After joining Uber in 2014, I saw how the enablement of small business and entrepreneurship is truly the lifeblood of the world economy as I worked to support our global driver-partner base to work and operate independently.
In 2019, I began my journey of learning about early-stage investing as a way to enable the next generation of startups. I began investing with a thesis of learning only – investing in early stage companies with great traction, solid business models, capable founding teams, and the right timing. My goal was to invest in a broad set of industries with small investments and learn as much as possible.
After reading Angel, I set out to complete my first 10 angel investments, with a focus on syndicate-based investing. As I got deeper into building my portfolio, I found that I did not have the ability to properly diligence potential investments and did not have easy access to aggregate market data about the industries and companies I was investing in. It became evident that there is a gap in portfolio management tools for early-stage SPV/syndicate/fund LPs and individual angels investing in startups. I further discovered that on most platforms presenting deals to investors, you are generally abstracted from the founders and often key metrics about the companies raising funds.
Other learnings included:
- Not all deals are created equal - many important company metrics are left out of the memos, often times on purpose
- Over abundance of “filling allocations” - co-syndication is now a normal pattern in deal flow as syndicates seek to fill out allocations often times regardless of company quality
- Investment valuations are non-transparently tracked, causing inaccuracy in TVPI or MOIC calculation for individual investors/LPs
The Portfolio CoPilot for Angel Investors
Manage Your PortfolioPortfolio Management
While some platforms provide the internal (platform-specific) ability to track deal flow and investments, most angels or LPs are using personal spreadsheets (or Notion templates 🤮) to track and manage their deal flow and investment portfolios. Their spreadsheets sometimes help to calculate their potential portfolio size and returns based on manually acquired data or cursory assumptions about companies they are tracking. Information entry is manual at best, and many investors lack the ability to adequately learn from their mistakes or from aggregate market data.
Platforms such as Crunchbase Pro are relatively affordable and easy to access, but users of the platform are not incentivized to keep company profiles, co-investors, or other financial information up to date. Crunchbase Pro is also targeted for sales or marketing executives looking to establish relationships with individual employees or executives in the company. These platforms lack incentives and engagement for updating information and are missing the insights necessary to be truly engaged for anything other than cursory research and learning. Further, institutional-focused platforms such as Pitchbook are grossly inaccessible to individual angels or LPs due to high licensing fees and inability of individual LPs to gain a corporate license. I tried to acquire a Pitchbook license while doing M&A research at Kyte and was asked to pay $30k for just 2 users to access the platform. Many platforms are also focused on competitive intelligence or M&A for private equity and family office investors, in addition to venture firms that may not possess their own datasets.
Platforms focused on startups such as AngelList are good for light research assuming the company has kept their profile up to date or is using the platform to advertise employment opportunities, but most data is best found off platform. Platforms like Carta and Captable.io likely have the best data about private venture raises and company metrics or information, but are limited to their customer base and don’t provide any sort of investing portfolio management outside of back office tools for venture firms.
AngelStat solves the lack of portfolio management tooling in early-stage investing by providing SaaS software that allows individual LPs and angels to track their deal flow and investments. Our initial target customer is an LP in several syndicates or SPVs on major investing platforms such as:
These target customers are also likely to have invested directly in startups via their own network or through investing clubs run by solo angels based in email as well, such as TheSyndicate.com, Backstage Capital, or Gaingels.
The Portfolio CoPilot for Angel Investors
Manage Your PortfolioMarket Analysis Tooling
Since June 2019, (and at the time of writing this thesis) I had made 85 investments in 65 companies and 2 funds (now over 100 investments in 80+ companies, via Loyalty Ventures) – mostly through syndicates – and have experienced the pain of not having the tooling and data I desired during the investment decision and due diligence process. AngelStat provides the tooling and data I wish I had when I began my early-stage investing career. As I continue this journey, I see ample opportunities to learn from not just my existing investments, but from trends hiding in my individual deal flow and from my anti-portfolio.
AngelStat helps to solve the problem of opaque deal flow analysis by providing investors with as much information as possible about the industry, VC trends, and company as possible so that investment decisions are crisp and made with high-confidence. We seek to use data to improve private investment outcomes because we believe in the entrepreneurial ecosystem as a vehicle to solve the world’s most challenging problems. I believe that if we can increase effectiveness of capital allocation we can influence the following outcomes:
- Increased likelihood of experiencing the beneficial societal outcomes envisioned by founders in their respective industries
- Improved opportunity funnel at a societal level due to an increase in jobs and available labor options
- Improved general access to wealth as a result of improved labor options
- Improved consumer choice – more brands exist to serve customer needs
Generally, I believe that an increase in investor outcomes will continue to fuel the next generation of entrepreneurs and further the important capitalist cycle in America.
Conclusion
AngelStat brings the data-driven focus and tools of institutional investment firms to retail limited partners (retail LPs). We want to provide investors and operators with the best tools to allocate capital, manage documents and deal flow, track investment outcomes, and understand the private world of venture capital, as only angels investors do.
My 2022 Financial Performance:
— Alex Cohen (@anothercohen) May 16, 2022
- Rivian holdings: -80%
- Opendoor holdings: -80%
- My other stocks: -30%
- 401k: -15%
- Startup investments: -??%
- Tesla Model Y: +18%