CrowdFunding the Early Stage Marketplace vs. Angellist

CrowdFundBeat, By Elliott Dahan, While presenting the Early Stage Marketplace, I have been asked to compare ESM to Angellist.

Angellist is a great List of Angels that serves the interest of a select group of angel investors. Angellist presents a moderated list of startups for the benefit on one group – investors.

ESM is a global marketplace serving the self interests of all members of the early stage community: Sponsors, Companies, Partners, and Funders

Angellist is a subset (Angel investors) of a subset (Funders) of the total ESM community.

ESM believes that all early stage companies need both Funding and Validation.

1) Angellist does not support all levels of “heavy lifting” from Sponsors: Sourcing, Screening, Mentoring. Incubation and Angel. Yet, at any point in time, a Partner or a Funder may want to find a Company that has been sponsored at one of these levels.

2) Both ESM and Angellist believe in the importance of the “reference”, but Angellist limits its reference base to Angels and Incubators. ESM believes that the Funder and the Partner should be able to choose the type of reference it wants. Examples of some of the areas from which an acceptable reference can come are: Credible Local Organizations (Software Development Forum in San Jose or the CED in Durham, NC, Tie); University and Federal Tech Transfers, Competitions (Demo Days); Seed Money Mentors (Y Combinator, Tech Stars); Non Profit Incubators (NBIA, university incubators).

3) Angellist does not encourage the full range of startup -from one person with a powerpoint to a team with a launched product. Angellist still leans, quite heavily, on the traditional angel metrics.

4) Angellist does not have an operational model to facilitate collaboration between Partners (those companies and organizations with a commercial interest in the technology, products and talent of startups which support internal operating divisions) and Funders. VCs report that 75% of their liquidity events are with public or private companies and Partners provide the ultimate validation for any startup.

5) Both Angellist and ESM realize that 2/3 of Angel Groups Co-Invest (“Halo Report,” a joint project of the Angel Resource Institute, Silicon Valley Bank and CB Insights. March 2012). But, Angellist limits the Angels who can lead a Syndicate to those Angels it has already approved to be on Angellist. ESM encourages both a much wider range of investors to participate in deal syndication with a broad group of angels.

6) Angellists model is a linear transaction: money (angel or crowdfunding)-to-startup. ESM’s model is a dynamic marketplace where at any point in time any member of the early stage community can be either a buyer or a seller.

Angellist puts the Angel at the center of the investment. ESM puts the startup at the center of the Angel investment.