Thomas Korte

• What Startups Can Learn About PR and Crisis Management http://t.co/wcETtQP by @msuster #
• Every newsletter & deal email should have this feature: http://t.co/l4uPKcs @angellist is out-innovating every e-commerce company! #

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• Slides worth watching: "Dropbox Startup Lessons Learned" by @drewhouston – over 1 year old, still very relevant! http://slidesha.re/nmm1q1 #
• Good "exit popup" promo by @appsumo >> Picture: http://bit.ly/qhskBz #
• join.me is absolutely amazing – free screen sharing and online meetings w/o downloads #finally http://bit.ly/p9re4s /cc @joinme #
• OMG image ads on @google #speechless screenshot: http://t.co/NF1pt7Y #
• How to design “Coming Soon” Pages for results: http://t.co/fHudzVU by @hongkiat #
• Great "viral" coupon promo by @ashmaurya for his book Running Lean http://t.co/4L4bjEo screenshot: http://t.co/QamYrYv #

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• @davemcclure are you monitoring my emails? I am speaking to @parislemon in a few minutes /cc @arrington #
• +1 @davemcclure "@AngelList is the single greatest innovation in our industry in the past 5 years": http://t.co/7I909Hr /cc @emilychangtv #
• Lean Design @ kids summer camp #impressed http://t.co/QGlsxjx #
• 12:20 AM and I am still browsing startups on @angellist – it's crack-cocaine for investors and startup junkies … #
• "People remember your hits more than your misses. It’s okay to fail as long as you learn from your mistakes" http://bit.ly/qQblu5 #
• Object of desire in a digital world http://bit.ly/oBjTZp #iwantone bravo @google and @TCOLondon #
• 160 AngelPad applications in the past 8 hours …. keep 'em coming – application closes when I get up (5 am pst) http://bit.ly/ocDpij #
• Inspiring #TEDtalk by @mattcutts: "Try something new for 30 days" http://t.co/PQ7dEv7 #
• 60 minutes with @Naval: "Hack Your Funding" on Hackers & Founders TV http://bit.ly/olCMuS << it's worth your time! #
• “Marketing @Google is extremely analytical: If you can’t measure it & show that it works, Larry will not approve it" http://bit.ly/qgBPXV #
• Research: "iPads use significantly more Wi-Fi data than the average mobile device"
  http://t.co/i7Tphij #
• Save money: "The best results come from testing no more than 5 users and running as many small tests as you can afford" http://bit.ly/ocJdh4 #
• Few entrepreneurs are able to resist the glamor of @techcrunch coverage & funding for an unproven concept http://bit.ly/r3ArW0 @kevindewalt #
• What a difference 20 years makes! Excited to see what we come up with in the next 20 years http://tcrn.ch/pYp3p0 #
• An Open Letter to Teens: "My point is that you need to be CAREFUL online." http://bit.ly/oY5nq5 by @BrandSprout #
• Thank you @gmail for making the world smaller: "Calling from Gmail now in 38 langs – lower rates to over 150 countries" http://bit.ly/ofQ32p #
• I wish I could order @uber car at specific time. Last time to SFO I ended up in a dirty cab – no uber was available http://bit.ly/nOEN1e #
• "Referred customers tend to have a higher initial contribution margin & are more loyal than other customers"
  http://bit.ly/oHmRp5 @flowtown #

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• Founders, order this book now: Venture Deals by @bfeld & @JasonMendelson – the book just hit #13 on Amazon's Top100 http://t.co/3VfTUh3 #
• Awesome job at great well funded startup: Engineer / Hacker / Scrappy Coder @crittercism http://awe.sm/5PjNh +20 more positions in SF #
• Just finished @bfeld & @JasonMendelson's "Venture Deals" http://awe.sm/5Podr – if you are a founder and don't read this book you are crazy! #
• Engineers: Join well-funded #AngelPad2011 mobile startups in San Francisco #job http://bit.ly/qp58xt /cc @weloveastrid #
• Funny (and probably viral) marketing by the @gmail team: "Email Intervention – Save your Friends from outdated email "http://bit.ly/qxPDaA #
• Banner visibility research: "Ads shown 5 times or more are 12-14 times more effective than ads shown less than 5 times" http://bit.ly/qWRbBm #
• Hiring Tips: "Build your employer brand" and 7 other tips for startup hiring success http://bit.ly/qI0BBe by @sbspalding #
• The #AirBnB nightmare was the talk of the town last night at #TCparty It might be a real watershed moment for AirBnB http://bit.ly/rcLF5J #

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• +1 @Om "Startup founders and company leaders are the ones who define its culture." http://t.co/bGWpmmy via @om's newsletter #
• @jasonlk Did you use echosign to sign all the paperwork – btw, I love echosign all @angelpadorg docs are echo-signed. #
• My observations on the fundraising climate based on #AngelPad11W session: http://t.co/T2zF8z9 #
• Fundraising Climate: AngelList has replaced the traditional executive summary for startups /cc @angellist http://t.co/vFH5O7E via @thomask #
• Fundraising Climate 2011: Founders almost always prefer convertible notes http://t.co/WdObCVd via @thomask #
• "Entrepreneurship = Lewd Jokes + Product/Market Fit?" by @saumil #AngelPad2011 founder http://awe.sm/5PLBA #
• @sf311 Tree down, blocks street http://t.co/xgFcOBV #
• @SF311 340 Bryant #

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Most founders fundraise once or twice in their lifetime. I have seen over twenty companies raise funds since I started AngelPad a year ago and the process is fascinating.

It is as diverse as the startup world: Some companies have commitments and are “oversubscribed” within hours, others have to work hard to ultimately succeed in raising funds (let’s not forget that fundraising success does not mean business success), and others end up selling the company in the process.

Part of our mentoring program at AngelPad involves working with founders throughout their fundraising process and we ask our founders to closely keep track of their fundraising meetings as well as submit a survey back to us. The 13 AngelPad companies of the Winter 2011 session had over 350 meetings with VCs, Micro VC and Angels. On average they met with 27 investors  each – the range being 11 to 48.

Most of the meetings were with VCs (171), followed by Angels (140) and Micro VCs (46).  Broken down per company that is on average 13.1 VC meetings, 10.7 Angel meetings and 3.5 Micro VCs meetings.

The vast majority of companies succeeded in raising funds, many have not announced it yet though (so far of the AngelPad Winter 2011 session, only Coverhound, Shopobot, Crittercism and Astrid made announcements). Hopscotch was acquired.

Based on this experience, here is my take on the fundraising climate of the last quarter:

1. Seed is the new A: Rounds are larger, caps are higher – this should not be a surprise to anyone. However, to assume that every company is priced at 5M or more is a mistake. Many investors – especially angels – have dropped out of the market assuming the caps are out of their reach and that it is harder to make money. Very few angel investors are active in rounds north of $5M. It is however important for founders to be aware of the effects of a high cap in a seed round.
   

   Tweet“Seed is the new A: Rounds are larger, caps are higher”

2. VCs invest earlier: Most VCs are active at seed stage. Almost 50% of all AngelPad Winter 2011 fundraising meetings were with VCs, so anyone who says VCs are not investing at seed stage is not up to date. The majority of rounds in AngelPad companies have at least two VCs involved. This creates a unique challenge: VCs do not operate like angels and Micro VCs, they have a partnership process that takes time and effort. The average fundraising time has been considerably longer in rounds with multiple VCs.  Even the firms who claim that any partner can invest $ xxx without the partnership are slower to commit than angels and Micro VCs. One notable exception was Google Ventures – making offers to several AngelPad companies within 24 hours of demo day.
   

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   “The average fundraising time has been considerably longer in rounds with multiple VCs”

3. Caped Notes are the standard: Convertible Notes with Cap are still the most common funding form. They are easy, inexpensive and close faster.  However, many important questions regarding valuation, board composition and stock preferences are pushed into the future.  Priced rounds are becoming more popular again mostly because of tax incentives.  Most funds prefer priced rounds but “are ok with convertible notes”.  Founders almost always prefer convertible notes.
   

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   “Founders almost always prefer convertible notes”

4. Four Demo Days swamp every calendar. The large number of startups fundraising at the same time is adding complexity to the fundraising calendar. Demo days at AngelPad, 500 Startups,  YCombinator and Techstars NY, produced more than 100 companies fundraising at exactly the same time last April.  Founders who are not part of an incubator should try to navigate the demo day calendar and raise funds during “off-time” (YC’s demo day is on August 24th – from that day on startups compete with 64 well-prepared startups for meetings. AngelPad’s fall demo day is in late October).
   

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   Founders who are not part of an incubator should navigate around demo days and raise funds during “off-time”

5. AngelList is here to stay: AngelList has replaced the “executive summary”. Six months ago most of the investors on AngelList were Angels. This has dramatically changed. Almost every firm has a few partners or associates on AngelList and frequently use it to make introduction to other investors. AngelList has become so prominent that it is now common practice for startups to add a link to Angel.co to their company profile. AngelList  is also helping to introduce startups to lesser known and non-Silicon Valley firms in a scalable manner.
   

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   AngelList has replaced the traditional executive summary for startups

One interesting side effect of high valuations and increased VC involvement is that traction and business fundamentals are “en-vogue” again. In 2010, one could raise money with little more than a demo and good credentials – those days are over.  Companies have to show strong traction and a clear path to revenue, especially consumer-centric ones. In my experience, “idea-stage” fundraising is at a complete standstill. With seed rounds north of $6M, most investors’ appetite for experimenting and “believing in a team” is pretty limited and suddenly we’re back to the healthy business basics of building something people want and will pay for.

(This post was origanally published at Vator.tv)

• Thank you @weschan & @GoogleVentures! You are a great partner: "Google Ventures Invests in AngelPad Companies" http://t.co/k25qYQ1 #
• Congrats @crittercism: App-support platform Crittercism gets funding from @GoogleVentures, Kleiner Perkins http://t.co/xa16h76 #AngelPad2011 #
• The first Google Offer in San Francisco is $4 off Donut http://t.co/wX4oOlD – really? please @googleoffers, come up with something better .. #
• Crittercism CEO on AngelPad vs. YCombinator http://t.co/2CraVJV #AngelPad2011 #

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• Every startup should have stickers: Awesome deal on @appsumo today: $39 instead of $79 for 100 stickers http://t.co/9E4nxkb #
• Last chance to get an awesome iPhone Air guitar (hardware) by Christmas: http://t.co/QwLfima http://t.co/D8WPnoc #

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• Very cool viral marketing idea by @readyforzero http://t.co/48CxlVR #
• Congrats @shopobot for funding by @GoogleVentures & AOL Ventures http://t.co/cadZKmL #

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• Congrats @mopub: 1,000,000,000 (one billion) monthly ads served, 3 month after launching http://t.co/9ulqZeC #impressed #

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