I asked Liz Lindsey, Executive Director of New York Angels, and Jon Zaikowski, Assistant Director, to share some details on New York Angels’ tech stack and use of analytics. HBS Alumni Angels of NY (which I founded) and New York Angels are the two biggest angel groups on the East Coast, to my knowledge. This is part of PEVCtech‘s series on investment management firms’ tech stacks.
(I met Liz and Jon when I presented recently to the New York Angels on VCs eating our own dog food: Using technology and analytics to make better investments.)
Q: Please give an overview of New York Angels.
We are one of the world’s largest and most active single-chapter angel groups. We have over 140 members who have invested over $145m personally, in 317 companies, with 58 exits. We were founded in 2004 by David Rose, Founder & Executive Chairman, Gust.
Q: Can you please share your major tech needs (e.g., CRM, marketing tech, back office); the tech providers you’re currently using; and their strengths and weaknesses?
Regarding our tech, we use the tools listed below on a fairly regular basis. There are some others that we use but aren’t particularly interesting I think (Squarespace, Google Drive, Adobe Acrobat, etc.).
- Gust
- Mailchimp
- Trello
- Google Groups
- Doodle – for scheduling meetings
- GIMP – cross-platform image editor
- Seamless Docs. This is essentially a DocuSign alternative that is a portfolio company. We mostly use it for collecting votes and gathering signatures on documents. This was an investment before my time (Jon) at New York Angels, which was acquired by GovOS. We still have access to the legacy platform and use that.
- Knack – a design-it-yourself, relational database recording membership and investments.
- AngelSurvey (our own custom site for recording member interest after pitches). AngelSurvey allows members to mark if they will 1) pass on a company, 2) attend a follow-on 2 hour Discovery meeting, or 3) help lead the deal. They can also provide feedback, plus go back and edit their comments if they would like to after submission. It also provides us a “big board” capability where we can get an overview of a meeting. Below is a screenshot of an AngelSurvey big board from one of our recent meetings. It’s very helpful to pull this up at the end to discuss which companies are moving forward and which aren’t, and let people make any last-minute changes, and to recruit deal leads if a company has lots of interest but no one stepping up.
Q: Are there tools you encourage new members to use?
Just the tools listed above that we onboard them to, as part of joining the group: Gust, Google Groups, Angel Survey, and Knack accounts to access portions of our database.
Q: What are your membership criteria?
Preference for experience in angel investing; living in New York or visiting it often; functional expertise in various industries in which our members invest; can give more than 10 hours a month to the organization. Commitment to invest $50k in companies brought by NYA to its members in the first 18 months, $50k every 12 months thereafter.
Q: I imagine you periodically have people joining not because they have cash to invest and want to lock it up in an illiquid, high-risk investment, but because they want to network with angels. How do you assess if someone is joining for the right reasons?
Our membership committee has a 1-2 month, multi-stage evaluation process which ensures potential members are a good fit for the group, and vice-versa.
Q: I’ve built a collection of data providers to assess potential members’ capacity to invest; I’ll send it to you. How do you create and track due diligence committee groups?
All substantive deal evaluation is recorded in Gust and visible to members interested in that deal. Due diligence is conducted by volunteer deal leads and interested members.
Q: What tech tools do you find helpful for expediting the stages of due diligence, both institutionally and via each angel’s own due diligence process?
Gust for timely communication to all interested members in a particular opportunity, and our intern analysts use Pitchbook for initial diligence on similar companies, market size, and other related topics.
Q: Managing the subscription process for angels can be tricky. Do you have a technology solution in place? (Versatile VC uses FlowInc, in which I’m an investor.)
The investors wire the money themselves. Our members are investing as individuals, not through us as an organization or (typically) through an SPV.
Q: Do you offer your angels any technology tools to support portfolio construction for direct investments?
No.
Q: What are your unmet technology needs? Places in your organization where you’re seeking a solution and haven’t found an appropriate one? These may indicate room for Versatile VC to build or invest in a startup addressing that need.
Better hybrid meeting capabilities. We have some good tools now, but even with those there are audio and visual issues sometimes in meetings (picking up background noise, presenters not being visible always, etc.). Another need would be a data platform like Pitchbook or CB Insights that aren’t prohibitively expensive for angel groups.
Q: A huge amount of valuable data flows through your pipes: about applying companies, companies which win investments, the angels’ investing patterns, and so on. What are you doing to capture that data and mine it? Can you share any patterns you have identified?
Every year, our Executive Director Liz compiles an annual report of our members’ investments and shares the insights at our annual meeting. Things like which industry categories received the most investment dollars, median valuations, stage of companies, founder demographics, and other topics. We keep this information internal, but we do report the raw statistics to the ACA which publishes an Angel Funders Report – you can find the 2021 Report here. One pattern we are seeing is that our members are investing increasingly more follow-on rounds for existing portfolio companies.
Q: Do you see any room to use AI to exploit your dataset? If so, what are you doing to move that forward?
Not really, and haven’t heard any other angel group discuss it either.
