Angel List Review:
What is Angel List and How does it Work?
Background on Angel List:
Angel List is a network and a marketplace for both startups and investors to meet. Angel List has hundreds of thousands of users on both ends. This includes people searching for jobs, startups trying to raise money or get capital, and investors who are trying to find the next big thing.
Angel List offers a huge network for the startup community. Because of the JOBS Act and what it has done for startups and the startup community, Angel List has gained hundreds of thousands of users on their site.
The jobs portal they offer is unparalleled. You've got companies who are literally hiring the next awesome hacker/hustler/designer through Angel List. It's a prolific platform that gives opportunity to find somebody who's awesome to join your team. It's much better than trying to source somebody through LinkedIn where you hope to find somebody. It's less about resumes and more about what you've actually done.
It provides great rankings. Let's say, for example, you went to Cornell, and you want to find the other Cornellians who have started companies. By having that connection in common, they might be more likely to invest in you in your Cornell-based startup. You can go through each of them and find out who's connected to them and reach out to them. Those are positives.
Angel List needs to do a better job of distinguishing those startups that are raising online or offline. Too many startups are raising offline. I've received email alerts from Angel List about a trending startup and it says they are raising offline. It says that an old school VC network is raising money for them, but there is no way to connect with them. I think that Angel List needs to do a better job of distinguishing those startups that are raising online or offline.
Second thing is I still get a sense that, although it's becoming a little better, their syndicates are sort of the old boys club. It seems like they are primarily showing or providing access to the startups that aren't the best. These are startups that maybe the syndicates couldn't raise money through due diligence of real venture capital firms like Angel Kings, and they just want to fill up the round through some money they find online. I don't think that's the right approach. Give the people that support you through your writings, your blogs, your content, the same opportunities. Bring the best deals to the table. Don't selectively choose some, and put the below par startups online.
Finally, the 5% fee can be prohibitive. Think about it. If they're a marketplace that connects the startups and investors, which ultimately becomes more of a credit card transaction process in which fees, by the way, are about 3%. In other words, Angel List gives you the opportunity to invest in startups. When you invest online, you submit money through their site for which they actually get a carrier fee just for providing you with the opportunity to invest. I think eventually this will be reduced because of the competition from sites like We Funder, Funders Club, through people finding us at Angel Kings.
Here's a video on how Angel List works:
THE VERDICT ON ANGEL LIST:
Angel List is a great site, and I have total admiration and respect for what Naval's done. In fact, I've communicated with many of the syndicate leads, and I enjoy using the platform. However, they need to do a better job of leveling the playing field. If you're a syndicate raising, and you're a popular syndicate with all this money, stop bringing the less than crappy deals to the table. Bring the best; treat everybody on Angel List the same way. You never know who you might find but just isn't part of that old boy's network. Let's democratize, let's bring more women to the platform. Overall, I would use this site, however, they've got to improve it before more competition eats them up.