Why Founders Want to Raise from Peers: An Interview with Todd Goldberg

SS: What was your first company?

TG: I founded Eventjoy with Karl White. It was a mobile-first ticketing startup that helped people effortlessly organize events. We started the company in Florida and later moved it to the Bay Area for Y Combinator. We eventually sold the company to Ticketmaster. After the acquisition, I stayed on as GM on the business so we could continue scaling up the team, product, and number of events we supported.

SS: What did you do next?

TG: I started a consumer product studio with Karl. Some of our products got featured by Apple, but we didn’t have any homeruns. We ultimately landed on a B2B product called Mailjoy, a do-it-yourself tool to design and track direct mail campaigns.

SS: How did you get into angel investing?

TG: I was familiar with AngelList from raising money and hiring talent for Eventjoy. When we sold that company in 2014, I went deeper into AngelList to learn more about angel investing.

I made my first angel investment that year with Partender, an inventory solution for bars. I didn’t know much about investing at the time; but I liked the founder—who I knew from college—and what they were building, so I backed them.

Through Partender, I met Rahul, who also invested. Shortly after, Rahul pitched me his new company, Superhuman, during their seed round. I loved the idea, and as product people, we hit it off. I ended up investing. Over the coming years, we’ve gotten to know each other better and have co-invested on many occasions.

SS: You launched syndicates on AngelList last year. How did that come about?

TG: I scaled up my angel investing in 2019. Before then, I had spent a lot of time working with portfolio companies and had developed a track record because of some early breakouts. My dealflow grew as a result, so I decided to launch a syndicate on AngelList.

In the span of two months, I grew my syndicate to over 200 backers which was large enough to run my own deals without having to co-syndicate them.

SS: Why did you decide to launch a fund? And why with a partner?

TG: I decided to move to a committed pool of capital with an angel fund so that I could get deals done faster. I initially planned to raise a $1M to $2M fund backed mostly by founders and operators.

I pitched the idea to Rahul as a potential LP, and he said, “This is great, but what if we do it together?” Given our angel investing history together, a joint angel fund made sense.

Rahul and I had been co-investing as angels for years. We previously invested in companies like Clearbit, Tandem, Placer, Command E, and Mercury. We evaluated startups through a similar lens and felt we could help companies in ways that made our capital more appealing. We also thought our combined brand and network would give us an edge.

In total, we raised $7.3M in about four months. Most of our LPs are world-class founders and operators who are either running companies or experts in certain areas.

SS: What’s your fund strategy?

TG: We believe founders want to raise their first capital from their peers: current or former founders or operators. We also extended that concept to our LP base.

When we back a company, we get their products in front of high quality founders and operators who may be potential customers. In some cases, our LPs not only evangelize the products but invest alongside us, too.

We spent a lot of time thinking about the Mike Maples quote, “Your fund size is your strategy.” The size of your fund impacts the size of the checks you need to write for your fund’s economics to make sense. We looked at the market and determined $75k to $200k was the right range for the stage we’re investing in. We think that’s a moderate size check given the value proposition we offer. We advise on product, go-to-market, and help the company develop a fan base of evangelists.

Keeping our checks small also allows us to be collaborative with other investors. We work with many other funds and angels. We all send deals to each other.

SS: What type of company do you invest in?

TG: We tend to be vertical agnostic. We have a wide breadth of companies in our portfolio across B2B and consumer. The biggest thing for us is consistently sourcing great founders through our networks. On the consumer side, we like viral SaaS—otherwise known as bottom-up SaaS—health, fitness, and wellness. On the B2B side, we like infrastructure companies that help other companies get off the ground and run more efficiently without worrying about the complexity of specific functions.

SS: Why did you choose AngelList over other platforms?

TG: When we decided to launch a fund, our big question was: How do we get this going as fast as possible, especially as first-time fund managers? We viewed AngelList’s venture product as a fund-in-a-box. It worked well for us because we wanted to go live as soon as possible and focus our time on high-leverage tasks: getting capital in the bank, investing in companies, and supporting our portfolio companies.

We had our first capital call about a month after we decided to raise funds. AngelList’s capital call process made things easy and fast for our LPs to sign and wire money.

SS: Why is speed so important?

TG: For any founder or investor who’s raising money, there’s one thing to keep in mind: Deals aren’t done until the money is in the bank. When someone’s interested, you want to close them as fast as possible. With AngelList, the moment a potential LP says, “We’re in,” you can immediately send them a link to sign and wire funds. That helped us keep momentum throughout the whole fundraising process.

SS: Now that the fund is launched, what are you focused on?

TG: Venture investing has a long feedback loop, both in terms of returns and reputation. If we want to keep participating in this ecosystem, we can’t just deploy capital—we have to be helpful to the companies we work with. It turns out that’s also the part we enjoy most!

SS: What trends do you see coming in venture?

TG: Founders want to raise from their peers. They want to raise their first money from other founders and operators, rather than large firms. In a lot of first rounds, the early capital comes predominantly—if not exclusively—from angels.

AngelList is doing a lot to advance this trend. Some people have great access but limited capital; others have capital but limited access. AngelList’s venture fund product is a great vehicle for these two sides to meet.

With so many angels in the ecosystem today, early stage deals are getting done faster than ever. Speed can also be a competitive advantage.

SS: Do you have advice for emerging managers and how they can build a track record?

TG: It’s important to match your check size to what the market supports, because your desire to deploy checks of a certain size may not match the market realities.

Also, it’s easy to overanalyze when you’re looking at early stage companies. In reality, there’s little to no data you can base your decisions off of. You’re mostly betting on the founders. If you find a promising team working on something you’re excited about, and you think you can be helpful to them, back them.

You can learn more about Todd's angel investing on his personal site.