"A related red flag is asking me a question or mentioning something that I've obviously addressed in a blog post."
This is a red flag for me from the other side. It comes off as out-of-touch to assume that because I want investment from you I will read through your entire blog. I'm sure there's quality information there but reading every post is not a high-value thing to do with my time as an entrepreneur.
Who said anything about reading every post? There is a search box. If you are asking a specific question to me I would expect at least a cursory search to see if I have written on that topic.
I appreciate this may be the way the author likes it, but I wonder if they realize quite how asymmetric this is:
Don't make me leave my mail client, don't send me long emails, don't make me work to find your Twitter/LinkedIn, don't message me if you're not my target demographic BUT don't get someone to make an introduction for you, make sure you've got your MVP demo-able, make sure you've read everything in my blog (and from the comments here, don't ask questions and expect a personal answer).
Given the primary thing you want from an angel is time (which is another way of saying that the most valuable trait of an angel is their experience), this seems like an odd way to market oneself.
It's a bit more subtle than that. I have time for people past this initial stage, and lots of time for angel investments. But I don't have time to engage fully with everyone who emails me. I simply get too much email and have too much to do for that to work out mathematically.
So these tips are more about getting noticed. It's really just advice. If you don't do them will you be completely thrown out? No. I read pretty much everything and give it serious thought. But if you don't do them you're not putting your best foot forward.
I also don't think I'm alone here, though I'm of course not speaking for anyone but myself. I suspect that if you did all these things you'd have a much higher conversion ratio, which ultimately will just save you a tremendous amount of time.
An angel is looking for people with hustle. Someone with hustle will find a way to email me. Not blast me on twitter (along with 35 other people all at the same time.)
"Make sure you have a working demo" is a pretty reasonable cutoff, don't you think?
As a known angel, you get inundated with requests; you have to develop a bunch of quick ways to throw out the majority of incoming traffic or you drown.
None of them seem unreasonable. My point was rather than the only thing the angel has going for them is the value of their time--the value of their money is identical across angels. To stress how little of this time is available ("don't send me long emails") to founders off the bat seems, to me, to be an undesirable quality I would want to hide from founders.
I think "don't send me long emails" is shorthand for "communicate clearly and crisply" - lots of people ramble and I can't be bothered to pick out the one important detail.
The relationship is asymmetric though. If you're looking to raise money then you're a salesperson for your startup, selling the idea of whatever you're building to the investor in the hopes that they buy in with their cash and/or time. As a salesperson, you need to converse with the prospect in the manner that is going to win the prospect over. Most prospects don't give you a wonderful list like this with "key tips on how to increase your odds of winning a sale with me".
If I'm cold calling someone for money and mentorship I feel like the pressure should be on me, honestly. At this point I'm the only one with something to prove, the angel has the luxury of being as picky as he or she wants to be.
I disagree. Investment is a two way street. Angels benefit from deal flow as well so making themselves unavailable does seem odd. If they want to invest in early stage ventures but don't have the time there are plenty of other vehicles to put their money in without being bothered
WakeMate had a disastrous launch where some of their USB chargers lit on fire. I think Gabriel doesn't want to deal with/feel he can help startups with these sort of problems that only come up when you're making a physical product.
I have found that people are far more responsive on twitter, but the follow up email (after you have their attention) really needs to be special and RELEVANT.
Often this is a numbers game. Try lots of investors as each are at different stages (some have the readies, some may not be interested in your sector, etc)
I love this list by Gabriel. I've seen everyone of those mistakes by my startup friends or myself when we were younger.
I just wish he accepted Canadians in his investment pool. Not that I'm even looking for investment or anything, but if I was I'd be nice having someone that actually gets machine learning and big data from the ground level.
It's worth a valuation significantly less (say half to a third) since the insights he would give and the types of connections he would have (and knowing the difference between which of whom to introduce since he gets the space) would be phenomenal.
It can be really simple. Ex 1: I see you invested in X, which is similar to what I'm doing for this reason, and so I'd love to get your insight. Ex 2: I read your post on X; we're having this issue now and I'd love to get your insight on this piece. Ex 3: Given your experience running X, I think you could help us with Y.
It doesn't have to be long or superficial, though that pre-supposes you do sincerely need help with Y. If you're just looking for money, then that may not be the case. But in that situation, I'm probably not the right angel investor.
It's a decent list, however, it's a red flag if my Twitter account isn't up to date and or if it's non-existent?
Better spec that I own an iPhone and use Foursquare while you're making a list of obnoxious requirements. Uh oh, I don't even have a Pinterest account yet!
The proper response to an angel that red flags on something like that is: sorry, I'm too busy doing actual work to worry about whether my Twitter account is existent and up-to-date, I'm going to pass on allowing you to invest into my company.
For the record, I don't own an iPhone and don't have a Pinterest account either (though I'm guessing you were being snarky there). However, at the seed stage you're investing in people and a quick way to start finding out about people is through their online profiles. So no, you don't need those things, but it makes it quicker to learn about you. Also, on a higher level, if you're doing an Internet startup I would expect you would be trying out and engaging in various Internet services. If not Twitter, than something. That said, and as I linked to in the post (http://www.gabrielweinberg.com/blog/2010/10/pitch-decks-are-...), I think conveying personal history in one way or another is very important.
There's a big difference as a developer, between knowing all about Twitter, it's platform and APIs, having used Twitter accounts enough --- and worrying about whether I've got my personal Twitter account up-to-date.
I don't have the time to tweet several dozen times per day (what it would really take to learn anything meaningful about me @140 characters a shot). Period. It's not worth the time trade. Should I be tweeting so I can have a couple thousand followers (half of which are literally worthless)? Or should I be throwing that hour a day into my business?
I could give you a simple bio that would be far more concise and useful than what you could possibly extract from Twitter postings. And, you don't like wasting your time either: if you have to scan my Twitter posts to compile a picture of me, you're going to waste a huge amount of time I could save you with that simple bio.
I agree with your sentiments, but here's the difference: you could write anything in a bio. And in a CV. That's why socially verifiable information is always preferred.
When trying to get an idea of what someone is like, flicking through their Twitter / LinkedIn / HN posts is far more informative and reliable (and quicker) than reading a bunch of prose they wrote about themselves.
Obviously you could write anything on a Twitter feed. People embellish the hell out of their LinkedIn profiles, just like they might a resume.
I don't believe Twitter qualifies as a valuable form of due diligence for an investor. Should Zuckerberg be worried about what Wall Street thinks of his Twitter account? One post in three years probably implies he just isn't with the times.
You know what's a lot more reliable than me tweeting about Whitney Houston's death? The product I create and show you. Brass tacks. The rest is a superficial sideshow.
Are you equating a cold-calling investment prospect with Mark Zuckerberg?
I don't believe Twitter qualifies as a valuable form of due diligence for an investor
No disrespect, but you're belief is incorrect. Anything and everything about you online is used when doing DD. Of course, if your product is fucking awesome, then the fact that your Twitter stream is empty is irrelevant. But if your product is fucking awesome, you aren't cold-calling VCs. VCs are cold-calling you.
>"Anything and everything about you online is used when doing DD."
Having what, for all intents and purposes, is an employer judge - or worse yet misjudge- me based on my interests, or the articles I read is precisely the reason I'm moving away the merger of my online/offline lives. I recently put my money where my mouth is and deleted my Facebook account.
>"However, at the seed stage you're investing in people"
This always sounds like horseshit to me. Can some one point to some good examples where this model has been truly successful? Why aren't VCs actively recruiting college campuses, then? It seems like you're missing out on a huge chunk of great candidates if you're always selecting "people" from a small subset who are seeking funding for their (possibly terrible) technology startup.
To see some good examples where this model has been truly successful, see every successful VC fund and accelerator (especially YC), ever. Also, I totally agree re prospective employers, from an employee's POV. But don't make the mistake of conflating Investors with Employers. The two are very different beasts, looking for very different attributes.
>"To see some good examples where this model has been truly successful, see every successful VC fund and accelerator (especially YC), ever"
I don't know everything about these incubators, but are you telling me that these guys and gals apply and get into the programs without an idea for a startup? That isn't how I thought it worked. I think that's how people like to think or claim it works. But I'm not sure it's the reality.
And, if I tried hard, I could probably come up with an example or two where the opposite happened: VCs banked on the talent behind a company with a not-so-good idea, and it "failed".
I'm using the Zuckerberg reference to point out what a joke the notion of Twitter as a due diligence source is. Wall Street has to perform MASSIVE due diligence on Facebook, likely the single greatest due diligence run in world history - and they're sure as hell not concerned about Zuck's Twitter account in that process.
I don't see anything that indicates my belief is incorrect. Quite the opposite, I'm living proof that I'm right.
My Twitter account doesn't have a single post on it. I deleted the 20 or 30 tweets it used to have dating back several years. My Facebook account is completely private. My LinkedIn account lists only my current project.
I raised the seed round for my latest venture, from a world class investor (a top 50 investor in the US tech market), with a demonstrated product, and absolutely nothing else. My product was solid, but not "fucking awesome" - it was good enough to prove I could execute the rest of the plan. It took about two months to build, and a net cost basis of maybe $50 if you proportion out the real infrastructure expense. The bottom line: I sold the investor on what I was going to do, how I was going to do it, and I had a good enough product to demonstrate credibility.
Down-vote opinions you disagree with? Don't misrepresent my statements in an attempt to exaggerate their absurdity.
Obviously, Wall Street !== Angels, ergo IPO !== seed stage.
There's no doubt there are edge cases. But the point I was trying to make was that investors are interested, above all, in people. The fact that you managed to raise a seed round in the absence of traction or a polished product is evidence of this very point. I'd love to hear from your investor as to why he invested in you. I'm willing to bet you are the single biggest reason.
I think people in this thread are reading too much into his list of requirements. He's telling you some of the details you can get right that will help him to decide to invest in you, and you're taking them literally. I don't use twitter, but I don't think he'd hold it against me if I were asking for his investment. He just wants an easy way to look at my online presence, so something like a blog/stackoverflow/HN account/github/Facebook would be helpful too.
"A related red flag is asking me a question or mentioning something that I've obviously addressed in a blog post."
This is a red flag for me from the other side. It comes off as out-of-touch to assume that because I want investment from you I will read through your entire blog. I'm sure there's quality information there but reading every post is not a high-value thing to do with my time as an entrepreneur.