I read an excellent post on Boost Innovation on how to use the Angel list to raise money if you’re a startup. Here is some practical, hands on advice from an entrepreneurs who did it himself. Matt Thazhom, CEO of PowerInbox
BI: How long did it take to raise your seed round?
MT: We got our first commitment within a week of posting on AngelList. It then took about 3 months to get to our first closing.
BI: How many folks participated in it?
MT: 27 (a few VCs and a number of angels)
BI: How did you generate interest on AngelList?
MT: A great referral – Rob Scoble did a video on us at his home. Afterwards he offered to refer us on AngelList.
If you have any activity on AL, they send out an update on you at the end of the week. Update your profile every Thursday so you show up in the update emails. When an investor wired in the funds, we immediately added them to our AL profile because AL sends out an email to all followers of that investors so its a way to get exposure in between the weekly update emails.
BI: Did you have a specific strategy for approaching investors on AngelList?
MT: For the first closing, our goal was to have the bulk of the funds from VCs because it’s easier to get Angels to fill out the round if you have VCs. And, if you have agreed on terms with your lead VC, then there is no back and forth when an Angel comes on board.
Once the VCs were on board, they recommended us to angels in their network.
For the second closing, our goal was to have as many Boston angels in the round as possible. The reason was that we had just moved to Boston wanted to build as much local support as possible. So I used AngelList’s investor search (http://angel.co/people) to find the most active Boston based angels.
AngelList has a great profile page for each investor (http://angel.co/jfagnan) with links to Linkedin, Twitter etc. I used those to figure out who in my network knew the angels I wanted intros to. I then broke the list into manageable chunks and reached out.
BI: What advice would you offer other entrepreneurs, tips, tricks?
MT: What worked for me is to find a problem that I had to fix because it bothered me everyday. Startups fail because they give up or run out of money. These days it’s usually reason #1. But if you are building something that you want to use everyday, it makes it harder to give up.
When I quit to start PowerInbox, my wife was pregnant with our baby. I then spent 18 months without any income building the team and product before we got funding. What kept me going was how much I hated the email status quo. Apps in all email is something I want to use as a consumer.
BI: If you had to go back what would you have done differently?
MT: I would get the MVP done as quickly as possible and then head straight to AngelList
Full article here: http://bostinnovation.com/2011/10/19/qa-with-ceo-of-powerinbox-what-i-learned-from-angellist-startup-tips-tricks/
Thanks to @larshindrics who first alerted my attention to the article.