Paperboy
How angel network operators share startup updates with their members
Daily Chores
As a kid growing up in East Texas, one of my daily chores was to pick up the newspaper from the driveway. On the weekends, I’d watch my dad sort through the ads, cut coupons, and read through every word of the sports section.
I had no idea how the information contained in that newspaper was collected, prepared, and delivered to my driveway. And honestly, it didn't matter to me or my dad. All that mattered was that we got consistent access to those coupons and to the latest happenings with the Rangers (let's just say the Kazlow family is very excited about the World Series so far).
Most angel investors are much the same when it comes to startup news, and that’s the focus of our discussion today.
The Observer Express
Don’t have time to read the entire post right now? No worries, here are the main points:
Aggregating startup news does no good unless it is shared with network members.
The best way to share updates with a community must be aligned with the chosen system design, which informs selection, cadence, and methodology.
There are three basic methods for sharing updates with members: announcements during events, inclusion in regular communications, and on-demand access via a consolidated source.
Angel Ops Step 5: Monitor, Supporting Job #2: Share Updates
As a quick refresher, Angel Ops, which I introduced in this post, seeks to map an answer to the following question: What does the process at a world-class angel network look like? Angel Ops is focused on the backend process of running deals and groups the workflow into five core steps. Last week, I introduced the first job within the final step: Monitor, which is focused on helping community members stay up to date with the status and performance of each deal, which often drives future opportunities for investment.
Step 5: Monitor
Job: Regularly consolidate and distribute investment status updates.
Progressive Outcome: Follow-On - Members consider investing in following rounds, driving re-engagement with the network at a future date.
Within each core step, there are 3 “supporting” jobs-to-be-done that contribute to the primary job. This week, we’ll explore the second supporting job within the fifth step: Share Updates.
Alignment
Tracking company metrics, collecting information about the latest portfolio company news, and building a great information aggregation system is pointless if we don’t share our findings with members.
So what’s the best way to “Share Updates” with our community?
First of all, our answer to that question must align with the system design for Cadence, Selection, and Methodology that we’ve selected. This involves addressing 3 key questions: Which startups are we going to track? How regularly do we want to review each deal? What metrics do we care about?
For example, if we’ve decided to review the status of portfolio companies once per year and track major milestones, our approach to member communication is likely going to be best suited to some kind of annual update. In contrast, if we elect to take a more engaged approach by updating 12 metrics each month for every company that is presented to our members, we can and should pass along that information in a more regular and engaged format.
Three Styles
In my experience, there are three basic ways to share updates with network membership, and they’re each characterized as either a “push” or “pull” method. There’s no one “right” approach, and I’ve seen communities rely on varying combinations of these three methods with great success.
Announcements During Pitch Event
What it’s best for: Major updates from portfolio companies, deals in diligence, or other important news.
This method, which is a form of “push” communication, involves allocating a few minutes during each pitch event to share important company updates with community members. This event is typically the network activity that receives the highest level of member engagement, so it’s an ideal environment to share the latest news.
Regular Communications
What it’s best for: Distribution of recent updates from portfolio companies, deals in diligence, or other current news.
This method, which is a form of “push” communication, involves including a “news” section in the network’s regular digital communications. Many groups send out a regular newsletter on a weekly, monthly, or quarterly basis. A section aimed at sharing the latest news is typically of great interest.
Consolidated Source
What it’s best for: Providing consolidated access to all updates from portfolio companies or deals the network is following.
This method, which is a form of “pull” communication, involves creating a centralized location where all the information the group collects on companies being followed lives. This makes it simple for members to access whenever they please.
Where to Start?
My recommendation? Start with option 3: build out a trusty spreadsheet or shared folder. Spend a few minutes organizing and structuring it in a way that makes sense to you and aligns with the community’s needs. Then, every time you receive an update from a founder, load it into that central repository. I think this strategy naturally dovetails into making other forms of communication much simpler. Instead of parsing through dozens of emails, everything is in a central location and can be easily sorted through and shared with members.
Looking for a more robust system? Shoot me a note - I’d be happy to share about some of the more advanced tools I’ve seen work well.
Final Thoughts
Collecting news about startups of interest to an investor community is only valuable if that information is also shared with community members. Ultimately, the right system design and communication style should look a bit different for each group. However, thoughtful consideration of the options we discussed today can benefit any community leader and help level up the experience for every single member.
What do you think?
How does your community share updates with members about the startups on their radar?
Weekly Observations: 3 Lessons Learned
In-person team meetings are worth the extra effort.🍽
This week our leadership team met over dinner to work through several key issues. We normally meet virtually since all of us are in different cities, but the impact of being in person together for this one was palpable. It was so much easier to connect on a personal level and our creativity levels were noticeably higher than usual. Well worth the extra effort and cost.Unreasonable valuation = dead deal.☠️
A mistake I’ve seen founders make again and again is setting the company’s valuation way too high from the start. Valuation is one of the first things that investors look at, and if it’s outside of a “reasonable” range, interest dies before they even get a chance to look at the company. I think founders tend to make this mistake either out of ignorance or out of a desire to set a strong negotiation anchor, but it backfires every time I’ve seen it happen. I realize valuation is a tricky, nebulous thing, but the key (as with any “pricing” negotiation) is to identify that “reasonable” range and resist the temptation to overprice.Competitive hack: focus on a specific region📍
This week I attended the Houston Startup Ecosystem Summit hosted by Dell for Startups at The Cannon. While there, I met a few companies claiming to be “the only X company focused on doing Y for Houston.” I found myself believing them easily. This is a perfect example of creating a local blue ocean inside a sea of red. Even if the service is similar to what is offered in other communities, localizing a product or service is immediately differentiated and defensible in the eyes of the market.
Thanks for reading, have a great week.
-Andrew
If you enjoyed this post, please share it with a friend, colleague, or anyone else who may benefit.
P.S. - I recently finished creating The Angel Network Toolkit: 90 Resources for Cultivating a Thriving Community of Pre-Series B Investors, and I’m sharing it with anyone who refers a friend.
How did I do this week?
About Me
I cultivate flourishing.
I'm also the CEO of PitchFact, where we help angel networks conduct efficient and collaborative diligence. I'm a proud husband, aspiring father, and grateful friend. My love languages include brisket, bourbon, and espresso.