Updated
RaiseCapital is a new Web site that lets entrepreneurs submit their business plan and capital needs, in hopes of drawing attention from a VC.
Based in Port Washington, New York, the company allows both start-ups and existing business to submit pitches.
For $29/month, an entrepreneur can post a text description. For $39/month, they can also post pictures. For $49/month, you can include video.
Right now, there are few good-looking prospects. There are only two internet companies, one of them an “experience gift company,” boasting a $250 billion market (it is also featured on the front page), which is questionable.
This may be kind of like a dating site. Many folks have too much pride to join, fearing such sites are mainly for losers. If a VC can’t find a good start-up without having to go to a public meat-market to find it, that doesn’t speak too well of his or her sourcing skills. If a start-up can’t find a respected investor through their own dogged efforts or advisors, that may also saying something about the start-up. There are exceptions of course, but they are exceptions to the rule.
We welcome any feedback you may have on this idea.
Update: Chief executive Richard Singer just in touch, and wanted to clarify that this is not just for targeting VCs. It is for any business, from those searching for their first dollar to those simply seeking patent advice. Singer said he has invested “six figures” into the business.
8 Comments
-
Pran Kurup said:
Is this website/company venture funded? :-)
-
Chris said:
I reckon the business model is back to front for RaiseCapital. Wouldn’t it be better to charge the investors to access the detail, in order to attract the most ads? Or to charge a CPA fee, to either or both parties?
Maybe there’s room for a sort of Web 2.0 stock market, where angels / VCs can scan the startup/early stage horizon and buy into young companies?
That would make sense from where we’re sitting: there would be liquidity so we’d get the best deal, while investors would get a clear picture of the market. We’d be up for a slice of that. Beats eBay, as a platform for full or partial divestment.
-
Chris Yeh said:
As an investor, I’m skeptical of this kind of site. Selection bias clearly applies…the best entrepreneurs don’t need to expose their ideas in public, which means that the best investors would avoid something like this like the plague.
What would work is some kind of LinkedIn group for angels, so that entrepreneurs could find a better way to be personally introduced to investors.
-
TPeters said:
Chris Y: If by “best entrepreneurs” you mean those located in the Valley or to a lesser extent NYC, then I might agree. However, getting VCs to look outside their own backyard and/or invest in people they have not invested in previously, generally doesn’t happen. A CA mailing address does not a good entrepreneur make. If an entrepreneur bares all in their post, then yes, that would be a warning flag. I just wouldn’t throw the baby out with the bath water.
-
Brock Blake said:
Matt,
Interesting article. Your comments about VCs finding good deals and startups finding VCs would seem fitting; however, I don’t believe that is the case with angel investors. The angel community is very fragmented and inefficient — which makes these types of services very valuable.
We launched our matching service (FundingUniverse) about 1.5 years ago and have over 10,000 registered startups and 750 accredited angel investors. We have worked with some of the most legitimate angels and angel groups across the country including:
-Tech Coast Angels
-Band of Angels
-Sandhill Angels
-Angels Forum
-South Florida Angel Fund
-And more…Deals have been done and connections are made daily.
Finally, I like Chris’s idea about the LinkedIn group for angels — we’re working on that! :)
And “Yes” — I am involved with FundingUniverse.
-
Dylan Peterson said:
I’m involved with the start-up community in Seattle and I’m currently raising funding for my own start-up: CharterBusAmerica.com (e.g. Expedia for bus rentals).
I think the concept of these online matchmaking sites is great. In fact I think any dissenters speaking out against such new tools are ignoring the fact that the start-up environment has and is changing. As we all know the internet and other enabling technologies have lowered the bar to allow an entirely new volume of entrepreneurs and start-ups to enter the scene. There is more demand for angel investors than ever before and more start-ups for angels to choose from. Sure the current most likely way for an entrepreneur to raise funds is through his network. But can’t it get better? Can we not all improve the process?
There are some 7 angel groups in Seattle that help filter through the start-ups out there to bring “the best ones” in front of investors once per month. That helps, but it doesn’t get close to satisfying the supply and demand that exists between angels and entrepreneurs. Online matchmaking sites are a great tool to help increase the chances of the right investors connecting with the right entrepreneurs.
That said, execution of these sites remains to be seen. There is definitely an issue of critical mass and convincing investors and entrepreneurs that there are credible deals to be made that could begin from a connection online. And who better than a nation of risk taking angel investors and hungry entrepreneurs to try something new.
- Dylan Peterson, CEO, Charter Bus America
-
click here said:
I see we share a common interest! Excellent job on the website!
