What tools can I use to manage relationships with investors?

Gust.com is the most widely used tool platform for both sides, with hundreds of thousands of companies and tens of thousands of investors using it to track and manage their relations with the other. It’s the official collaboration tool of the Angel Capital Association (and the equivalent national angel investor federations in 20 other countries.) It’s also used by over 300 venture capital funds. For a longer discussion of its utility for entrepreneurs from pitch to exit, see my answer to: While raising money, what tool are you currently using to manage your relationship with investors?

…and for a discussion of the investor-side tools, see my answer to: What are some ways you keep track of startups you are evaluating/diligencing/investing in?

(Needless to say, the author of this post is completely biased, as I am the Founder & CEO of Gust :-) )

*original post can be found on Quora @ http://www.quora.com/David-S-Rose/answers *

As a new independent angel investor, how will I find new companies to invest in?

The two sites you mentioned are both secondary listing services, for later stage companies. For a new angel investor, by far the best thing to do is to join a local angel investor group that belongs to the Angel Capital Association. There are hundreds of them, with at least one in every state. Major metropolitan areas typically have more than one.

Some groups specialize, investing primarily in life sciences or tech companies or women-led ventures or other areas. Some are wide open, investing in everything from real estate to films. Most are somewhere in between, focusing primarily on early-stage, high-growth companies with scalable business models. These are typically Internet-enabled, or consumer products, or medical devices.

But regardless of the specifics, what they all have in common is bringing together a group of active Accredited Investors interested in supporting young startups. Benefits of joining a group include pooling deal flow, capital, domain expertise, and investing experience. Most groups run regular education sessions for new members, and provide mentoring for less experienced investors by those with many deals under their belt.

The typical US angel group will receive a dozen or more funding applications from startups each month; the most active ones, such as New York Angels will receive over 100. Groups also often “syndicate” investments, working cooperatively to fund larger rounds that are bigger than one group can easily handle alone.

As a very rough idea of what these groups are like, the typical member invests in one or two companies each year, putting in $25,000 to $100,000 in each one.

To find one or more local angel groups near you, use the industry’s official investment group search engine at http://gust.com/find-investors.

And for a more in-depth view of angel investing, check out Angel Investors: If I want to invest $5,000 as a new angel investor, what chances do I have of making a profit in 5 years?.


*original post can be found on Quora @ http://www.quora.com/David-S-Rose/answers *

What is the best way to connect with investors?

With Gust, the power of the system is that your completed investor relations profile can now serve as your official application to virtually any organized angel group in the world…all you need to do is share it with them*.  I’d suggest that you browse through the Gust investor search engine for investment groups (and accelerators, incubators, business plan competitions, et al) that are relevant to your startup (by location, industry, type of organization, etc.), and read their detailed profiles to see if they would be a good match for your venture.

For example, from the profile for New York Angels, you will find out about the types of companies in which the group invests, the returns and valuations they seek, and a list of many of the companies in which they have already invested. If you’re logged in to LinkedIn, you will also see the names of investors within the group to whom you have a personal connection!  Assuming the group seems like a fit, then simply click the “Share Now” button at the top of the page, and voila, you’re on your way. New York Angels, like most other mainstream angel groups these days, does not charge an application fee so there is nothing to lose by applying.

On Gust, investment organizations are able to set filters for submissions in order to be sure that neither you nor they will be wasting each other’s time if you apply. In the case of NYA, the group is pretty eclectic, and open to receiving applications from virtually any company in any area. While the large majority of investments are made into US-based ventures, all New York Angels members have access to all applying companies, and many of the group’s investors are prepared to get involved with a company personally, even if it is not right for the group as a whole.

*Note that Gust also allows you to share your password-protected investor relations site with individual investors and VCs you know or may meet, even if they are not part of an angel group or fund that uses Gust to manage its deal flow. As such, it’s a handy way to keep all your information and your investors organized.

*original post can be found on Quora @ http://www.quora.com/David-S-Rose/answers *

What are some good things about Gust that some founders might not know?

As the largest global database of startups (bigger than Crunchbase and AngelList combined, and more than double the size of StartupGenome), searchable by keyword and location, and with all entries written by the startups themselves, it can provide a quick sanity check before you go around saying “we have no competitors”.
Rest assured that your potential investors have already used it for their own research on your market.

*original post can be found on Quora @ http://www.quora.com/David-S-Rose/answers *