AngelList Tips for Canadians

If you’re a Toronto startup trying to raise money, now might be the time to get on AngelList, at least according to Alex Norman. He’s one of the people leading the platform’s charge into Canada, and was recently at the DMZ to advise entrepreneurs on getting the most out of AngelList.

He says investors around North America are actively scoping out Toronto. But our city is different than the U.S., where more investors consistently write cheques. Many Canadian investors are a bit more erratic, and those who consistently do deals don’t usually publicize them. This is part of what AngelList is trying to change.

Norman’s goal is to create a public list of Canadian angels and what industries they want to invest in. His hope is that if you say “I’m a music startup” he can say, “You should connect with person X.”

While that’s going to take time, AngelList can still help your company today. Here’s Norman’s top tips for Canadian companies:

Mentality
AngelList is a good platform to top off your round. If you’re trying to raise $750,000 and have strong lead investors, you should be able to find the final $200,000–300,000 on the platform. While U.S. companies raise full rounds on it, Norman thinks that won’t be possible in Canada for the next few years.

Research
You can use AngelList to find investors and see what deals they’ve made in the past. Most investors on the platform have public profiles with this information. Use it to find people interested in your industry.

Your Profile
Norman says a good company profile includes:

• Links to all founders’ profiles;
• Key employees profiles filled out;
• Eye catching imagery;
• A clear explanation of the problem you’re solving and how you’re doing it; and
• If possible, list a couple customers or advisors

Don’t go too detailed on your profile. Have a concise message.

Your Thesis
Each company trying to raise funding writes up a short thesis about themselves. Even at a seed round, most investors want to see a strong thesis, team and go to market strategy. Most companies’ tech is their baseline, show what unique insights and market strategy you have. Think of what questions investors might have and answer them in your thesis.

Personal Connections
People are going to invest in you, not necessarily the company itself . The longer they know you, the more likely they are to invest. Don’t be afraid to connect with potential investors and build relationships long before you’re trying to raise. The more Norman knows a founder, their story and what drives them, the more likely he is to invest when the time comes.

Lead Investors
Having a Fortune 500 company lead your round can be negatively viewed by other potential investors, because these companies are often scared of disruptive tech, leading to them overvaluing your company, but also limiting your potential. If a giant company is your main investor, they probably really like you and may buy you out in the future. Having these players as a minority is a safer bet.

Post-Close
Investors look for how much time you’re giving yourself post-close to raise a next round. Most companies give themselves 18 months runway, but in Canada, Norman’s seeing companies listing only 12. A shorter runway makes it tougher to raise initial funding, because this runway is the time you’re using to create value for the next round.

After you raise funding, it usually takes 6–9 months to actually start seeing a difference because you have to hire people, then get customers, then show value you’re creating for those customers, and finally take another 6 months to raise again.