By Alexandra Reid
Throughout his career, both in Canada and the U.K., Bryan J. Watson has been a champion of entrepreneurship as a vector for the commercialization of advanced technologies. As demonstrated by his concurrent roles as executive director of a number of non-profit emerging-growth venture-fostering organisations including the National Angel Capital organisation, CEO of Fusion and a director of Precarn Inc. and the Canadian Advanced Technology Alliance, Bryan takes an active role in the entire entrepreneurial spectrum from idea-generation to financing to liquidity event.
AR: How are entrepreneurs currently using social media to get their startups noticed by angels?
BW: In general, entrepreneurs are using social media such as Twitter, LinkedIn and Facebook for outreach both to angels and to the wider community. More specifically, they are using these channels to share information about their ventures and to generate buzz. Mostly, it is the web-based companies that are the early adopters of social media as an outreach tool, I find.
For startups, social media encompasses a wider range of online platforms, such as AngelList, Tech Crunch’s CrunchBase, and StartupIndex. These platforms are social in that they allow entrepreneurs to share information about their ventures with investors. On the investment-opportunity-intake side of things, sites like AngelSoft, unlike widely used social media platforms, are secured and closed systems involving only individuals in the angel capital community. Entrepreneurs and investors are using these platforms to share and receive business information and manage deal flow.AR: What grabs your attention when you review a startup’s social media accounts for business opportunities?
BW: I expect web-based companies, which live and die by their traffic, to have a good grasp on social media best practices. To get a barometer of the strength of a company, I look at their social media presence, participation and aptitude. For example, I will look at the relevancy of their tweets, Facebook messages and how they are using the channels to engage their communities. If an online company isn’t using these tools effectively, it is a red flag for me that the business will not survive if they have a community-dependent business model.
AR: What are your preferred social media platforms for engagement with entrepreneurs and why?
BW: My favourite platform is AngelSoft, a secure system that helps angel groups manage deal flow and collaborate with other investors. Traditional social media platforms are great for getting messages down the pipeline and so should not be discounted. However, as most angels and angel groups receive masses of messages daily, it is far more effective from a time-management perspective to use more focused online social forums that uphold the value of referrals. Most angels and angel groups don’t like receiving unsolicited emails through platforms such as LinkedIn, for example. AngelSoft requires entrepreneurs to develop a profile, which is effective as an executive summary. Trusted reference sources are distinguished and entrepreneurs who garner a referral from trusted sources get noticed. This is a far more effective system for busy angels.
AR: What are the best practices for entrepreneurs to engage with angels through social media?
BW: My first piece of advice is that entrepreneurs should really spend time on their AngelSoft applications. Grammar and spelling count; it is not rocket science. Investor relationships can last longer than marriages, so approach your application like you would your first date. Make sure you are reflecting yourself and your company honestly and accurately. Lots of entrepreneurs look at applications as a tedious, boring and insignificant task. However, people like me send AngelSoft applications directly to appropriate angels who regard them as critically as executive summaries. Remember, you want to put your best foot forward and this application is generally that foot.
My second piece of advice is to always follow up with angel groups directly. Make sure the right people have your application and know what steps are next in the deal flow as steps can vary by group. Make sure your references are in order and your executive summary is accurate before you follow up. Persistence is key.
AR: How far should a conversation between an entrepreneur and an angel go on social media before it is transferred to email and telephone?
BW: Once the initial contact is made and reciprocated, with the information submitted through the channels the angel group prefers (like Angelsoft), I generally think that e-mails and telephone are fine, but this varies depending on the group. Certainly, if you have heard nothing from the group after submitting your application and a week has passed I would give them a call.
AR: Do you have a case study of a startups’ exemplary use of social media for entrepreneurs to engage or secure angel capital with an Angel?
BW: It is hard to say, though I have heard of some cases where entrepreneurs built up such a buzz on social media that it helped them raise capital – in other words they built a brand that investors believed in. I think the best examples are companies that have raised money using things like Angellist or Angelsoft. Almost all the funded companies I know of in Ontario, if not Canada, have an Angelsoft profile. Few have used things like Angellist, but examples are becoming more regular.