Online Tools for Real-Life Funding: Investing Sites
As if LinkedIn, Twitter, Facebook, your website, and your community campaigning weren’t enough exposure to alert the community and potential investors that you’re looking to raise capital, you can post your company on online investor platforms such as Gust and AngelList.
Gust and AngelList are social media sites that allow you to share the details of your fundraising platform. This focus is different from mainstream social media. On mainstream social media sites such as LinkedIn, your goal is to create a persona for yourself and for your company.
In contrast, your Gust or AngelList profile is a place to openly share your current fundraising needs, past raises, and past investors (at least those who are also on the site).
Although these platforms have a crowdfunding element, they’re not crowdfunding platforms per se. Whereas crowdfunding platforms expect you to raise funds directly online, Gust and AngelList encourage you to take the conversation and the investment offline into the real world.
Using investor sites like Gust and AngelList is an efficient way to announce your intention to raise capital. New sites are popping up almost daily, in which you can create an extensive profile for your company that includes details about your investment deal as well as all the basic information about your company. Investors all over the world will have access to your profile and will be able to contact you to request more information.
Gust is a powerful tool for angels to collaborate and syndicate on deals. You can create a profile on Gust and then submit that profile to angel groups who have accounts with Gust. These groups will then either invite you to pitch with their group or ask for more information.
Gust charges investors a fee, so they don’t tend to use the platform as individuals. Instead, angel group administrators manage Gust accounts. They use the service to vet, share, and accept applications based on the group’s unique requirements.
Here are some other highlights about Gust:
It’s a powerful tool you can use to connect with angel groups.
Its collaborative features allow angels to perform due diligence more quickly.
Investors can share deals with other groups, helping you close your round faster.
Your profile becomes a standard 2-page executive summary that you can print and share with investors in person.
It’s free to entrepreneurs.
AngelList is an online platform for start-ups to connect with investors, mentors, and employees. You can sort by location, market, product, and jobs. AngelList uncovers the otherwise secret world of start-up investing. All you need is a login and a password. AngelList is free to both entrepreneurs and angel investors.
Here are some things AngelList lets you do:
Identify the big investors in your region or industry
Vet investors based on their experience or reviews
Identify companies in your space
Find mentors, advisors, and employees
Learn how to create a profile from other successful companies
Stay informed about the news in the nationwide start-up world
We’ve found that the best way for investors to understand investment deals is to see a whole lot of them. Entrepreneurs can do a similar exercise with AngelList. Find 20 random investors, read their profiles, and write down your observations.
You’ll begin to see patterns. How much do they invest per year, and how are the funds distributed? Do they invest alongside other specific investors? What are they looking for? Does their portfolio reflect what they claim to be looking for? And so on.
Sign up for both Gust and AngelList
When you want to raise money, you should probably use both Gust and AngelList. Why? Because each platform has different investors, and you don’t want to ignore either group. Be sure to keep your eyes open for new sites to list on as well, because raising venture capital is a rapidly changing area on the web. Basically, angels fall into one of three basic types: visible angels, angels who invest in organized groups, and invisible angels:
Visible angels: Some angels are very experienced and totally immersed in the start-up world. Consider investors in this group visible angels because they tend to be visible in the community, either because of their investments or because they are founders of successful ventures. They partner with other visible angels and invest based on referrals from one another.
Angels in groups: An angel group is a club or entity that handles the sourcing and vetting of deals. An administrator facilitates meetings and sometimes does the legal work of putting the deals together. Angels who prefer angel groups are often less visible than the visible angels. By joining an investment group, investors can get good deal flow (which requires a certain public visibility) but retain anonymity.
Invisible angels: Occasionally, companies work with individual angels who single-handedly provide the whole seed round for a company. These angels prefer to invest alone, quietly, and without fanfare, working under the radar. The best way to find them is to get the word out that you are raising money and hope they come to you.
When you submit an application through Gust, you’ll connect with angel investors who have affiliated into angel groups. In many cases, Gust is the only way to submit your application, as is the case with Robin Hood Ventures, an angel investing group based in Pennsylvania. Gust applications can be made visible to the public (with financial info omitted).
AngelList, on the other hand, connects entrepreneurs with visible angels. The profile you create on AngelList is public, and anyone (investor, entrepreneur, or lurker) with an AngelList login can see your deal. This visibility could attract invisible angels who tend to lurk around looking for deals. Most likely, your audience is made up of visible angels who use AngelList to keep track of the start-up community.