How Rootly’s Founders Used a Roll Up Vehicle to Add Strategic Angels to Their Seed Round
“It was nice to be able to provide a self-service way to do something that’s usually complicated.”
Aug 12, 2021 — 5 min read
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(Roll Up Vehicles have moved to Rollups.com, AngelList's new brand for startups.)
Rootly is a company founded by engineers, for engineers. The startup’s incident management software allows site reliability engineers (SREs) to resolve technical incidents directly from Slack.
When co-founders JJ Tang and Quentin Rousseau raised their seed round in April 2021, they sought out CTOs as investors because they felt CTOs would understand the problem they’re trying to solve.
“CTOs get what we’re doing because they’ve had to deal with it themselves,” said Tang, who worked as a project manager at Instacart with Rousseau (who was an SRE) before they launched Rootly in 2020. “We wanted to involve as many CTOs in the fundraise as possible because we it would make it easier to scale the business.”
As it turned out, raising money from a large number of strategic angel investors proved anything but easy.
The Challenge: The Traditional VC Model Doesn’t Easily Accommodate Adding a Large Number of Strategic Angels to a Fundraise
Tang and Rousseau reached out to—and got immediate interest from—several potential investors for their seed round. The problem then became apparent: For each investor, they’d need to create a separate SAFE that would add a new line to Rootly’s cap table.
“The legal process of adding that many small checks was complex,” said Tang. “Not to mention all the signature chasing we’d have to do when we raise our next round. I couldn’t believe there was no low-cost way to do something that would be so obviously beneficial to the business.”
