It is a familiar dilemma for entrepreneurs experienced in early stage financing: raise a large amount of money from each of a small number of investors, or a small amount of money from each of a large number of investors. What do you do when someone offers you 1% of the total amount you’re trying to raise – are you potentially fragmenting your cap table, causing headaches for yourself down the road, or are you making a smart strategic play?

I believe that when it comes to your investor list, bigger is better.

My latest venture is Influitive, a private, venture-backed software company building the advocate marketing category.  As of today, Influitive has more than 50 shareholders, and I view that as a valuable asset for the company. I remember TechCrunch picked up on our “unusual” $3.75M seed round (their word) when they covered our seed financing in August 2012. It was called unusual not just because of the jumbo size of the seed round, but also because of our use of AngelList, the social network for fundraising, to raise two simultaneous components to that round, one debt and one equity. We raised $1.4M more than we planned on from shareholders around the world, and in doing so created a template for other entrepreneurs to raise a double-headed round on the platform.

For Influitive, AngelList is so much more than just a fundraising platform. It is a powerful tool for increasing the diversity and utility of the startup shareholder base. It helped Influitive form a shareholder army; the ‘army of the invested.’

I first discovered the power of a diverse shareholder base years ago when one of my customers asked to invest in Eloqua, for which I was CEO. I thought that it was a great idea and allocated $250K of a $13M raise for other people who could help, including early employees, prominent founders and VCs acting as individual angels. Most valuable were the investors based in Europe and Asia, who helped us expand globally years ahead of our competition.

We have employed the same approach at Influitive, raising money internationally – from both US coasts, the Midwest, Canada, Europe and Asia. Using AngelList as our power tool, we have attracted shareholders in key markets, verticals, and strategic partners to help us grow more scalably.

Far from creating an unwieldy shareholder structure, our intentional effort to attract a broad, diverse set of investors has delivered incredible results at both a strategic and a very practical level.

I could share countless stories of opportunities that have come our way through these stakeholders. Take Chris Fralic, a seed-stage VC at First Round Capital, who has lent his office in New York to provide a local presence for us, vets our leadership candidates and invites our leadership team to fantastic conferences to improve our network. Then we have people like Cindy Padnos, the founder of micro-VC Illuminate Ventures, who has access to a network of some of the most powerful women in technology, of which we have availed ourselves to close key deals. Or Sizhao “Zao” Yang, the creator of the iconic Farmville game and now CEO of LaunchHub, who guides our product managers and designers on building habit-forming software.

Once you onboard these stakeholders, it is important that you keep them engaged in the operation of your business. My team provides access to daily reports on our progress to the shareholders who want them. We share every customer win as it happens, including key insights into the problems/pains we winning against. Our own software, AdvocateHub, provides shareholders with an engaging way to lend critical support beyond financing, such as referring high quality leads, or sourcing candidates – ensuring that we get the full value from our shareholder army.

This kind of unprecedented visibility helps keep investors closely aligned with the organization and as a founder, I am both reassured and motivated by their active engagement.

Challenging Conventional Wisdom

Conventional wisdom holds that AngelList is not a great place to source your first shareholders, and I challenge that. I am now on my third round using the platform; in the previous two rounds, some of our early lighthouse investors came to us through the service.

Conventional wisdom suggests AngelList is useful for seed, and perhaps Series A fundraisings. But I have just oversubscribed a convertible debenture bridge to a Series B as of this writing, raising $4.9M (on a target of $4.5M), including several strategic investors either sourced or accelerated using the AngelList platform. Those investors include co-founders of Hubspot, Marketo and Hootsuite, and the CEOs of Gainsight and Constant Contact; invaluable as active advisors and door-openers for us.

Conventional wisdom would suggest that raising money on a social network does not allow for the entrepreneur to properly target his or her ideal investorswhen fundraising. The reality is the opposite: entrepreneurs have fine-grained control over which investors they target based on detailed criteria, primarily by controlling what information is shared with each prospective investor. Moreover, the existing advisor and investor network can be leveraged to gain an audience with the most desirable investor candidates.

Conventional wisdom says that it is too difficult to manage a lot of shareholders, and entrepreneurs would do well to keep their cap table short. But the rapid adoption of technologies like AngelList, e-signatures, and web conferencing have pushed those concerns aside, making it easier than ever before to quickly raise a diversified round and manage shareholders over time.

Given the tools now available to help manage shareholders, and the reduction in effort needed to manage a larger shareholder base, the strategic benefits bringing more investors to the table early far outweigh the tactical costs of doing so. I foresee an increasing number of companies forgoing standard one or two-party fundraisings and instead raising armies of shareholders – and gaining decisive strategic advantages from them.

Mark Organ is the founder and CEO of Influitive, helping companies mobilize their advocates to increase referral leads, reference calls, and social media participation. His early insight on the future of marketing automation led him to become the founding CEO of Eloqua, a maker of marketing automation software, which Oracle acquired in 2012 for $871M.