📕 Startup term you should know

Ever heard of Venture Scout?

Someone who sources good investment opportunities for a venture fund. Scouts usually get paid with a slice of the carry if the deal works out.

My insider scoop: Sequoia's scout program produced some of their best hits, including WhatsApp and Instagram. Being a scout lets you "double dip": invest your own money while also getting paid to source deals for a bigger fund. Naval Ravikant calls it one of the best ways to see dealflow, learn from experienced VCs, and build relationships that help your own angel investing. Scouts typically get 5-10% of the fund's carry on deals they bring in.

📰 Today's topic: "Let me know how I can help" is the least useful sentence in angel investing

Early in my career, a mentor gave me a piece of advice that has always stuck with me: don’t ask how you can be helpful, just be helpful. When it comes to angel investing, this is a lesson that bears repeating.

We ran an end of year survey with our community and one theme came back louder than we expected: people want more ways to help the startups they've invested in.

It’s great that the willingness is there. But from our experience, the challenge lies in the follow-through.

The problem is matching, not motivation

Say a portfolio company sends us an ask. They need someone who's scaled a support team, or knows enterprise procurement, or has done pricing for a marketplace.

We know someone within the extraordinarily talented Angel Squad community possesses the exact expertise our startup is looking for. The challenge is finding that person.

When we post an ask in a community channel, a bunch of people typically raise their hand. Figuring out which of those hands is the most qualified for the job is our job, and it’s more work than you think.

The 15% challenge

The truth is, in any VC community, only a small slice of people are actively seeking chances to work with startups.

My rough estimate for our community is under 15%.

We hear from that 15% constantly, which makes that group seem larger than they truly are.

But if we pointed an AI at our member database and asked it to find the best match for a portfolio ask, we’d likely get a list of people outside that 15%. They may possess the exact expertise we’re looking for, but they’re not the type to volunteer to work with our portfolio.

What this means for your $5k check

How can we fix this challenge of uncovering the right person for the right problem to ensure Angel Squad delivers the highest ROI possible to our portfolio?

Two suggestions come to mind.

First, we ask that you be in that 15%. It's a small number. Being visibly, repeatedly in it makes a difference.

In practice, that means responding when an ask goes out, even when you're only a partial fit. It means telling your investors what you're good at more than once, because we sometimes can be forgetful :)

Second, get specific enough to be actionable. "Let me know how I can help" puts the work on the founder, who is often the busiest person in the exchange. They now have to inventory your skills, guess at your bandwidth, and construct an ask.

Compare that to: "I've hired 12 SDRs in fintech. Send me your three finalists and I'll do screening calls this week."

Only one of those gets a reply.

Start smaller than you think

The best version of actually delivering value to the portfolio is fairly hum-drum. Somebody reads a portfolio company's update email, notices they mentioned a hiring gap in passing, and sends two names within an hour.

No coordination system required. No matching algorithm. Just somebody who actually read the update and acted upon it. Which is exactly what our founders need.

That’s usually all there is to it.

The difference is, most investors don't even read the updates.

What's the most useful thing an investor has ever done for a company you were close to?

– Brian from Angel Squad

🍫 A snack for the road: Come hang out with us in SF!

Join us for an exclusive investor demo day featuring the top startups from Orange Planet's Global Market Expansion Program (GMEP) — a Korean accelerator backed by Smilegate, one of Korea's leading tech companies.

​These founders have spent the summer in San Francisco immersing themselves in the US startup ecosystem, and now they're ready to pitch. You'll hear high-potential Korean startups deliver sharp 2-3 minute pitches, followed by Q&A and open networking.

​This event is designed for investors — come ready to engage, give feedback, and connect with the next wave of founders making their move into the US market.

Overheard in SF…probably

“We're not competing with anyone because the category doesn't exist yet. Neither do the customers, but one thing at a time.”