Last year a website community called Angellist launched, helping match start-ups with interested angel investors and the site has gotten more popular as start-ups are closing anywhere from $50k to $3MM in funding. The bar is set high for getting an Angellist recommendation which helps investors feel comfortable if they are reviewing a start-up that has been “vetted” by the guys running the site.
For the most part this has been a great way to help start-ups get off the ground and investors quickly find opportunities for investing they might not have normally found. But (wait for it) Angellist has become yet another venue of judgement of the “cool kids.” The level of traction needed to get an Angellist recommendation has become so high that if you simply did all the things needed to prove your start-up is fundable, you would get noticed and funded by someone in real life.
After careful thinking and many conversations with our advisor (who is a HUGE supporter of Angellist and closed $1MM in funding by using the service) I decided to pull all our information off of Angellist and here’s why:
1) Investors didn’t like us visible
All three of our current investors were not on Angellist when we closed them for funding and all of them are passionate about our team and what we are doing. Having a profile with our pitchdeck, video, and detailed financials for the world to see didn’t exactly warm their hearts in fact it did the opposite “How much money do you need? Why are you still on Angellist?” A true investor should want the team to focus on product and part of investing is the feeling like you are part of something special.
Would you want your girlfriend to have an active profile on Match.com?
2) Anyone that “needs” you to be on Angellist won’t fund you
There are many Angels who have a whole set of requirements about company status, public persona etc. I’ve had several Angels tell me that if we got on Angellist they would actively help us with funding or intros. Guess what, never happened. It’s easy to get distracted and jumping through all the hoops of what “needs” to happen for funding but its rather simple: build the company, money follows.
3) There are trolls
Angellist has grown so much that nearly anyone can sign up and be either a start-up or investor. There are people on there I personally know do not have a dime, either because they’ve already invested for the year or lost on previous investments; yet their profile makes it appear as though they are an open and active investor. There are also analysts from big VC firms on there scanning around and looking at start-ups for counter intelligence.
When you look at the ROI of posting crucial business information for the *possibility* of getting some funding the risk is too high. You end up becoming a sitting duck for competitors or companies that can pivot into your roadmap and while there is a whole ecosystem developing around start-ups that tell you what you should and should not do I’d almost recommend in every case to go against the pack.
Diversification is often what allows one species to live while another dies out. If the chances of survival and funding are already low, why would you want to join a pack of thirsty wolves in the desert?
For us we decided it wasn’t just about being scared to reveal information or conforming to a particular process, we just decided to keep our nose to the grind and not have the hassle of updating or worrying about yet another social media profile.
Plus now we don’t look like funding sluts. Back to work.
(This article is part of a series by our resident SocialTimes entrepreneur, Ellie Cachette. Cachette is the founder of ConsumerBell and also writes on topics covering Consumer Web. For more articles by Ellie, click here )