AngelPad, the startup accelerator program founded back in 2010 by ex-Googler Thomas Korte, is today releasing new data about the progress its companies have made to date, as well as funding aggregates for those participating in its program. The announcement comes ahead of Thursday’s application deadline for the Spring session.
Korte says that increasingly, AngelPad companies are not announcing funding publicly. Because of that, sharing the incubator’s aggregate numbers is one of the ways it can demonstrate its growing traction.
“It’s almost like the more money [the companies] raise, the less likely they’re willing to announce it because it’s a competitive advantage if no one knows exactly what they’re working on and no one knows how much money they have,” Korte explains of the startups’ decision to stay quiet. “Fundraising [announcements are] good for the ego, but it doesn’t really help your business,” he adds. The exception, of course, being that fundraising announcements can help with recruiting or for getting on the radar of VCs who are tracking seed stage investments to know when companies may need to raise a Series A round, he notes.
Since October 2010, AngelPad has seen 62 companies participate in five sessions, with last year’s spring and fall sessions among the busiest with 22 companies selected from around 4,000 applications. “It has become incredibly difficult to get into AngelPad, and probably the same for the other top incubators,” says Korte. Comparing 2012′s applications to those in 2011, he says that many now include “fairly mature” companies that have been around for six to eight months, and founders who are coming out of really good companies like Google. ”It’s not like this post-college crowd any more,” he says of those who are now applying to incubators like his.
In 2012, AngelPad’s 62 total companies raised $56 million, which is on top of the $25 million they had raised in 2011. For comparison’s sake, in December 2011, Korte told us that AngelPad had helped 37 companies total, 31 of which had received funding. 2011 had been a big year for AngelPad, incidentally, as 29 of those 37 companies had emerged from the program within the year.
Another thing that has changed is the average funding companies receive. In 2011, deals often fell between $250,000 to just over a million, but in 2012, the scope is much larger. “If companies are raising money now, they’re easily raising $2 million dollars,” Korte says.
In November 2012, AngelPad held its fifth Demo Day at its downtown San Francisco headquarters, which featured the twelve startups in AngelPad’s Fall 2012 class. Korte says that already, three of these companies have raised over $6 million in aggregate, but can’t say which ones because the funding is not yet public. “If investors see companies they like, they’re really putting a lot of money towards them,” he says.
And from the session before, when AngelPad had announced its companies had raised $10 million, the total ended up being almost $13 million when the funding rounds closed, we’re told. Some of the AngelPad companies Korte could talk about having raised in 2012 include MoPub, Crittercism, Locbox and Vungle.
For those unfamiliar with AngelPad, its program provides companies with ten weeks of mentorship, and $20,000 in seed funding to help the founders get their products off the ground. It also extends support after Demo Day into the first year – the toughest time for a new business. Its alumni network now includes some 150 or so founders.
In 2013, Korte says the incubator, which has often focused on B2B companies, is looking for companies targeting the SMB market, in particular with offerings for today’s newly mobile workforce. It’s also interested in the usual suspects – cloud computing, infrastructure, mobile enterprise, and companies building at the application layer, focused on doing one thing really well in their niche, like DocStoc, for example. On the consumer side, Korte thinks we’re entering the next stage of mobile – not just taking a picture and posting it to Facebook, but using the phone in predictive ways, he says. But AngelPad’s group is always diverse, so it’s not just considering these types of businesses, but any where it believes in the founders’ vision and ability to execute.
Korte says that, in looking back, AngelPad’s model is working: be selective in the application process, focus on a small set of companies (12-15 per session), and work closely with them, including in the first year post-AngelPad as they raise follow-on funding.
The application deadline for the upcoming spring session is now Thursday, January 17th. Interested companies can apply here.
Last summer, Pipedrive was fortunate to be part of Angelpad, an accelerator run by a few very smart ex-Googlers. The 3 intensive months thoroughly changed our understanding of how to build a successful product, and a successful company. And more importantly, it boosted our growth to the next level. Here are the five most important lessons I learned from this crazy time.
Running a startup is like being punched in the face repeatedly.
The Angelpad team and mentors challenged us in many ways. “You have too many things on your home page” was something we didn’t agree with at first, but we’re happy to test. And it turned out we had been wrong indeed. We removed 80% of the content, and left one sign-up button and one Learn More link on the home page. Conversion to sign up increased by 300%.
Another important piece of feedback early on was to add more languages to the product. Four months after adding Brazilian Portuguese, Brazil is became our second largest revenue source, ahead of the UK and Australia.
Finnish companies tend to be very traditional, not taking many risks. Silicon Valley is completely different: people here really live on the edge.
We began building Pipedrive in Europe, in the tiny country of Estonia. It wasn’t long before we realized the importance of living next to your customers and investors. “You guys are in Estonia and I’m in San Francisco, so we are making this about as hard ourselves as possible… – was a common answer.
Lastly, it’s only in Silicon Valley where you have startup celebrities randomly walk into your office. One day Robert Scoble popped round to the Angelpad office, and video interviewed us. Next week, Dave Mcclure walked in, which was a rare opportunity to see him without mentioning any F*** words. No matter what we were looking — investor intros, partners for an event or product feedback — we got it so much easier and quicker during our stay at Angelpad.
Your location will also impact your valuation. The same early stage startup can be valued at $1-2 million in Europe, $2-3 million on the East-Coast and $3-5 million in Silicon Valley.
Hackathon House in Estonia
Your best work involves timing. If someone wrote the best hip hop song of all time in the Middle Ages, he had bad timing.
Fundraising is like a dating, you need to have two-way chemistry and you’re only “hot” for a short period of time. Before you even start fundraising, make sure that the timing is right. Having traction helps, but if this is not speaking for you for one reason or another, there are other creative ways to be talked about. For example having commitment from a well-known angel, press coverage, new superstar hires, rolling out new features. If you lose momentum, it might be better to end fundraising and go back to building the product.
Another thing to keep in mind is that more and more startups need more time than the 3 -6 months at an incubator before they are on right track for funding.
Whatever you’re thinking, think bigger.
-Can they build the product?
-Will people use it?
-Will people pay for it? (Instagram is a black swan, remember?)
-Will people come in hordes?
Make sure you answer these questions when you pitch.
Make every detail perfect and limit the number of details to perfect.
More often than not investors don’t make time to go through your brilliant pitch deck. Assume it is checked in a hurry or when waiting for a meeting to start or stuck in a traffic jam, So before you send your e-mail, look at your email and deck on an iPhone screen. Is the e-mail too long? Is there too much data on the slides? Probably, yes. We started with 12 and ended up with 7 slides.
It’s also worth mentioning that the email deck and your meeting presentation deck serve very different purposes. The only aim of the former is to get an investor or partner to have a meeting with you, not to drop a load of other information on them.
Top accelerators will test your limits in many ways. If your team manages to get into one and make the most of it, your business will greatly be accelerated — just like it says on the tin. Just six months after “graduating” from Angelpad, Pipedrive surpassed the 1,200 paying customers milestone to reach “break-even”, which was faster than we ever imagined.
If your response to virtual infrastructure installations is a derisive “Boring, Sidney, booring” then maybe AngelPad startup ElasticBox isn’t for you. However, if you love cloud computing like Nancy loved heroin, I think you may be in luck.
ElasticBox, founded by former Microsofies Ravi Srivatsav, Alberto Arias Maestro, and Amadeo Casas Cuadrado, is a service that makes setting up and running a cloud-based service quick and easy. With the service you don’t have to set up the environment in order to run an app. Instead, you can focus on the actual functionality and far less on server maintenance.
Ravi wrote us saying:
ElasticBox provides you with everything that is needed to deploy your applications where it makes more sense, whether your criteria is cost, performance or location all under a tight control of an enterprise grade policy management system
The company is currently bringing in a few hundred in revenue from actual paying customers, a surprising feat considering they launched on May 8. The service requires some onboarding right now but that will soon change. “We plan to open up for a self serve model in the coming weeks,” said Ravi.
“With the increased adoption of infrastructure as a service, enterprises are demanding software solutions that allows them to manage the execution of their applications in the cloud without having to deal with the challenges associated with server configuration and management. The ElasticBox team has seen this problems from the front line, at Microsoft, DynamicOps and MySpace,” he said.
The service supports multiple infrastructures including AWS and Microsoft servers. The goal, in short, is to allow folks to deploy their applications onto a clean, ready-to-run (dare I say “elastic”) box and let the company do all the IT maintenance and performance tweaks.
The service is open to customers right now although there is a waiting list of about 50 customers in the queue right now, making it a hot commodity. However, if you’d rather live at the quick and easy Chelsea Hotel of cloud computing environments rather than the staid estates of Lewisham, South East London, ElasticBox may be an interesting choice.