Comments on: F|R: 5 Reasons to Go All Angel à la Lookery

By: F|R: 5 Hacks For Closing an Angel Round | Zensible

F|R: 5 Hacks For Closing an Angel Round | Zensible — Mon, 22 Dec 2008 07:56:30 +0000

[...] week we offered you one founder’s rationale for taking money from angel investors, instead of venture capitalists. It’s a trade-off of sorts: smaller checks, but they often [...]

By: Meet FanSnap, Search Engine For Live Event Tickets - GigaOM

Meet FanSnap, Search Engine For Live Event Tickets - GigaOM — Wed, 15 Oct 2008 03:00:32 +0000

[...] of weeks back when visiting Boston, I met Andy Payne, one of the more active angels in Boston whose investments include Lookery. It wasn’t long before he started talking about his brand new start-up, FanSnap of Palo Alto, [...]

By: Angel Investment Journal - Angel Investing and Entrepreneur Blog » 5 Reasons why Angel money is better than VC

Tue, 30 Sep 2008 21:41:31 +0000

[...] from Angel’s. Lookery’s CEO, Scott Rafer (former CEO of MyBlogLog), talked about 5 reasons why getting angel investing is better than VC [...]

By: Counterpoint: It’s Time for Venture Capital – Now More Than Ever - GigaOM

Counterpoint: It’s Time for Venture Capital – Now More Than Ever - GigaOM — Sat, 27 Sep 2008 12:00:12 +0000

[...] Leinwand, Saturday, September 27, 2008 at 5:00 AM PT Comments (0) Recently two separate posts ran here that argued in favor of technology entrepreneurs who need early-stage money taking [...]

By: links for 2008-09-25 « National Angel Organization

links for 2008-09-25 « National Angel Organization — Thu, 25 Sep 2008 20:52:39 +0000

[...] 5 Reasons to Go All Angel à la Lookery – GigaOM But here’s what’s really interesting: Rafer and his cofounder, David Cancel, elected to raise the money almost entirely from angels, forgoing the traditional venture capital most companies would pursue at this stage. This is Lookery’s second funding event. In January, it raised a $1 million note, which converts to equity given in this deal. (tags: vc funding business angel angels) [...]

By: Scott Rafer

Scott Rafer — Fri, 19 Sep 2008 21:53:17 +0000

It’s far rarer than it needs to be. Too many entrepreneurs are ignorant of their options and willing to be herded like sheep by VCs and attorneys that just say, “It’s standard.” It’s the standard bad deal, but that counts for nothing when it’s a good startup.

By: Need Funding? Go Angel and 5 Reasons Why : East Coast Blogging

Need Funding? Go Angel and 5 Reasons Why : East Coast Blogging — Wed, 17 Sep 2008 15:01:01 +0000

[...] Another popular form of raising money is through angel investors. In an interesting post over on Found and Read they take a look at the latest round of finacning raised by Lookery, “an advertising and [...]

By: Well-Traveled Angels Back Dopplr Again - GigaOM

Well-Traveled Angels Back Dopplr Again - GigaOM — Mon, 15 Sep 2008 23:43:46 +0000

[...] money from an investor group led by well-known technology industry insider, Esther Dyson. It was an all-angel round of funding, something we’ve discussed on our FoundRead channel. Apart from Dyson, other [...]

By: F|R: 5 Hacks For Closing an Angel Round - GigaOM

F|R: 5 Hacks For Closing an Angel Round - GigaOM — Sun, 14 Sep 2008 16:01:31 +0000

[...] Hawn, Sunday, September 14, 2008 at 9:00 AM PT Comments (0) Last week we offered you one founder’s rationale for taking money from angel investors, instead of venture capitalists. It’s a trade-off of sorts: smaller checks, but they often [...]

By: Chris Yeh

Chris Yeh — Wed, 10 Sep 2008 13:56:05 +0000

Scott,

My comments on the need for a 1X liquidation preference is intended as general advice. In your particular case, we're talking about a friendly deal where the entrepreneur is a known quantity; I can understand why the investors would agree to the terms.

I think that co-sale + liquidation preference that only applies below a certain cash-on-cash return is a good approach to take, but is more entrepreneur friendly, and is thus (sadly) rare.

By: Scott Rafer

Scott Rafer — Wed, 10 Sep 2008 01:13:01 +0000

The comments on the crib sheet post, are tied in:

http://gigaom.com/2008/05/24/fr-crib-sheet-the-term-sheet-glossary/#comment-898624

@Venkat When entrepreneurs want a ton of cash to really go for it, the terms are fine. I just think they are overused terribly at the early stage with startup management who don’t really understand what they are buying into.

@Chris Yeh The Preferred need protection but they don’t need control as a starting point of the negotiation. A 1X liquidity preference isn’t at all necessary. There are a hundred ways to solve that problem. Unlike @Saul Lieberman I think a co-sale right is much fairer to all parties than a liq pref.

The mechanism that I like best is a co-sale right plus an expiring liq pref tied to a drag along, i.e. below a certain multiple of cash-on-cash return, the Preferred has a bunch of rights and a bottom line payout. Above that multiple, everyone gets paid solely proportional to share ownership and the Common rules the roost change of control decisions.

The reason to have a Preferred is to give out Common Stock options to new employees at a lower price than the investors paid.

By: Mark MacLeod

Mark MacLeod — Tue, 09 Sep 2008 14:10:21 +0000

We are going to see this more and more. Why? Entrepreneurs are increasingly unhappy with the VC model and experience. Given that its cheaper to start and run a company these days, entrepreneurs have choices. They can postpone raising big VC$. If and when they do it, hopefully they can do so on better terms.

By: Sarah Andersen

Sarah Andersen — Sun, 07 Sep 2008 04:58:28 +0000

angels are real entrepreneurs, venture capitalists are overpaid money managers

By: Jon S

Jon S — Sun, 07 Sep 2008 01:11:41 +0000

See the comment thread on http://venturebeat.com/2008/09/04/lookerys-ad-data-sales-business-crystallizes-as-it-raises-another-225-million/

Lookery is EVIL…

By: Baz Anderson

Baz Anderson — Sat, 06 Sep 2008 16:58:13 +0000

I was always curious about this type of business model. I have friends who've talked about this, and even contacted a few people looking for startup "Angels" with mixes success. It seems like Lookery has a good handle on how to set things up.

Maybe I should start up a company like Don't Eat Dogs inc. We could start a website to convince people not to eat dogs, and we can point to our incredible success in America as a selling point. If someone points out that eating dogs has never been popular here, I'd point out that in that market it would be foolish to invest in something that is dog-eating based. And that's why we started the company.

They would look at me funny and I'd just smile, but I'm so damn charming, I'm pretty sure I could pull it off.