For entrepreneurs with a new business idea, the process of raising money to start that business can be baffling.
On Monday, a company called Angelsoft unveiled an search engine for locating investors. Angelsoft makes software for investors to manage their deal flow and runs a Web site for entrepreneurs and investors.
“There are thousands of hours wasted by entrepreneurs applying to the wrong groups, and it’s no small secret that most venture groups completely ignore their public submission inbox. It’s basically like applying to a trash can,” said Jason Schwartz, Angelsoft’s community manager.
The tool is modeled after Kayak, the travel search engine that allows users to sort their results by factors like time, airline and number of stops. The investor search engine includes data on the 450 angel groups and venture capital firms that already use Angelsoft products and another 500 firms that don’t. Entrepreneurs can sort results based on things like location (Silicon Valley or New York, for example), stage (from concept to $12 million trailing revenue), valuation (from $50,000 to $25 million), industry and investment size.
They can also retrieve interesting stats about investors who are part of the Angelsoft network, such as how many days investors generally take to respond to pitches, how many investing partners view the average application, the number of applications the group receives and how many make it from the submission phase through screening, due diligence, an in-person meeting or an investment.
“This industry is shrouded in all sorts of secrecy,” Mr. Schwartz said. “By displaying live activity about their investments, we really feel we can help the industry do better at transparency.”
One of the most useful features of the search engine is a partnership with LinkedIn. When entrepreneurs are logged in to their LinkedIn accounts and searching investor profiles on Angelsoft, they can see people they know in common on the Angelsoft profile page.
This is particularly important in the clubby world of venture capital, where it can be difficult to get an investor to look at a business plan without some sort of connection. Reid Hoffman, the co-founder and chief executive of LinkedIn, who is also an angel investor, recently said on Charlie Rose that he never accepts a pitch from an entrepreneur without a reference.
Angelsoft also has an application, not unlike the common application that seniors in high school fill out once and use to apply to many colleges. Entrepreneurs can use it to pitch any number of investors they find on the site.
So far, Angelsoft is not enabling start-up founders to write reviews of investors, a la TheFunded.com. “The industry is not very transparent — this has been a big step for them, one they’ve embraced, but we didn’t want to push it too far and say entrepreneurs will rank you,” Mr. Schwartz said.
Angelsoft makes most of its money selling investor groups, including the New York Angels and Village Ventures, software to manage their deal flow. Mr. Schwartz said the group built a social network for investors once it realized it had a group of investors who could benefit from talking with one another, and is now adding tools for entrepreneurs to gain better access to that investor community.
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