I was reading about a startup on AngelList this morning. The deal is being syndicated by Paige Craig of Arena Ventures, a seed and growth stage venture firm. The deal details included the recording of a video conference call where the startup’s founder described his business and responded to questions from syndicate members. The video call had taken place live the prior night and was made available asynchronously to other syndicate members.
I think that this is a great idea for both founders and syndicate members.
From the perspective of founders, it allows them to differentiate themselves from other founders raising on online platforms. Raising money by telling your story and having a two-way interaction with investors is more effective than a one-way communication channel where you feed investors with PowerPoint presentations and text.
It’s as close as you can get to a face-to-face chat in real life, while being much more scaleable as it allows the founder to talk to multiple investors at once. The scalability of this communication medium is very important as it wouldn’t be practical for the founder to speak with over 50 individual investors each contributing a few thousand dollars, as is often the case on online fundraising platforms.
From the perspective of the syndicate members, it allows them to see what the founder is like as a person. What’s their body language like, and does their motivation come across? These are very important predictors of how well the founder will be able to recruit and sell, and they’re much easier to evaluate through video than through written communication.
The video call is also a platform that helps syndicate members learn from the founder’s answers to the questions of other syndicate members. Another investor may be approaching the startup from a very different perspective and their view may help enlighten your own.
I don’t know if Paige is the first to try out a video conference call on an online fundraising platform, but it’s the first time that I came across the approach. I think it’s very effective. Great work Paige.