Social networks that connect early stage startups with potential investors
In the world of startups, coming up with an idea isnât too difficult, at least not for the entrepreneurs. The hard part is convincing everyone else of its brilliance. From friends and family to potential customers, it can sometimes seem like a battle getting the world to understand your unique value proposition. A big part of that includes convincing investors.
There are a handful of social networks specifically geared towards connecting startups with angel investors. Here are a few tools you should look into:
Gust: Gust is a global platform for the sourcing and management of early-stage investments. Skilled entrepreneurs are able to collaborate with investors by virtually supporting all aspects of the investment relationship, from initial pitch to successful exit.
This platform resembles a freelance website. Each business can create a profile and pitch investors. Similarly, investors can comb through the business listings to find startup partners.
Pros: Itâs very well-organized and full of tips and tricks to help startups stand out. As its site proudly brags, Gust.com helped over 1,000 businesses find funding in 2011.
Cons: Strange as it may seem, we were hard-pressed to find any cons. Over 50 Angle Investing groups, including Angel Capital Association, World Business Angels Association and Alliance of Angels, have endorsed it.
AngelList: AngelList is a platform for startups started by the same guys who started VentureHacks. This site claims to have raised over $10 million this month. Similar to Gust.com, its goal is to introduce entrepreneurs to investors.
Pros: With over 6,000 introductions in this month alone, this site hosts vast troves of both startups and investors. As long as you are willing to do the hard work, this site can be a huge opportunity for continually locating funding.
Cons: It can be easy to slip into thinking that you donât have to do any work to reap the benefits of this site. AngleList shotguns new startup names at investors every day. Youâll still have to develop an actual relationship with these investors â just like you would offline.
Pitcheo: Pitcheo touts itself as "a revolutionary entrepreneur social network that is quickly gaining momentum." Social entrepreneurs can connect with other business founders and pitch their concepts to angel investors who are eagerly searching for viable new ventures. Resembling an online dating website, Pitcheo automatically connects entrepreneurs and angel investors based on capital and specific expertise.
Pros: Itâs more targeted than traditional angel investor sites. It integrates social networking, email and online team building.
Cons: All youâre really allowed to do with the free account is set up a profile. Only after signing up to pay $33 a month will you be able to actually pitch your idea to investors.
LinkedIn: Weâd be remiss if we didnât include the top professional social network out there. With over 200 million users, LinkedIn is a must-have tool for entrepreneurs.
Pros: The site is based on networking, so it would be very ordinary for you to reach out to a potential investor. Youâll also have access to more professionals here than anywhere else.
Cons: Without paying a premium fee, you wonât be able to send InMail (LinkedInâs version of email). This site is also less specific than the previous three sites in that not everyone with a LinkedIn account is interested in investing.
Meetup: This social networking site is based on the idea that itâs better to connect face to face than through the Internet. Meetup allows members to form a group that can both collaborate online or meet in person. Groups often revolve around a single interest, including business interests.
Pros: An in-person meeting can sometimes be the push that a business deal needs, and with 342 angel investor Meetup groups (by our last count), youâll have ample opportunity. Meetup also allows for great specificity, meaning that you can connect with investors in your particular industry.
Cons: It can take a little work to maintain a presence on this site, especially if you started your own group. In order for you to keep your name in front of potential investors, youâll have to keep discussions going and schedule regular meetings.
New York Investment Network: Based on the name, it may seem like startups in the Triangle are prohibited from joining, but this social network also has an âout-of-stateâ category. It functions similarly to Gust, in that entrepreneurs post proposals, and it is up to investors to contact the business owners.
Pros: Itâs free to use until an investor contacts you. Only after you reach out to the investor will you be charged a one-time fee for membership. If you try it out and find you donât like it, it wonât cost you anything.
Cons: If you do decide to reach out, however, youâll be hit with a $199 fee.
IdeaCrossing: IdeaCrossing revolves around helping entrepreneurs grow their business networks. It provides the opportunity to meet with possible mentors, business partners and investors. Similar to Pitcheo, it connects members of the same industry based on common interests or needs.
Pros: Itâs completely free, and it does a lot of the work for you. By pairing you up with specific investors based on your ideas, youâll be saved from having to shotgun pitches across the entire VC community.
Cons: Unlike Pitcheo or AngleList, itâs not solely focused on pairing startups with investors. If youâre looking for a broader scope of benefits, then this will be a great site. However, if youâre strictly seeking capital, you may be better off going somewhere else.
Plan Heaven: Like Gust, AngelList and Pitcheo, this site is strictly about connecting startups with capital. Entrepreneurs are encouraged to make 10-minute video pitches, which are posted to specific areas of the site based on industry. Once a new pitch has been added to the site, angel investors will be alerted through email.
Pros: A 10-minute video pitch will provide you with an opportunity to communicate passion for your business in a way that a written proposal canât. Itâs the closest thing to a face-to-face pitch.
Cons: Because it is up to the investors to contact you, youâll have very little control over who sees your pitch. This means you arenât able to target a particular firm, and are left shotgun pitching every VC investor in your industry.