AngelList: The Best Thing for Startups Since…the Internet

AngelList is essentially a public market for private, early-stage tech stocks––without actually being a transaction processor. It is the single most important innovation in venture capital in the last 5 years.

My startup, SpeakerText, raised $600k and 90% of our investors came through AngelList, including our lead investor, the Silicon Valley legend Mitch Kapor.

Imagine if Evan Williams (founder of Twitter) designed a NASDAQ competitor just for web startups, minus any govt regulation. What would it do? How would it work?

Lots of Investors: AngelList has something close to 700 1,200 angel investors signed up so far. These are not random people. Literally, it’s all the top people you’ve heard of, plus a ton you haven’t. But most of them are really, really good.

Structured Pitches: AngelList pitches are not a free-for-all. The submission format forces entrepreneurs to get to the point and allows for only a short list of fields: Product, Traction, Team, and Social Proof.

Frictionless Intros: Investors who see a startup’s pitch can get intro’d to the startup with a single click. Investors can also “vote” for startups they like (typically after they’ve heard the pitch in person), and declare if/when they’ve actually invested. (Yes, it really is that baller.)

Social Dealflow: Investors are encouraged to connect with and follow each other, a la Twitter. Each time an investor asks for an intro, votes or invests in a startup, it goes into the activity stream of that investor and everyone who follows him/her. This makes it easy for investments to “go viral.”

Limited Curation: Babak Nivi, Naval Ravikant and Brendan Baker actually pick out what they think are the best startups and blast them out to investors via email. This is hugely effective, and great for the startups that make it into their email blasts.

Honestly, in my view, AngelList is the best thing to happen to startups since…the internet. The guys who run it are awesome, accesible and no-bullshit. The community is excellent. The money is real.

With all that said, I have one feature request:

Investor Rating System: Not all investors are the same. TheFunded tried to do this in a half-ass sort of way, but given AngelList’s transparency, I think it’s the perfect venue for entrepreneurs to rate investors and offer feedback. Markets work best, after all, when everyone is operating with “the shadow of the future” in their mind

8 Comments

  1. Chris Wake February 18, 2011 at 7:34 pm #

    “Yes, it really is that baller.” – Amen.

  2. Mark Birch February 18, 2011 at 5:28 pm #

    First off, congrats on closing the round! It is encouraging to see things going well for you and the SpeakerText team.

    Good post and analysis of AngelList. As an investor, I agree that it is a profound change in generating deal flow and disruptive to much of what has caused unnecessary friction in introduction between investors and entrepreneurs.

    Just a word of caution however, while the AngelList team does a good job of vetting start-ups and does their best to generate visibility, start-ups need to make sure they position themselves well. There is a powerful social proof mechanism built in that creates something of a game dynamic when it comes to positioning a deal. I have seen many decent deals quickly drop off the radar while some get quickly over-subscribed.

  3. Mark Essel February 18, 2011 at 4:35 pm #

    Put in this light, the AngelList is a must have channel and utility for any founder. Thanks Matt, glad SpeakerText’s funding went smoothly.

    Nice blog overhaul, glad to see you iterating on designs. The background texture effect is sweet. About & Contact tabs look like they’re hugging right, not sure if that’s intended.

  4. Feivi February 18, 2011 at 10:10 am #

    AngelList is cool, but it would seem that once again, only those with an “in” can really make it. Take an example a pre-launch company with no connections in Silicon Valley; they will by definition have no traction and no social proof, and are possibly doomed, no matter how good the product. A system has to be invented whereby those with no connection can get heard…

  5. Jon Callaghan February 17, 2011 at 6:07 am #

    Congrats Matt! Agreed that AngelList is democratizing angel financing.

  6. Josh Morgan February 17, 2011 at 4:50 am #

    This is pretty cool, Matt. Congrats and best of luck!

Trackbacks/Pingbacks

  1. Tweets that mention AngelList: The Best Thing for Startups Since…the Internet | The Metamorphosis AngelList: The Best Thing for Startups Since…the Internet | Becoming an Entrepreneur, by Matt Mireles -- Topsy.com - February 18, 2011

    […] This post was mentioned on Twitter by Matt Mireles, brendanbaker. brendanbaker said: This is such a wicked review of @angellist by @mattmireles: http://bit.ly/dETjIx. Course, startups like @speakertext make it easy… […]

  2. Tweets that mention AngelList: The Best Thing for Startups Since…the Internet | The Metamorphosis AngelList: The Best Thing for Startups Since…the Internet | Becoming an Entrepreneur, by Matt Mireles -- Topsy.com - February 16, 2011

    […] This post was mentioned on Twitter by Matt Mireles, Sameer Guglani. Sameer Guglani said: RT @mattmireles: "Yes, it really is that baller." <–@angellist http://bit.ly/haxTyL […]

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