of dealflow, and most of it is not appropriate for their needs, aka. its not "fundable." The idea is too early, the idea is too late, its not in a sector that they have experience in, etc. When you take all these deals into account, then the 1% number isn't all that bad.
Here's the important part:
Angelsoft, is not an angel network, we are a software company. We provide deal tracking and collaboration software to help angel networks, seed funds, AND VCs to manage their investment process and to collaborate with other investors. These numbers we're collecting and making available are not measurements of Angelsoft'ts performance, they are industry stats on what users are doing on our platform.
That's what Fred is talking about in this blog post. Finally providing a way to publish stats on an industry that is typically very closed. Industry insiders like Fred may have a good idea of whats going on, but the rest of the world remains shut out. The more investors start using Angelsoft, the better the statistics, and the more insight the world has into the whole process.
In the end our investors and the entrepreneurs going through the process tend to think this is a better way to do things!
Thanks for the mention Fred.
DorianBenkoil
· 1 year ago
Imagine if someone could do this for private equity. Openness there would be unprecedented.
Don Jones - VentureDeal
· 1 year ago
Our database, VentureDeal.com, provides a fully automated XML feed of daily venture capital financing and M&A transactions throughout the US. These feeds are available as a WordPress plugin for blog owners or can be integrated into a non-WordPress site. You can see examples of it at www.xconomy.com/boston/
pstehlik
· 1 year ago
"For those that don't know Angelsoft is a free web service [...]" As far as I can see it is only free for the Investor-Side. If you are registering as an entrepreneur "Angelsoft charges a non-refundable $250 application fee for posting to the Investor Community."
Cheers, Philip
drstarcat
· 1 year ago
It's actually free for entrepreneurs to search for the right investment group and to apply using the common application. We only charge a fee if an entrepreneur wants to apply to the Investor Community, where investors themselves post deals that need some additional investors to close out a round.
Ryan Janssen COO, Angelsoft
Mo
· 1 year ago
Sorry Fred, this is juvenile and not going to add anything to the discussion but the first thing that I thought of when I read the first line was this: http://www.angelsoft.com/images/product_locator...
All Comments
Angelsoft is a big fan of transparency as well, and never before has anyone been able to offer so much insight into the early stage investor community. Not only are we doing this through our data, but also through the entrepreneur tools we’re providing. The entrepreneur angst is significantly reduced for those VCs and angel groups using Angelsoft because of transparancy.
Mark LaRosa
VP of Sales, Angelsoft
Fred I'm glad you are giving the right people props and attention.
I know it's meant to communicate the awesome selectivity, popularity, and ultra-focused diligence of the investor, but in reality, it makes their process seem wildly under-screened, signals a near-pathological fear of pulling the trigger, or puts the lie to the amount of capital genuinely available for new investments.
I mean, it's one thing being picky if you're KP or Benchmark or something, but if you style yourself an "angel" and you're passing on 99% of the ideas that find you, that's not a credibility builder.
And If you're an "angel coalition" and you're making more money off of reg fees for the 99% of ideas you pass on than the 1% you're backing, you're not in the investment business, you're in the scam business
From the perspective of an entrepreneur I can see how it feels that way. From the perspective of investors the reality is very different. When you are an investor, your goal is to put money to work. Everyone in the early-stage industry would love to fund more deals. To them that 1.3% doesn't represent how selective they are, it represents the number of fundable deals that come through the system. They would like nothing more than for that % to rise. The unfortunate truth is that most deals that are presented to investors aren't fundable. What raises an investor’s credibility is not how much they invest, but how much they return.
Angel Groups, or coalitions are you call them, do not make a profit. Almost all of them just break even. Submission fees help offset costs, and act as a decent filter against frivolous submission, which helps to raise that 1.3%.
Jason Schwartz
Entrepreneur Community Manager, Angelsoft.net
My guess, in fact, is that a full 100% of deals that come your way are, strictly speaking, "unfundable."
I mean, why would an entrepreneur with a demonstrably fundable idea go to some wannabe angel network for small change, especially when you're wasting 99% of your time saying "No Thanks" to the 99% of crap your nervous-nelly network of near-anonymous plungers has deemed "unfundable."
I mean, if you want to throw figures at me showing how you're investing millions and closing a dozen deals EVERY WEEK, then I might admit your method is interesting. Then I might admit your group isn't a bunch of total posers.
I mean, please do let me and everyone know if that's the case -- you'll likely see higher quality entrepeneurs try their luck with your screwball process!
But as it is, you're all talk, no walk.
For all the investors in your network, you don't represent real capital, you haven't proven investment acumen, you don't have impressive returns to show off, you don't have success stories you can point to. You even admit you barely expect to break even.
You're not investors, you're a social club.
I mean, for all these reasons and more, most capable entrepreneurs wouldn't even acknowledge an angel outfit like USV as anything more than glorified bloggers/lookie-loos.
Why in the world would they take AngelSoft -- or any of your dubious peers -- any more seriously?
Oh, I'm sure that more than 98.7% of the deals presented to you are "unfundable."
The essence of a free market economy is that sellers may offer anything they want for sale, at any price the feel is appropriate, and buyers may buy, or not, anything that is offered for sale at a price THEY feel is appropriate. In a free market with perfect information, if no buyer is willing to purchase something on offer, then by definition the price is "too high". The inverse is that if there are ready buyers but not enough product, someone will step in and offer products until the market clears.
Historically, the angel funding 'market' has been highly IMperfect. I've likened it to an investor and an entrepreneur running around a football field in the middle of the night wearing dark sunglasses and earmuffs trying to find each other. With Angelsoft, for the first time we have actually managed to create a more perfect market: there are over 11,000 accredited investors who are taking the time to participate in angel investment groups precisely because the WANT to invest. Why else would they be here? At the same time, with the Angelsoft 'Community' we have provided a way for an entrepreneur to place his or her plan, completely with summary, video, et al, directly in front of these investors.
Logic, and the theory of free market economics, say that if 11,000 willing buyers can look at the presentation of a plan and decide not to invest...yes, it probably IS "unfundable by objective, economically-motivated angel investors". (Note that it may still be fundable by friends and family members, or by strategic investors, all of whom are motivated by something other than pure, stand-alone risk/reward economics.) Bill Payne (one of the most respected angels in the country, and an Entrepreneur in Residence at the Kauffman Foundation for many years), has written a good post on what kind of things make a deal 'fundable'.
My guess, in fact, is that a full 100% of deals that come your way are, strictly speaking, "unfundable."
Not at all! I have personally invested so far in two deals that I found through the Angelsoft Community, and have brought half a dozen others in for screening to the angel group to which I belong.
One of the things that is not intuitive at all is how the economics of angel investing work. While most entrepreneurs wouldn't begrudge an investor an annualized return of, say, 25% on his or her invested capital, given the risk of early stage investment, the surprising, and probably terrifying, fact is that in order to achieve that kind of return, angels need to target getting back 30 times their money on each deal! While I'm sure that seems virtually sociopathic, I've written an explanation of angel economics that may prove helpful in understanding it.
I mean, why would an entrepreneur with a demonstrably fundable idea go to some wannabe angel network for small change, especially when you're wasting 99% of your time saying "No Thanks" to the 99% of crap your nervous-nelly network of near-anonymous plungers has deemed "unfundable."
It is a question of supply and demand, and what other options are available. If an entrepreneur can personally fund his or her idea, then there's no need to seek angel funding. Likewise if he or she has a well-heeled family or circle of friends who are willing to provide financing. But if the idea requires outside financing, things get quite a bit tougher. Banks are not in the risk-taking business, and will simply not provide startup financing. Venture capitalists fund an even smaller percentage of companies seeking funds (MUCH smaller: last year, VCs in the US funded about 1200 startup and early stage companies; angels funded about 50,000).
So the question of "demonstrably fundable" may not be quite as clear-cut as it may appear on the surface. If no professional (or semi-professional) investor, having seen the proposal, is willing to fund it, I think that in a free market one would then have a hard time describing the plan as "demonstrably fundable". I think it's pretty hard to describe investors as "nervous nellies" unless you compare them to something else. I'm assuming that you would not invest your own money in a "hot prospect" from Nigeria that arrived via email, so would that make you yourself a "nervous nelly", compared to someone who was naive enough to do so?
As for the "near-anonymous" comment, that is a function of each angel group. My own group, New York Angels, proudly lists our members on our website (including folks like Esther Dyson, Gideon Gartner, Josh Kopelman, and other well-known investors), as do many other groups.
I mean, if you want to throw figures at me showing how you're investing millions and closing a dozen deals EVERY WEEK, then I might admit your method is interesting. Then I might admit your group isn't a bunch of total posers.
I'm a little confused by this one. How on earth could anyone, angel or vc, possibly look at enough deals, or do enough careful due diligence, to close a dozen deals a week?? I don't know of anyone or any entity in the history of investing that has had that kind of bandwidth. Our own group, New York Angels, has invested about $35 million during the past six years, and closed about fifteen deals this past year. I, personally, have invested in over 70 startup companies so far. I think it would be pushing things to call us 'posers'.
I mean, please do let me and everyone know if that's the case -- you'll likely see higher quality entrepeneurs try their luck with your screwball process!
While I'd certainly agree that the process is far from perfect, calling it 'screwball' might be going a bit far. At Angelsoft we've tried to make it as streamlined and rational as we can. What suggestions would you have for us to improve it?
But as it is, you're all talk, no walk.
I think that's unfair. Simply looking at the stats shows that over 11,000 investors are participating and actively looking for investments, and have reviewed deals over 100,000 times. According to the most recent statistics from the Center for Venture Research, angels in the US last year invested $26 billion, into mostly early stage companies.
For all the investors in your network, you don't represent real capital, you haven't proven investment acumen, you don't have impressive returns to show off, you don't have success stories you can point to. You even admit you barely expect to break even.
It's important to remember, as others here have noted, that Angelsoft itself is not a network; we are simply a software platform that services networks of angels. But that said, given the numbers above, I think it's pretty clear that the 412 organized angel groups using Angelsoft clearly represent real capital. The metrics and risk of early stage investing are such that, as I previously noted, fully half of all investments fail. Nevertheless, according to a study released last year, angels investing through angel groups have been averaging a 27% internal rate of return on their investments. Compared to just about any other form of investment, including bank deposits, stocks and hedge funds, that's actually quite good. As for the 'break even' mention, I think that might be a misunderstanding of the context. Most angel groups are not-for-profit as a group, and operate at breakeven. Their goal, however, is to help their members make a profit on their investments, which, as the statistic above shows, they usually do.
You're not investors, you're a social club.
Again, Angelsoft is neither an investor itself, nor a group, we're simply a software company. But for the angel groups who use the platform, social discourse is in most cases absolutely one of the reasons that members join. But since there are a lot better clubs to join, there's no reason for accredited investors to join angel groups unless they really want to invest [grin].
I mean, for all these reasons and more, most capable entrepreneurs wouldn't even acknowledge an angel outfit like USV as anything more than glorified bloggers/lookie-loos.
To be clear, USV is Union Square Ventures, one of the most respected professional venture capital firms in the country. They are not an angel group; Fred Wilson, a partner at USV, was simply writing an objective blog post about the Angelsoft platform...which he doesn't even use!
Why in the world would they take AngelSoft -- or any of your dubious peers -- any more seriously?
It's precisely because there are so many sites which purport to 'connect' entrepreneurs with investors that we have released Angelsoft 3.0. Now, for the first time, entrepreneurs (and everyone else) can look at real, live statistics on the system. They can see that over 11,000 accredited investors and venture capital firms are actively making use of the platform to review and collaborate on funding deals. That's why (we hope :-) they will take us seriously.
T. R. I hope this answers the points you've raised, but I'd be happy to continue the conversation either here in Fred's blog, or directly by email at david AT angelsoft.net. Thanks for raising taking the time to comment!
http://blog.angelsoft.net/2008/09/06/response-t...
Nothing worth doing is easy.
As I've come to know a lot of VCs, I have to tell you: I haven't met one that doesn't want to make a lot of money or anyone who gets off from being selective for selectivity's sake.
Indeed, these two things are correlated.
Only 1% end up getting invested in because only 1% are really worth it.
Now, is the process 100% perfect? ABSOLUTELY NOT!
Part of that 1% is the wrong 1% and part of the 99% should have gotten invested in. This is where VCs win or lose. They won't win, however, from boosting the industry number above 1%. That's our job -- as entrepreneurs -- to do!
When Jason said most angel networks are not for profit, thats true, because the entity itself is not investing. Angels join a network, so that the network can publicly accept submissions and screen deals. Sometimes they have a full time administrator to do this, and those costs are offset by submission fees and membership dues. The goal of the network is not to make money, it just provides a service to the investors that are members.
The investors themselves make decisions on what they want to invest in, and they are the ones that take the profits/losses, not the angel network entity.
Now these networks as well as all the other early stage investors on our platform take in a huge amount of dealflow, and most of it is not appropriate for their needs, aka. its not "fundable." The idea is too early, the idea is too late, its not in a sector that they have experience in, etc. When you take all these deals into account, then the 1% number isn't all that bad.
Here's the important part:
Angelsoft, is not an angel network, we are a software company. We provide deal tracking and collaboration software to help angel networks, seed funds, AND VCs to manage their investment process and to collaborate with other investors. These numbers we're collecting and making available are not measurements of Angelsoft'ts performance, they are industry stats on what users are doing on our platform.
That's what Fred is talking about in this blog post. Finally providing a way to publish stats on an industry that is typically very closed. Industry insiders like Fred may have a good idea of whats going on, but the rest of the world remains shut out. The more investors start using Angelsoft, the better the statistics, and the more insight the world has into the whole process.
In the end our investors and the entrepreneurs going through the process tend to think this is a better way to do things!
Thanks for the mention Fred.
As far as I can see it is only free for the Investor-Side. If you are registering as an entrepreneur "Angelsoft charges a non-refundable $250 application fee for posting to the Investor Community."
Cheers,
Philip
Ryan Janssen
COO, Angelsoft
:)
still, it's a great name for them.