Secondly, Angel Investors:
Once a products gets to some proof of concept, anentrepreneur can raise seed funding from an incredibly wide range of sources.Those that are either connected or lucky can solicit checks from family, friends,former bosses and colleagues, or they join incubators (more on this below), orreach out to relatively obscure or more well-known angel investors, all the way upto small institutional funds, what
some people refer to as “Super Angels” or “MicroVCs,” or websites dedicated to pairing investors with investment
opportunities (more on this below). The flood of early-stage capital has triggeredsome venture capital firms to also invest in the seed stage, where they have tocompete directly with smaller funds or vehicles, though a small handful of firmshave resisted and focused on Series A-style investments.
Third, we have AngelList:
Simply one of the most disruptive forces to theventure industry, the folks behind
have created extremely useful social
software that pairs investors with investment opportunities. For angel investors,AngelList provides an asynchronous way to scout, monitor, track, andcommunicate with potential investment; for startups, the system provides anopportunity for them to network, build reputation and good signals, and connectsthem to a wider range of potential funders. The disruption AngelList provides toventure capital is that the system could theoretically be used for larger Series Aand B fundings, and in some cases, probably has. It remains to be seen if it canscale across to this level, but given how much it has accomplished in a few years,
it’s not out of the question.
Fourth, we have Kickstarter and crowdfunding:
For some particular startups
that aren’t able to secure seed funds, either from angels, super angels, angel
-focused software, or venture capitalists that make seed investments, they canleverage crowdfunding platforms like
to tap into an even wider poolof available funds. And now with the JOBS Act, which will
forcrowdfunding of certain startups in certain situations, new companies can nowraise small amounts of money from many different people, just as a politicalcandidate may use small online donations from a large base to raise funds.
Fifth, there’s Y Combinator:
While there seems to be an incubator popping upweekly nowadays, the system, network, and brand built by the partners at