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ACA Case Study: How can a simple tool streamline vetting and networking for angel investors and entrepreneurs?

“The PixelEdge Syndication Platform provides a rare opportunity for everyone around the table to win! Angel Groups get better deal flow and can close rounds faster while and startups can raise funds easier.  The real beauty of The Platform is its elegant simplicity." - Sandy Wollman, Confounder/Managing Director of Westchester Angels | Board of Directors at ACA


Table of Contents


Problem

While it can be difficult for entrepreneurs to raise funds, it is also challenging for angel investors to find quality opportunities for investment. And an angel investor generally wants other angels to join a funding round. Once that first angel “deal leader” invests the time to vet an entrepreneur and commit to a deal, they try to connect the entrepreneurs to other angels to complete the round of funding. 


But they also want the entrepreneur focused on what they do best: building their business. Typically, entrepreneurs need to create custom presentations and travel to each funding opportunity to try to complete the funding round. Having a lead angel and their network is a big step forward, but they work still isn’t done.


Angel Capital Association (ACA) is a trade organization that connects accredited angel investors with information and potential deals. They build connections and host events that connect angels and entrepreneurs, making sure that all potential deals are vetted for quality. But their vetting and networking processes were time consuming, and they needed an easier way to connect angels to deals that they were interested in.


One way they connected investors was to build syndicates of angel groups that shared an investment affinity, like located in the northeast, women-led businesses, or clean energy. These groups share information and meet a couple times per year to vet the most promising deals. 


Organizing syndicates, sharing deals, and even picking the best deals for these meetings all took significant time and overhead for ACA and syndicate leaders. These complexities could jeopardize the deal leader’s ability to raise additional funds for the entrepreneur they had vetted.


ACA came to PixelEdge asking for a better solution. Angel investing is an exercise in vetting deals and networking, and ACA wanted a better way to do both.


PixelEdge Solution

PixelEdge created ACA Syndication, which focuses on connecting a deal leader with an appropriate syndicate to share opportunities. The tool gives them a centralized place for a deal leader to post deals in a particular syndicate to generate angel investor interest.


Screenshot of ACA Syndication showing a simple list of deals nominated by an angel investor deal leader

They make it easy for a deal leader in the syndicate to post the deal, taking only a few seconds to enter the entrepreneur’s email. And in turn, the entrepreneur can fill out the basic form and add their stock investment slides, video, and executive summary, which takes about five minutes. 


"Nominate a deal" screenshot showing that it takes an angel investor deal leader 15 sections to sign up by selecting a syndication group and providing the startup CEO's email

As the angels are well known in the space, ACA can entrust deal vetting to the deal leader without the need for their organization’s direct involvement in paperwork or organization.


Now, rather than organically networking or relying on others to share investment details, the deal leader has a tool where they can easily share vetted companies with other angel investors. In turn, the angel investors have an easy way to see good deals, because the ACA Syndication tool provides the following benefits:


Selective

For an entrepreneur to have their idea featured, they need to be referred by an individual champion from an angel group that has already invested in them. Investors only see high-quality deals.


Low overhead

An angel deal leader can nominate a company for listing in the app with just the email address for their CEO, taking about 15 seconds. The entrepreneur, in turn, can fill out their application in about 5 minutes.


Current

Entrepreneurs are expected to update their status weekly. If they don’t update for three weeks, their listing is removed.


Relevant

Deals are specific to a syndication network. Angels can review deals from a particular group, such as those in the Northeast, cleantech, life sciences, or women-led businesses. 


Impact

Investors who want to see more at a meeting for their syndicate can vote on the deals with the highest impact, improving the relevance and quality of syndicate meetings.


Results

Lead angels now have a great tool that helps them connect to like-minded angel investors to fund entrepreneurs faster. Key angel investors using the platform report that:

  • The quality of the deals is so high that 50% of their investments come from the platform.

  • They are 5 to 10 times more likely to invest in ACA Syndication deals.

  • The nominated entrepreneurs close funding rounds more quickly and with significantly less effort on fundraising.


The ACA offers the ACA Syndication to their members only. Since release:

  • The number of deals went up significantly.

  • Membership increased by 5% with word of mouth, and is expected to grow after the tool is marketed.

  • Member syndicates have less overhead and more interest in their meetings.


By centralizing and simplifying vetting and networking for angel investors, both angels and entrepreneurs benefit from the PixelEdge technology.


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