Last July, thousands of investors and Silicon Valley watchers received an email about a mobile app that is trying to become the “Uber of shipping.” Shyp users snap a picture of the item they want mailed, and a courier–the company calls them “heroes”–arrives to carry it away. The cargo gets packed at a warehouse and sent by U.S. Postal Service, or a private competitor like UPS.
The email, which included a link to Shyp’s slide presentation, explained the business model: offering reasonable prices by getting volume discounts from shippers. (In a juicy aside, the email mentions that shippers give Amazon a 90% discount.) As a result, it says Shyp generates a 20% to 50% gross profit per pick-up. The founders were looking to raise $500,000 in debt financing.
There are scads of companies right now calling themselves the “Uber of” some industry or another. And nothing in the LinkedIn profiles of Shyp’s founders, two Canadian engineers who met at another San Francisco startup the year before, would stand out to an investor. Most companies with this profile might wind up at a pitch-fest, or perhaps land a spot at an incubator. A lucky few might land an elevator pitch meeting with venture capitalists.
But this particular email was sent by AngelList, an influential startup investing platform. As a result, Shyp’s CEO and co-founder Kevin Gibbon says he received dozens of queries from investors leading to about 50 meetings. By September, the company closed on $2.2 million in equity funding. The major investors were a firm called Homebrew, which is run by former product guys from YouTube and Twitter, and a syndicate of investors led by Tim Ferriss, the hustling author of The 4-Hour Work Week who has invested in several prominent tech companies. After the Ferriss syndicate raised $500,000, he discussed the deal on his blog and, he says, another $250,000 arrived within 53 minutes.
“At the end we were turning away people we never thought we’d be connected to,” Gibbon says.
AngelList is one of a vanguard of firms–such as Y Combinator, Andreessen Horowitz, and Google Ventures–that is reinventing the future of startup funding. What began as a modest, though intentionally disruptive email list has grown to become the preeminent way for seed-stage investors to find opportunities, and for startups to connect with those investors as well as prospective employees.
AngelList’s “V for victory” icons now appear next to LinkedIn and Twitter share links on Valley bigwigs’ bio pages. At least 85,000 startups and more than 25,000 investors have posted profiles on the site. “If you don’t have a presence on AngelList as an investor or a startup,” says Michael Collett, a partner with Promus Ventures which has invested in AngelList, “you’re either hiding something or don’t know what’s going on.”
