Heaven Sent

David Rose’s AngelSoft Launches an Investor/Startup Matchmaker, But Can It Compete With AngelList?

david s rose3 David Roses AngelSoft Launches an Investor/Startup Matchmaker, But Can It Compete With AngelList?

Mr. Rose

Apparently you don’t need to be a startup to attempt a pivot. Back in March, Betabeat told you about mounting exasperation among local entrepreneurs toward New York Angels, the dotcom legacy investing group (circa 1997) run by its venerable chairman David S. Rose. At the time, Mark Birch, an independent New York angel investor, told us, “The NY Angels process is broken, because their model has stayed the same, while the environment has changed.”

 

Now, it seems, Mr. Rose is trying to adapt to these modern times through AngelSoft, the New York company he founded in 2004 to make software for investors to help them manage deal flow and collaborate with investors.

As Bloomberg reports, AngelSoft is launching an online marketplace to hookup potential investors with the right  to entrepreneurs and hoping “financial matchmaking” ensues. Along with the pivot, AngelSoft will change its name to Gust. See, thinking like a startup already.

Bloomberg says the matchmaking function is available to AngelSoft’s 150 VC funds and 35,000 angel investors, although it doesn’t specify how many of them are actively using the software. The idea is that investors will use the software to seek out new opportunities, track portfolios, and weed through requests. Gust will also have features for startups to privately post their progress and manage relationships with investors.

It’s still debateable whether investors and startups will bite, especially considering competition from platforms like AngelList, more closely associated with the current funding landscape and without the cumbersome legacy associations. AngelList founder Naval Ravikant told Bloomberg that 12,000 startups have applied since he launched in February, 2010, including 68 just yesterday. But perhaps the better question might be whether a standardized online platform can compete with the proliferating stream of hackathons, incubators, and accelerators that help expose investors to startups and vice versa. At least according to Compete’s numbers, traffic for AngelList appears to be down significantly from last July.

Follow Nitasha Tiku on Twitter or via RSS. ntiku@observer.com

Comments

  1. David S. Rose says:

    Part of the challenge with Big Ideas is that they often don’t fit comfortably into existing paradigms. While we appreciate Bloomberg helping to spread the word, unfortunately they got the story wrong [sigh]. Gust is NOT a matchmaking service, and is NOT competing with AngelList. We’ve never said we were, the launch release doesn’t say anything about it whatsoever, and the FAQ on the site itself explicitly says that we are NOT a matchmaking site!

    Instead, Gust is an infrastructure platform that underlies the global early stage financing world. On one level, it provides a completely new set of tools for entrepreneurs, enabling them to create a powerful, customized, access-controlled, private web site specifically designed for effective relations with current and prospect investors. On another, it provides a new set of tools for individual angel investors to manage their investments, and an enhanced set of institutional-grade tools for venture funds and angel groups to manage their deal flow pipeline and portfolios.

    But the Big Thing is neither of those tool sets; instead, it’s the fact that they are both connected under the hood. By creating a truly universal platform on top of which *every* entrepreneur, angel investor, VC, accelerator, business plan competition and entrepreneurial support organization can interact, Gust is fundamentally changing the world of startup financing. Unlike Angel List, with which we do not compete (and which, by the way, IS specifically a matchmaking service!), Gust is much more broadly connected, with 10x the number of company profiles, and 25x the number of angel investors.

    Gust is not a pivot (as we define it in the VC world.) It is, instead, the next generation of a long-term plan, which required over seven years of business and partnership development in the investor and institutional community before we could launch it. The best indication of this is the extensive list of partners, from every point on the entrepreneurial finance spectrum, supporting our launch this morning. A small subset, in no particular order, are:

    The Angel Capital Association, the National Venture Capital Association, the National Association of Seed and Venture Funds, the Community Development Venture Capital Alliance, the New York Venture Capital Association, the World Business Angel Association, StartUp America Partnership, the US Department of State Global Entrepreneurship Program, Microsoft BizSpark, Young Entrepreneur Council, the Founder Institute, Ashoka, Astia, SOCAP…and their equivalent organizations in Canada, Australia, New Zealand, Ireland, France, Portugal, Spain, India, China, and dozens of other countries.

    I would be delighted to provide complete details and background about what we’re doing to anyone who is interested. Just ask!

  2. JohnT says:

    Too bad that the transition is plagued with technical issues.  I have spoken with many who are simply locked out of the system with no tech support contact and no idea when they will be able to access it.

    1. David S. Rose says:

      As you can imagine, a change like this is non-trivial, particularly since it involved both a functional switchover which began last weekend, and a complete branding change which had to wait until the  public launch. The result is that some Angelsoft users on the investor side had trouble accessing the system yesterday from links that were in the process of transition, although most of the entrepreneur-side users seemed to be OK. Compounding the issue is that we’re still a small company, and much of our support team was in California for the launch. We are currently focused on working through all the support tickets, and hope that we’ll be up to 100% by the end of today. In the meantime, anyone who is experiencing difficulties can email me directly at david [at] gust [dot] com, and I’ll be sure that the issue is directed to the right person.

  3. Anonymous says:

    The biggest win here for Gust is that the company will no longer be confused with AngelSoft toilet paper.