Here’s my dilemma. Fundraising for a tech startup is hugely time consuming.
There are a million other things to do, and there is no good tool to manage the workflow start to finish. I’m in the early days of raising money, but the fundraising process goes something like this:
- Talk to my connections and see which angels or VCs they know.
- Ask for introductions.
- Email angel/VC.
- Follow up.
- Get a response, which often includes a question or two about the business.
- Go back and forth once or twice.
- Coordinate a meeting or phone call, which takes another few emails.
- Pitch them.
- Answer 10 questions.
- Follow up.
- Follow up.
- Eventually get some money.
There is no tool out there, that I’ve seen, built for cash-strapped entrepreneurs to manage the fundraising process and deal pipeline in terms of potential investors and next steps for each of them. (If you know of one, please let me know).
How do I manage contacts and next steps now?
A Google Spreadsheet.
It’s far from ideal. I have six columns: Name, location, firm (for VC’s), investor contact source, current status, and a more info link for their LinkedIn or Twitter accounts. This spreadsheet gets updated about once a week, or whenever I happen to remember to open it.
The challenge of Highrise and most of the other customer relationship management tools out there is that they come empty, meaning starting from scratch in terms of data entry. Even though I can import contacts, the vast majority of these VC and angel contacts are not already in my address book, since they are new connections. Every moment spent doing data entry is a moment not building a great product, talking to potential customers, talking to the team, or raising money.
I get new business ideas all of the time. I even started a blog just to write about ideas because they come so frequently. The need, at least for me, is a super simple CRM and workflow tool, pre-populated with angel and VC information.
Wouldn’t it be great to know which potential investors my connections knew? Of those, which ones invest in travel technology? Of those, who currently is looking for deal flow?
What if there was some way for me to broadcast to VC’s who are in the market for a startup in my vertical? More likely, what if there was a way to broadcast to any VC that was in the Bay Area (or traveling here)? What about seeing which potential investors of mine are in Portland and Seattle? Shouldn’t VC’s be able to quickly and privately ask me a question? Shouldn’t their good friends be able to see my responses to those questions (they are likely to ask me the same thing)? Shouldn’t there be some place to “login” to and spend some portion of my day fundraising?
Put structure around those connections and that data, and you quickly create a really valuable experience that saves a lot of time for all parties.
Certainly, a community of entrepreneurs is a valuable group — since we are all spend money finding talent, paying lawyers, accountants, consultants, and other service providers on down the line. Catch us and build trust with us early, and it shouldn’t be hard to monetize down the road. Heck, even the cash-strapped founder I am now – I’d spend $50 a month for a great solution.
Angel List would be a in a prime position to pull this off, since they already have most of the startup investment community social graph in place. But there are other ways to build the initial dataset of investors — and fortunately, in this case, the minimal viable dataset of the VC (75 percent) and angel community (40 percemt) is quite small.
Someone could fairly easily put together a list of every venture capital firm and every partner at each one. The harder one is the angel community. As long as simplicity was core, early users would add to the angel graph.
Someone very immersed in the venture industry could use their contacts to pre-populate the system, and build an integrated workflow specific to fundraising for a technology company in order to produce a pretty compelling offering fairly quickly.
Anyone want to compete with Angel List? If so, this may be an idea for you. To be clear, I have zero desire to work on or solve this problem. Once I get through the fundraising process, it will just be another idea sitting in the back of my head.
For now, the lack of a solution is an inefficiency and annoyance that I know can be done better. Someone else just needs to care enough about the problem to solve it right.
Drew Meyers is the co-founder of Oh Hey World. Global nomad originating in Seattle. Ex-Zillow community builder. Entrepreneur. Microfinance advocate. Travel addict. Fan of Red Hot Chili Peppers and Kiva.