Angelsoft Blog

In this release we are welcoming VCs into the Angelsoft network, with a few new features that will make life a lot easier for them. But angels too have a lot to be excited about: We've improved some key areas of the program, including adding new deals, customizing industries, and inviting entrepreneurs to collaborate.

All in all we've had 317 updates, among them 194 were general bug fixes, 4 were new features, and 29 were smaller improvements. You can see all of them here. The highlights are below:

NEW VC FEATURES

For our venture capital users, these power features could help streamline the process:

• Submit Directly to a Partner - You can now require the entrepreneur to select one of your fund's partners, who will automatically be notified and become deal lead.
  
  
• Track Deal Status - Deal Status notes, always at the top of the deal dashboard, are a new way to track the status of each deal. Only deal leads and admins may create them.
  
  
• Printed Progress Report - From the Deal List, select any number of deals and click Actions -> Print Weekly Report. You will get a printed version of a report containing all the deals, their last Status Note, 3 last activity feed items, and general information about the deal, its stage, the deal lead, etc.

NEW ANGEL FEATURES

• Quickly Adding Deals - Investors and Administrators can now quickly create a deal without going through the full application form. Create New Deal will open a dialog where you can add a deal by merely its name, or add the entrepreneur information and invite them to collaborate!

• Smart Email Drop-box - Emailing-in deals just got smarter. You or your members may add a Deal Lead directly from the email by adding ::lead@email.com to the subject line - which will give that user admin privilege and Deal Lead status.
  
  
• Better Industries - We've added some default industries to our list, including Clean Technology, Education, Gaming, Internet/Web Services, Mobile, and Nanotechnology.

• Custom Industries - We're allowing you to create custom industries for your group.

• Administrator Unsubscribe - Administrators can now unsubscribe from deal messages if they have no interest in them. Simply go to your Profile, and click Edit Preferences, then uncheck All Deal Emails.
  
  
• Invite Entrepreneur Template - When inviting an entrepreneur to fill out the application, you can now use a saved template that you can change under Group Preferences.

Whether VC or Angel Investor, your feedback is very important to us. So please let us know what you think! Requests, suggestions, or questions are all welcome.  Simply comment below.


–The Angelsoft Team

Recently, Scott Shane, a very smart and decent guy who is a professor of Entrepreneurial Studies at Case Western Reserve, has been highly visible around the web blogging and commentating in support of his recently published book, Fool’s Gold: The Truth Behind Angel Investing in America.

His main thesis is that ‘people’ have a very misleading view of that rare creature known as an “angel investor”, and that angels are far less numerous, generous, and active than ‘everyone’ thinks. In support of this he has extensively research the subject, pulling together all of the available statistics on the field, from the Angel Capital Association, the Center for Venture Research, and even us at Angelsoft (which we’ve been happy to provide.)

As I read his book, and many of his subsequent blog postings and commentaries, I am alternately baffled, bothered and bewildered by his conclusions. First, let me say that his research is legitimate and (as far as anyone, including me, can tell) accurate. So I am not disputing his facts. What I object to, however, is that he sets up straw men to demolish, in order to make lurid points that I believe lead his readers to draw inaccurate conclusions on the state of angel investing.

Take, for example, his contention that angels in America invested “only” as much money last year as venture capital firms. Is the fact of “angel investments = vc investments” accurate? Yes (to the best of our knowledge.) But phrasing it as “only as much” somehow implies that someone is maintaining it is much more. Hunh?

What we and the facts all agree on, is that LAST YEAR ANGELS INVESTED $26 BILLION IN US COMPANIES!! Who on earth is claiming it is anything higher than that??

Meanwhile, in a recent blog post on Small Business Trends, Scott opines that so-called “active investors” are a myth, because even among the cream-of-the-crop angels, the self-reported average time they spend with their portfolio companies is a miniscule 41.9 minutes a week [gasp!] Once again, I can confirm his facts, but substantively disagree with his conclusions!

I’m one of his “cream of the crop” active angel investors. I’m the Chairman of New York Angels (one of the largest and most active angel groups in the country, with 22 deals this year alone), have 70+ companies in my personal portfolio, and spend my full business time on angel-related activities. That said, it would be absolutely correct to say that there are some (indeed, many) ventures in which I have invested on which I spend less than 41.9 minutes per week. And the problem with that is??

I’m not running the business, the entrepreneur is! The last thing he or she wants is me looking over his or her shoulder and micro-managing the company. If that’s what I need to do, then I shouldn’t have invested in this venture in the first place.

Think about it this way: if, after pulling together an investment round of half a million dollars for a company (including corralling the investors, structuring the deal terms, and doing due diligence analysis, all for no compensation, and then investing $100,000 of my own money), I followed through by serving on the company’s Board of Directors (which would be active involvement indeed), kept updated by asking for and reading weekly management reports (which is way more than most CEOs want to provide), referred the CEO to a dozen high-level sales and business development prospects from my network during the year, and then introduced them to five top-tier venture capital firms for potential participation in a follow-on investment round…would that be the kind of “active” angel investor you’d like to have?

I think the answer from any entrepreneur I’ve ever met would be “yes, in a heartbeat!”

Now, let’s look at my time involvement post closing:

 

• Bi-monthly, three-hour, in-person, board meetings = 18 hours
• Reading weekly reports for 15 minutes (except Christmas week, at 4 minutes) = 12.8 hours
• A dozen sales/biz-dev referrals, taking me 15 minutes each = 3 hours
• Five VC phone introductions with follow up emails, half an hour each: = 2.5 hours

 

Total time spent annually = 36.3 hours

Total time spent weekly per venture = 41.9 minutes

And this somehow proves that “active angel investors” are a myth? I’m confused…

You can create a deal in your Angelsoft group by sending or forwarding an email to your drop-box email (newsubmissions@YourGroupsName.angelgroups.net ).
Remember these simple rules to maximize your use of the drop-box email:

• The subject of the message will become the deal's name

• You can add ::email@address.com to the subject, to make that person a Deal Lead.

• For instance, Acme Explosives::don@mygroupsemail.com will become the deal Acme Explosives, and Don will become the Deal Lead.

• You can add attachments up to 10MB. They will be added to the Document Vault.

• The body of the message will be posted under Deal Messages.

We hope this will speed things up, and allow you to send in existing conversations, and start the collaboration on Angelsoft!

At Angelsoft we spend most of our time making sure we are doing everything possible to build tools that serve both Entrepreneurs and Investors.  It's a tough balancing act because the needs of both often conflict.  The one thing I've heard most from entrepreneurs lately is that they need the plans submitted to the Investor Community to be better promoted to our 15,000 investors.

We took steps to help them out which resulted in a doubling of the number of views that Investor Community submissions receive.   The feedback from our Investors has been positive as well.  Making both side of the equation happy is central to our product decisions and we think we succeeded with these new features.

To take advantage of these new features you can post your deal to the Investor Community where it will be accessible to the 15,000 investors that use Angelsoft. Screenshots

Investor Community live deal-feed added to the Investor dashboard
The right side of the investor dashboard is a live, auto-updating feed of the most recently viewed Investor Community deals.  Investors will see this every time they log into Angelsoft.  The middle section of the dashboard displays updates on all Investor Community deals they are interested in. Screenshot

Investors now receive an email every 2 weeks with the 5 closest and 5 highest rated deals
It is a lot to ask investors to go seek out entrepreneur plans.  Now we email the investors in our system every two weeks with a simple email informing them of the 5 closest deals to them and the 5 highest rated during the previous two weeks.  Our first email went out before Thanksgiving and received tremendous response. Screenshot

Entrepreneurs now receive more feedback from investors.
Investors can easily leave you feedback in the form of a rating or written feedback.  You can see ratings and respond to feedback on your Application Manager.   Learn more on our blog here and here

Investor activity ratings
At the top of the investor dashboard we now display ratings on investor activity.  We show them how they score relative to the rest of the community on the amount of feedback they provide to entrepreneurs.  We think this will result in more entrepreneurs receiving the feedback they need. Screenshot

This is a major step forward in improving the funding process for entrepreneurs.  Spend some time with these new features and leave comments with any feedback that you have.

Last week we conducted a survey that asked our Angel Investors how they felt about exposing more information about themselves on our Angel Investor Directory.  The idea was to help our 450 Angel groups network more effectively and to help entrepreneurs make intelligent choices about whom to apply to for startup funding.

We wanted to get a sense of how valuable this information would be to entrepreneurs, so we reached out to them to tell us their thoughts on the new Group Profile we are building.

You can see our current wireframe below:

(click to expand to full-size)

The results were a little more expected than our Investor survey, with 95% of the the entrepreneurs responding claiming that the information would be valuable to them.

You can take the original survey here and see the results here.

With both Investors and Entrepreneurs in near perfect agreement, we are excited to move forward with the feature.  We should be releasing it to Investors by the end of January, allowing them time to fill out the Group Description and Investment Criteria sections appropriately.  The feature will be visible to entrepreneurs towards the end of February.

The Angel Capital Association released results of a survey that they did today on their web site. They report mixed results projected for angel investing projections in 2009:

While full data for 2008 investments are not yet in – as many angel groups expect to finalize investment deals in December – the picture from the survey is that total angel group investments in North America will decrease by at least ten percent from 2007. Survey data for the ACA Angel Group Confidence Report was collected from leaders of ACA member angel organizations November 6 to 18th. About two-thirds of all ACA member organizations participated in the survey.

Based on survey responses, the average size of group investment per deal in 2008 ($280,936) is about six percent larger than the 2007 average, but the average number of investments per group (6.1) will be about 16 percent less than 2007. The average total funding by each group is therefore estimated to be about $1.72 million, more than ten percent less than the 2007 figure of $1.94 million.

Group leaders had been optimistic about increasing their investments at the beginning of this year, in a survey conducted in January and February, 2008. But in this November survey, nearly half of the respondents (47.9 percent) found their activity was less than they had predicted for 2008. Activity was higher for 16 percent of the angel groups and another 36.2 percent found that their investment activity was about the same as they had forecast.

Also, David S. Rose, our CEO, was interviewed by Tech Confidential today on his view on the impact that the current market climate will have on angel investing. His comment:

TC: A recent survey by the Angel Capital Association indicates that angel group investments in North America this year will decrease by at least 10% from last year. Why do you say the role of angels will increase?

Rose: In the near term we will see a divergence in the angel community. The "casual" angels, people at the lower end of the accredited investor spectrum, will likely pull back during the crisis because their base of investable capital is shrinking, and there is going to be a significant movement away from risk. At the same time, the "serious" angels are likely to maintain or increase their early-stage investing during this period, because innovation doesn't stop during a recession, and valuations are now quite attractive for startup deals in this tight market.

In the longer term, angels will unquestionably be playing a larger role in the startup space. Plummeting technology and distribution costs have made it possible to start highly scalable businesses anywhere, at any time, and on a shoestring budget. Because of the low capital requirements for these types of businesses, it is very difficult for traditional venture funds to get involved early in a company's life cycle, since the funds need to put many millions of dollars to work. At the same time, the universe of active angel investors, leveraged by organized groups as well as by global platforms such as Angelsoft, is rapidly expanding to step in and provide funding at the early stage.

Today, in the U.S. early-stage market, angel investors and traditional venture capital funds invest roughly the same amount annually, between $25 billion and $30 billion. I believe that within 10 years, angels will be investing more than twice as much as VCs into startup and early-stage companies.

We think that both articles are valuable reads for anyone seeking angel or VC funds next year. Its clearly a challenging market, but the most important thing to take away from the articles is that there indeed will be funds in 2009 for the right companies at the right valuation, despite the market climate.

Angel investor groups have a reputation of being extremely guarded about their activities. As most of you know, we've spent the last 4 years helping to make the activity of this hugely valuable sector of our economy more transparent. As part of these efforts, we're building Group Profiles for all of our 450 angel investor groups to help them network more effectively and to help entrepreneurs make intelligent choices about whom to apply to.

You can see our current wireframe below:

If you take a close look at the screenshot (click on it and expand it to full-size), you can see that we're encouraging our angel investor groups expose some very sensitive information about themselves. Obviously, our highest priority has ALWAYS been to protect our groups, so we decided to send them a survey to get a sense of how open they were to this idea. The survey asked if they would be willing to show this information and if so how valuable it would be to their members, prospective investor partners, and to entrepreneurs.

The response was somewhat surprising: An overwhelming number of our groups thought this information would be valuable not only to their investors and fellow group managers, but ALSO to entrepreneurs. I've linked to the original survey and the response details, but combining the response, you get numbers like these:

Of the 60 angel investment groups that replied, a staggering 62% felt that even the most sensitive data would be valuable to entrepreneurs and only 19% wanted to hide this information from them. If you discount the 4% that didn't even want to share this information with their own membership, only 15% wanted to keep this information specifically from entrepreneurs.

Obviously there is now a raging debate here about how accurate the survey is, so we'd like you to chime in. Are angel investment groups realizing the value of transparency, or are these results meaningless? We're obviously hoping for the sake of the angel industry that it's the prior!

We're sending out the survey to our entrepreneur community tomorrow and will post those results then.

David Teten, a serial entrepreneur and author of The Virtual Handshake: Opening Doors and Closing Deals Online, will be holding a webinar next week called, "Where are the Deals? Private Equity Fund's Best Practices in Deal Origination" David will be talking a lot about the use of Angelsoft to both source deals from the Investor Community, and also using Angelsoft to manage all of your deal flow.

Other things that will be discussed:

-> In the current tough climate, how can you lower your deal origination costs?
-> How are you positioning yourself to become your target's preferred investor?

-> What are the primary sources of deal flow for institutional investors?
-> How can you use online networks and other “Web 2.0” internet technologies to increase your pool of sources?
-> What are the earmarks of a potential investment opportunity?
-> What best practices from sales and executive recruiting can you apply to the deal origination process?
-> How do you increase your inflow of useful referrals?
-> What is the best way to make warm cold calls?

The webinar will be December 16 at 2PM eastern. You can register here: http://tinyurl.com/6d3rff

As I mention early and often to anyone who will listen, the sensei of state-of-the-art presentations (which you will use to raise startup funding, inspire your team and sell your product to customers) is a gentleman named Garr Reynolds, the former Manager of Worldwide User Group Relations at Apple Computer. He writes the most influential blog on the subject, Presentation Zen, which was recently turned into the most influential book on the subject, Presentation Zen: Simple Ideas on Presentation Design and Delivery (Voices That Matter), a copy of which I present to every CEO who comes to me for training.

Next Monday, December 15, Garr will be conducting a live webcast at 2:00 pm PST / 5:00 pm EST, which should be mandatory viewing for everyone, even if you've been to one of my pitch coaching presentations [grin]. As Garr writes in his blog:

I have been asked to essentially talk about the contents of the book. I will indeed talk about the themes and ideas covered in the book, however, I have entitled the presentation How to Think Like a Designer (and why it matters). The applications of the items I discuss will focus on presentations, particularly presentations that are given with the aid of slideware, but the ideas can be applied to other types of presentations and even other types of disciplines such as web design and professional communications of all types. I have come up with a list of 10 ways to "think like a designer" with examples for each and applications for presentation design. Yet, there are of course more than 10 things we can learn from designers that may help us in our own work, so if you'd like to share your list — or even just a few tips of your own — please share those below. I appreciate your comments. Look forward to connecting with you during the webcast.

I can't recommend this highly enough, but if you are not able to make the live webcast (at which you'll be able to ask questions), the archive of the webcast should be available about 72 hours after the live event. Garr's presentation, blog and book are mandatory reading for any entrepreneur who is serious about communicating his or her vision.

Based off an internal e-mail about search engine optimization strategy:

When you start determining the SEO strategy for your site, the first instinct might be to try and figure out how search engine bots think and act and go from there, but that's only half the battle. It doesn't really matter if you know how a bot interacts with the web if you also don't think about how it sees the web. So, what follows is a little thing I like to call "SEO and Your Grandma".

Something that you need to understand about bots is... they're dumb. Okay, maybe that's a bit harsh. It's more that bots don't comprehend as much as a regular web browser. Since what they're really concerned about is text and links, that's how most of them see the world. They can't parse what's in images (only what they link to) and they don't really care about new-fangled things like CSS (first working draft published in 1996) and JavaScript (first implemented in 1995). They're sort of like your grandmother in that sense, and not the cool one who listens to Coldplay and tells dirty jokes. They're more like the traditional granny that sees the world simply, doesn't really keep up with the latest trends, and if they encounter something they're not familiar with, they just ignore it, or even forget about it altogether and head back home. Therefore, if we want granny to pay attention to something, we have to try and see how granny sees.

So, how do we do that? Easy–turn off CSS, JavaScript, and images. Yes, it can be done. There are prefs to disable all three in every major browser, but if you want to do it much more easily in Firefox, check out Chris Pedrick's Web Developer extension. You'll have a nifty new toolbar that will let you turn off images, JavaScript, and CSS in a couple clicks each, and you'll also have a bunch of new tools that let you handle cookies, window sizing, validation, and some other stuff you'll find fun (if you're a front-end web developer). If you're really hardcore, though, you can try looking at pages in just a text-based browser. There's Lynxlet for OS X, some Lynx ports for Win32, and I'm sure most of you *nix people already know what to do. After trying to browse for a few minutes with those, you'll have a new understanding of the word "tedium," but on the plus side, you'll have one app that instantly puts you in bot mode.

And that's all there is to it: just a small install and you're ready to go. If you start making sure to give your public pages a quick look with your granny goggles before letting them loose, you'll be able to eliminate a lot of potential SEO problems. Looking at pages this way can also help you figure out where you can make improvements, since you'll be seeing things more from a bot's perspective. At the very least, it'll help put you in the correct mindset for SEO, and you can start building from there.

TechCrunch posted an article yesterday about Kleiner Perkins accidentally publishing 588 entrepreneur applications to the open web. Kleiner Perkins has a home brewed online submission form for entrepreneurs to submit through. According to the TechCrunch post:

That data was accidentally published on the web by Kleiner Perkins’ former hosting provider, Meteora Technologies Group, in a SQL file, which is easily readable in a text editor or other application. The file was then indexed by Google and found in a query on one of the companies (the guys from Fruux found it). Applications from 588 companies are in the file (Google has cached an incomplete version of the file here). A quick perusal shows very detailed information from each of these companies.

This "oops moment" at Kleiner Perkins' is exactly why funds trust Angelsoft to manage all of their deal-flow. VC funds are in the business of finding and funding the best new companies - not in managing a software database or application.

When entrepreneurs apply through Angelsoft the data is encrypted and secure. Our database itself exceeds the most stringent security standards. We have a dedicated staff of engineers that works every day to ensure the integrity and the security of the data held within Angelsoft. These are full-time employees, not interns or associates who spend a portion of their time maintaining an in-house system.

The blame is really not on Kleiner Perkins. Until Angelsoft, there was no choice for proper deal-flow management software. Many firms just need to find a moment in their hectic schedules to move their data over to Angelsoft. Over 50 VC funds have entrusted us with their deal-flow management, and we are signing up more each day. The funds that have moved over tell us that they feel better knowing that their most valuable asset, their deal flow, is in a safe place with a team of professionals watching over it. Even better, they spend more time looking at DEALS - which is where they want to focus their time anyway.

In this two-week, short release we focused on the Deal List, adding some long-requested functionality:

Add/Remove Deal List Columns

Group administrators can now add or remove data columns from their group's Deal List under Group Preferences. New columns include: City & State, Referrer, Deal Leads, Funds Seeking, Valuation, Last Moved Date, Last Activity Date, and Entrepreneur's name.

All columns are sortable, to give you better control over your list display.

Assign Deal Leads

When the Deal Leads column is turned on, you can see each Deal's leads and add new ones right from the list. You can also sort by deal leads to see deals by their lead.

Invite Entrepreneur

If the Entrepreneur column is turned on, you can see which deals have entrepreneurs invited to them, and which don't. You can invite the entrepreneurs to fill out the company profile right from the deal list.
Invited entrepreneurs still cannot see investor documents, ratings, or investor-only discussions.

Shared Deals

The new Shared Deals folders on the Deal List help you keep track of all the deals you have referred out or co-invested out.
Shared deals are sorted into folders based on the groups they were shared with.

Hope you enjoy the new Deal List! Feedback is welcome below.



–The Angelsoft Team

In a pithy but perceptive post on O'Reilly ONLamp.com several years ago (which has, in some quarters, achieved almost iconic status), Derek Sivers wrote the following, which I think is an excellent way of clarifying why angels and VCs put much, MUCH less stock in "good ideas" than do the entrepreneurs who submit them:

"It’s so funny when I hear people being so protective of ideas. (People who want me to sign an NDA to tell me the simplest idea.) To me, ideas are worth nothing unless executed. They are just a multiplier. Execution is worth millions.

Explanation:

AWFUL IDEA = -1
WEAK IDEA = 1
SO-SO IDEA = 5
GOOD IDEA = 10
GREAT IDEA = 15
BRILLIANT IDEA = 20

NO EXECUTION = $1
WEAK EXECUTION = $1000
SO-SO- EXECUTION = $10,000
GOOD EXECUTION = $100,000
GREAT EXECUTION = $1,000,000
BRILLIANT EXECUTION = $10,000,000

To make a business, you need to multiply the two.

The most brilliant idea, with no execution, is worth $20.
The most brilliant idea takes great execution to be worth $20,000,000.

That’s why I don’t want to hear people’s ideas.
I’m not interested until I see their execution."

This release introduced a complete redesign of the Angelsoft navigation, a brand new Investor Dashboard, and a great new way to rate open deals. We also created a new Investor Community Forum, to allow investors from all groups to talk to one another! All in all we've had 540 updates, among them 267 were general bug fixes, 13 were new features, and 23 were smaller improvements.

You can see all of them here. The highlights are below:

 

NEW INVESTOR DASHBOARD

When you log into Angelsoft from now on as an investor, the first page you will see is the new My Dashboard tab, which includes:

• My Deals Feed - The new Deal Feed allows you to look at your deals with their latest activity. Deals you've invested in, deals you're interested in, deals you're leading, and deals you've thumbed up on the Community can be seen here. More importantly each deal provides quick access to all the latest activity information, including updated documents and messages.
  
  
• My Ranking - As an investor - are you a Minnow or a Whale? Maybe a Tiger Shark? Do you have the impact of a Spit Ball, or a Comet? When rating deals, are you an Arch Angel, or maybe a Little Devil? Read more about your personal rankings and how to change them in this blog post.
  
  
• Recently Viewed Community Deals - On the right side of the screen, you'll get a peak into what other investors are looking at in Community deals right now.

 

COMMUNITY DEALS & FORUMS

• Thumbs Up / Thumbs Down - We have introduced a faster, more intuitive way to rate open deals on the community. Simply give a Thumbs Up or a Thumbs Down from the list, or from the Deal Dashboard. The votes are tallied and a total score is assigned to each deal. You can sort by Highest Rated, and see the deals that your peers thought were worth a look!
  
  
• Deal Wall - Each open deal now has a Deal Wall, where investors can post their comments on the deal, either anonymously or under their name.
  
  
• Investor Forum - The new Investor Community Forum allows you to start a discussion with other investors on Angelsoft, whether or not they're from your group.
  
  
• Mini Community-Profile - Mini-Profiles allow you to learn a bit more about investors who post to the community. Their name and picture, the groups they belong to, as well as their bio - if they provided one.
  

 

ENTREPRENEUR IMPROVEMENTS

• Import Saved Applications - Entrepreneurs can now import an application even if the original application was never submitted.
  
  
• More Newsfeed Feedback - Entrepreneurs can now learn of their total community score, as well as each time their deal is voted up or down - directly from the Newsfeed.
  
  
• Entrepreneur Replies - Entrepreneurs can now reply once to each Community comment that was shared with them, allowing them to correct misleading impressions, provide additional information, etc. Their replies will be posted on the Community, right below the investor's original comment.

 

We realize the major updates in both design and function are bound to have impact on your experience. So please let us know what you think! Requests, suggestions, or questions are all welcome. Simply comment below.


–The Angelsoft Team

Angelsoft is a software company, we are not an investment group.

Angelsoft is the software tool that runs the Angel Investment industry, and increasingly, the Venture Capital industry.  Investors use Angelsoft as the exclusive means of accepting deal flow from entrepreneurs, evaluating which to move forward with, and collaborating between investors and investment groups across our network.

We also built tools for entrepreneurs to access those investors.  Entrepreneurs can access the entire early-stage industry for startup funding by applying to the Investor Community.  Entrepreneurs can learn more about those tools here.

Your dashboard ranking scores give you insight into your relative position in the Angelsoft investment ecosystem. You can affect your scores by getting involved.

Investment Rank

Your investment rank tells you how much you've invested compared to other people in the system. This is based on the total amounts that you have Committed or Transferred for each of your investments.
Since this is a comparative score, we will only tell you what percentage of investors on the system have invested less than you. To make your score more accurate - log into each of your deals and input the accurate investment amount. Then set your interest level to Funds Committed, or Funds Transferred.

Temperament Rank

Your Temperament Rank tells you how positive or negative you've been in judging open deals on the community, compared to other investors.

To more deals you vote Thumbs Up or Thumbs Down on, the more accurately we'll be able to judge your relative positivity or negativity. You must vote on at least 4 open deals to get any score, and at least 10 to get the full range of scores.

Your resulting score is based on the percentage of people who have been more negative than you in judging deals.



Impact Rank

Your Impact rank tells you how much effect your actions have on the community. This is based on a set of factors, including the number of deals you've lead, the number of deals you've invested in, the number of open deals you've referred to your group, the number of deals you've commented on or rated, the number of messages and documents you created, and the number of events you attended.

To improve your score - get involved in your group, and get involved in the community!

The New Entrepreneur Newsfeed gives you even more visibility into the funding process, and how your application is being judged and evaluated.

Here is a guide to better understand what each news item means:

– Investor comment on Community:
An investor has posted a comment on your Community deal wall and chose to share it with you. This comment is available to all investors on the Angelsoft Investor Community. You may reply to this comment just once, and it will be posted right below the investors comments for all investors to see.

– An Investor gave your application a Thumbs Up:
Investors on the community can moderate deals Up or Down. You can see your total ratings from investors, including your current relative position among community deals.

– An Investor gave your application a Thumbs Down:
An investor has rejected your deal by giving it a thumbs down. This will affect your relative position in the community negatively, however positive ratings can cancel the negative ones out. Again, you can see how it affects your relative position right on your Investor Community box on the top left.

- An Investor has reviewed your application:
An investor has clicked on your application and read it over

- New Investment: $100,000 from John Doe, East Coast Angels
An investor has committed funds to your deal

- New Investor: John Doe, East Coast Angels
An investor has expressed interest in funding your deal, but has not entered an investment amount.

- Invitation: Screening Event 2008:
An investment group has invited you to an event. Clicking on the event name will link you to the details

- Referred from Acme Angels to East Coast Angels:
Angelsoft is a network and groups will often share deals between them. This is called a referral. When your deal is referred, it is sent to the second group as if you had applied to that group directly. A new application will show up on your My Applications tab.

- East Coast Angels invited Acme Angels to collaborate:
To finish out a round of financing, Angel Groups often need to collaborate on a deal, or co-invest. When this happens, Group B is invited into Group A's deal room. In this case, you will not see a new application on your My Applications tab

- A member of East Coast Angels has referred your application to his group:
Congratulations! An investor has referred your deal from the Investor Community to his investment group for further review.

- Investment Terms updated by John Doe:
An investor has made changes to the investment terms, which can be viewed on the My Investors Tab

- Application posted to the Investor Community by John Doe:
The Investor Community is a feature inside Angelsoft. Investors post deals there when they are looking for outside investors to finish out a round. Applications posted by investors are labeled differently than those posted by entrepreneurs.

The Fall 2008 ACA Southeast Regional Meeting was held in Savannah, GA last week.  The gathering was graciously hosted by Ray Wenig and Bob Franklin of the Ariel Savannah Angel Partners.  16 Angel Groups and 8 states were represented by the 75+ individual angels in attendance.

8 companies presented to the investors present, and a special “Fast Pitch” competition was held on the last day for local entrepreneurs.

We also heard a keynote from John May, Chairman Emeritus of the ACA, and John Huston, current ACA Chairman.

Knox Massey, Managing Director of the Atlanta Technology Angels, live-blogged from the event.  Read his entire post here.

Bill Warner, Managing Partner of Paladin and Associates and Chairman of the Triangle Accredited Capital Forum in North Carolina, has provided a detailed recap of the conference and, more importantly, some thoughts on how angels are responding to the current economic climate.  The full post is here and highly recommended.

The "Two Johns," Knox, and Bill - seasoned investors all - provide some sobering, yet optimistic commentary on the current state of angel investing.

Some key realities and trends identified, in short (Entrepreneurs, take note):

• Focus. Focus. Focus on businesses that move quickly to profitability and positive cash flow.
• If you are an entrepreneur raising money now, take what you can get.  Like, right now.
• Valuations will likely be compressed.
• Angels today will be much more proactive in managing their portfolio companies. While amounts invested may or may not change, angels will be much more selective and are going to pay a lot of attention to how their money is spent.
• And, as we've been observing here at Angelsoft for some time, angel groups will increase syndication in order to pool funds and expertise, diversify, and spread risk (Hmmm...wouldn't it be neat if there was, like, a platform, that facilitated syndication???).

My two cents, for what it's worth: Despite the current doom-and-gloom narrative, and in a week where we've seen thousand point swings in the public markets, it was absolutely refreshing and encouraging to be in a room with 75 angels who, it seemed, can't wait to fund the next great startup.  I say, just get out of their way!

 John May is the Chairman Emeritus of the Angel Capital Association, the official umbrella organization of the leading angel investment groups in the United States. He is a major figure in the global angel sector, having written two seminal books on angel investing, one for entrepreneurs on fundraising, and another for angels on best practices in investing. John serves as the primary East Coast trainer for the ACA's Power of Angel Investing seminars, and through his management firm New Vantage Group runs several of the most respected and active angel organizations in the country (which, of course, all use Angelsoft to manage their deal flow and investment collaboration.) What follows is a clarion call to serious angel investors that John issued this week in light of the capital market gyrations.

"Calls have been flooding into me from the press, our investors, and our portfolio entrepreneurs about how to react to the darkening economic environment.  Early-stage investors in entrepreneurial companies have always represented themselves as patient investors and supportive partners, not financial engineers.  In fact, we angel investors have frequently thought of ourselves as “mentor capitalists.”

So it occurred to me that in this time of political uncertainty, lack of clear direction from economists, and once-in-a-lifetime hurdles, we must stand up and either be true classic angel investors or we should go home.  I seriously think that we will look back on this era as one when we stood by our companies and separated ourselves from the quick buck, irresponsible masters of the derivative empire or when we ran and confirmed to the popular press that we were hobbyists and not very angelic at all.

Those of us who believe that serious angels – located in all cities, all states – formed the Angel Capital Association and educated themselves at Power of Angel Investing seminars and told foreign guests that we were part of a movement, must now stand up and support American entrepreneurship like never before.

How can we demonstrate our true colors? Here are just a few action items that come to mind – a short list I hope you will expand and communicate to others in our venturing community.

First, be honest, realistic and communicate.  Like never before we need to bring our wisdom and experience to bear and tell it like it is to struggling entrepreneurs.  We have a principal-to-principal relationship like no other asset class and we must communicate like never before.

Second, demand stark reality in planning and operations and assume the worst of the coming recession. Do not take half steps.  Do not rely on past assumptions of pipeline, financial institution support, and prior partners.  Re-confirm relationships.

Third, remember cash is king.  Husband current resources, talk to co-investors about capacity to continue support, demand review of current operating assumptions.

Fourth, expand on dialog collaboration with like-minded investors who could partner in supporting current companies in the coming months – syndicating has already become common among angel groups – it may be vital in order to stretch resources.  In a time of lack of trust among financial institutions, we need to work alongside fellow sophisticated angels by co-investing in existing portfolio companies.

Fifth, task angels to seek alternatives to growth and to find exits that were ignored, discounted, or unknown before who could buy the company, who could provide support in the short term, and what would happen in a worst case scenario.

Last, angels need to be honest with themselves and not ignore the reality of limited resources available to do new deals even while “protecting our own children.”  I suspect in the coming six to twelve months many alluring new opportunities will have to be reviewed in light of the blight of our existing children, and if we meant what we said about being different than hit-and-run financial engineers, we should honestly address current company survival plans before leaping to the next best thing.  We may be able to do both – but inward reflection and some “reality therapy” must come first before executing a revised 12-month plan.

We don’t know how bad the upcoming recession and credit crisis will be, but we, of all investors, should use our experience and long-term perspective to help our early-stage innovative company community through these uncharted waters.  Let’s stand up together."

John May
Managing Partner, New Vantage Group, Vienna VA
Chair Emeritus, Angel Capital Association

Alan Patricof is one of the country's most important venture capitalists and angel investors. He founded the VC fund Patricof & Co. in 1969, which has gone on to become 300-person Apax Partners, one of the world's largest private equity investors. Three years ago, returning to his roots, he founded Greycroft Partners, an early stage $75 million fund focusing on technology startups (and an Angelsoft user). Throughout this time he has also been an angel investor with his own funds, and continues as an active member of New York Angels. In light of the gyrations in the world's capital markets, and particularly a Doomsday meeting that Sequoia Capital was reported to have had recently with their portfolio companies, Alan felt it important to put things into perspective.

Here is the full text of a statement that he issued this week, addressed to early stage companies and the investors who fund them:

"The comments made by the partners of Sequoia Capital at their recently held 'CEO Summit' have been widely covered by leaks to numerous bloggers. These bloggers have disseminated the details and spread the contagion of the sentiments to the public at large, unfortunately running the risk that the words become a self-fulfilling prophesy. Without challenging the comments, which expressed a heightened degree of doom and gloom for the economic prospects of young start-up companies particularly, I do think it calls for a somewhat more restrained response on the outlook and required action before throwing the baby out with the bath water. Certainly, we are going through a period of enormous economic and political uncertainty. The loss of confidence, primarily in our financial system, as a result of the excess of the past five to ten years (if not longer - we may never know how long some of the flawed practices have been going on) is one of the leading contributors. We are also at the moment looking for leadership on the political front, and both because of very low public support for the President and because we are in the midst of a heated election for his successor, we have no real voice of authority to provide some guidance, reassurance, and inspirational confidence that the bus has a driver who knows where he is going.

Nevertheless, aside from an over-inflated housing boom that had to collapse sooner or later and a complicated financial system that arose in part to fuel this engine, the basic economy was in reasonable shape, with GNP growth and productivity gains supporting a solid, if not vibrant outlook (I know the automotive industry is also going through bad times but it no longer pervades the economy as once conveyed in the expression, "As GM goes, so goes the nation.") 

Advances in technology are allowing companies to make goods and provide services faster and cheaper. The wireless revolution and the Internet have made the dissemination of information easier and more pervasive for the entire world and brought significant benefits to every phase of our economy. That is not going to stop, although it may temporarily slow down. In these difficult times, there will be winners as well as losers (and the former may be fewer in number for a while).

The point is, the financial problems are being addressed, if not a bit belatedly, and some international mechanism will be found in short order for some coordinated policy that will restore order and confidence to the system. 

Most young companies, with which we are specifically concerned, are financed with equity capital. That has its positives and negatives; on the one hand, debt is a very small factor in the capital structure of most small companies so loan foreclosures and the interest rate burden are not of prime concern. On the other hand, equity capital, which is provided by private investors, requires confidence in future prospects for reaching profitability and creating a strong market value. Certainly under current conditions it is hard to engender such confidence although history has demonstrated that it is in times like these that great opportunities are created. I have always said, "The best time to invest is when the drums are beating, not when the trumpets are blaring!"

This is surely a time for companies to pay meticulous attention to detail, particularly their cost structure. It is a time to be realistic in their near-term assumptions for revenue growth and take nothing for granted. Raising additional capital to support operations is of course critical, as it is at any time, but this is particularly a time for young companies to be extra cautious in developing pragmatic assumptions of their needs and in focusing on the amount and not necessarily the cost of that capital.

This is not a time to panic, cut off all investment in the future, and burrow into a dark hole. Take a page from the packaged goods industry that the time to gain market share is during tough times when your competitors are weaker in responding. And while this may feel more directly related to portfolio companies, we as a venture industry should not retreat either. It is our strong belief that we can and will continue to make sound investments in excellent opportunities. It is as good a time as ever to start a company with sound fundamentals. 

So my point is to heed the caution of the Sequoia comments but to use them only as a strong message to reexamine all cost elements and growth plans and use this opportunity to assure that you are a survivor. Find a way to use this moment to gain your greater share of the market by providing a solution that is needed by others to improve their prospects in the difficult environment ahead. Tighten your belt and live within your means. Although the timing makes this message seem more prescient, it is a philosophy that works for successful companies at all times and at all stages; it is simply put, good business. This is not a time for heroes!"

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Here is a Red Herring interview with Alan from last year, explaining why he has such faith in the early stage technology community.