Top 3 Tools To Research And Track Startup Investments

In the startup world, there are no analyst ratings.

No audited quarterly earnings.

No P/E ratios, insider buy signals or technical analysis either.

Researching, investing in and tracking private startups requires a different set of tools.

Fortunately, there are a bunch of free and valuable services I’ve discovered over the years.

Let’s get started.

Tool No. 1: AngelList

Useful for: Due diligence, investing online, research, fundraising

AngelList combines elements of sites like LinkedIn and E-Trade. But it focuses exclusively on private companies (mostly early-stage startups).

The site, founded by veteran entrepreneurs and angel investors Babak Nivi and Naval Ravikant, has become an indispensable tool for early-stage investors.

One of my favorite uses for AngelList is evaluating co-investors. In other words, researching the other investors in a deal you’re looking into.

Say you’re considering an investment in a fictional startup we’ll call NewCo.

NewCo is raising $1 million. The deal’s “lead investor” is a fictional venture capital firm called Ludicrous Ventures. (The lead could also be an angel, or individual, investor. The process for investigating both is the same.)

The lead investor is important for a few reasons. First, they negotiate the terms of the deal. Second, the fact that they’re leading this round shows conviction. They believe in this deal. So our goal here is to figure out whether that conviction means anything.

The first step is to look into Ludicrous Ventures’ track record. The easiest way I know to do that is on AngelList. So we head to the AngelList homepage, search for “Ludicrous Ventures” and click to their profile page.

You can learn a lot about an investor’s history from their AngelList page. Their portfolio is displayed, along with other background information.

Let’s say Ludicrous lists 50 investments on their profile. Look for familiar names.

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Boaz Berkowitz 5 years ago Contributor's comment

Thanks Adam Sharp, great tips here. As a founder of a startup myself (TalkMarkets), I would love to hear what other ideas you have ofr attracting investors.

Adam Sharp 5 years ago Author's comment

I don't have too much experience from the fundraising side, but here goes.

Your AngelList profile looks good Boaz, but I'd add some traction #s and a deck. Also, they have a bunch of useful search features to find investors:

https://angel.co/digital-media/investors

There's also this old adage: "if you want advice from a VC, ask for money. If you want money, ask for advice".

:)

Boaz Berkowitz 5 years ago Contributor's comment

Thanks Adam!

Susan Miller 5 years ago Member's comment

Very useful, thank you. This is an area I'm looking to become more involved in.