How I Accidentally Started an Angel Group
And why it's not really an angel group
In the year of our Lord, 2019, I was leaving a venture firm I had helped build and was looking for what was next.
At the time, I had two small boys (2 and 4 years old) and very little net worth. So, starting my own fund was a no-go and I’d just gone without salary (more or less) for a couple years to deplete all my cash.
Still, I was incredibly optimistic about the intersection of real estate and technology.
Not just because Fifth Wall and Camber had just raised large funds but also because I had near-daily meetings with real estate friends who kept clamoring for new/better technology.
So, they question became - How do I stay in PropTech without starting my own fund?
One way was to go work for another PropTech fund. But I quickly realized that for all their focus on innovation and disruption, most of those funds just hired their family members or long-time friends. Since I didn’t go to Stanford or Harvard, I had no chance of just showing up at a fund with pedigree (no matter how many deals I had done or LP dollars I had closed).
I was a bit stumped.
While this search was ongoing, people kept reaching out. People I had helped in the past. Investors asking about new deals. Founders asking about potential investors.
And so I decided to just continue helping these people while I figured out my career. I grew up around CRE (my dad is a developer), had spent 10 years in CRE finance and private equity, and had tons of friends starting PropTech companies.
It didn’t take a genius to make the connection - “Hey, I could just connect those startup guys with my real estate friends.”
As I caught up with my friends and mentors who wanted to talk about what was next, I let them know I’d keep making these connections regardless of my next role.
A few of them said - “If you find one you like, send them to me. I might invest with you.”
Ok. Easy.
Two or three of us turned into ten or fifteen. Then twenty or thirty.
Suddenly I had a group of friends and investors highly interested in investing in PropTech startups. That sounds like a group . . . of angels. An angel group, if you will.
Once I realized that, I started researching angel groups that worked well - Gotham Angels, Keiretsu, Hyde Park Angels, etc.
If those can work and be prolific, then why not us?
So . . . let’s build an angel group!
First step was to organize.
I created a newsletter on Substack where I could update the group every week with deals and data.
I created a Google Drive folder where I could keep all of the pitch decks and data we received.
I created a Slack group for all us to communicate asynchronously (that means “not at the same time” for all you Florida grads) about events we were attending, questions we had for each other, articles worth noting, and a dozen other topics that vex the minds of the PropTecherati.
I created a recurring Zoom meeting every two weeks where we could discuss deals and trends real time and invited all the members.
And after researching the best angel groups, I realized we needed a member fee. Here’s why:
Humans don’t use what they get for free.
They don’t value it and don’t make time in their schedule. We are all busy. When we pay for something we value it and make room for it in our schedule.
And THAT is precisely what has plagued angel groups and hurt their reputations for decades. They’ve typically been a bunch of old, retired guys with nothing better to do than hear young people pitch their ideas in search of funding.
People don’t show up regularly and when they do they rarely invest.
What the best angel groups figured out is that “you get what you pay for.” If you want “free level” deals, join some free group or poke around AngelList every day. If you want quality deals, resources, and content, you’ll have to pay for it. (Just like everything else in your life.) Taking member fees allows you to level-up your deal-sourcing with more resources and it simultaneously make members more accountable to attendance since no one wants to waste their money.
But what to charge?
When I did the research, most of the best were between $5,000 and $10,000 per year.
That seemed high to me and I wanted founders who hadn’t cashed out to be part of the crew (who would know the inner workings of PropTech startups better than them?)
So I decided to break it up into monthly payments and charge HALF of what those large groups charge. That way, no one could question the price and even if they did they could always cancel after a month or two.
I settled on $200/month.
And since I wanted to focus on deals and data rather than running around sending email invoices all month, I decided to use a platform to collect those monthly fees.
Hello there, PayPal.
They have a recurring payment button I created that auto-drafts from the customer account every month. Yeah, they charge 3% per transaction to do it, but I’d gladly pay $6 per member to not have to run around chasing invoices every month.
And that’s it. That’s my entire tech stack.
Zoom for semi-weekly meetings.
Slack for asynch chats.
Google Drive for all our decks and data.
PayPal autodraft for member fees
Pretty simple. Now I needed to make sure it was a no-brainer to join.
Even if our group costs 1/4 to 1/2 of the premiere generalist angel groups, I still want to acknowledge that our members’ money is precious. (Plus, many members have never been in an angel group before and don’t know that they should WANT to pay.)
How do I make the $200/month a no-brainer so that our members clearly receive more value than they pay?
Any angel group can claim “we get all the best deals.” There is no way to quantify that and, more importantly, verify which deals are unique and high-quality vs the ones that are plastered all over AngelList, LinkedIn, and the other channels. If more/better deals is all we could offer, then we’d eventually lose to some web-scraper or uber hustler who would neglect friends/family/health to simply find deals.
Not a game we want to play.
So, my first answer was data.
As of this writing, we’ve created more than 70 folders that encompass everything from metaverse to blockchain to IoT to air quality to prefab and every other technology that can be applied to buildings. All of those folders have research visualizations like this one we did a couple weeks ago for construction labor: (We’re adding Skillit later)
Our members have access to all of this private, proprietary research as long as they are members.
We also have more than 1,000 pitch decks of PropTech startups as well as Founder Resources, Insider Content, Fund Research, and our back-catalogue of Recorded Calls.
Which led to our second valuable tool - Regular calls.
We started to have RECORDED calls with our members every other week back in 2019 and that has become our regular town hall. You know that you will see some familiar PropTech faces every two weeks if you can join our calls.
**Side Note - One of our first calls was with Tom explaining to us what a SPAC was. My mind was blown. Remember - this was 2019 when no one had ever heard of a SPAC.**
The calls involve one of our members giving her Member Spotlight to tell us what she does, where she’s from, how it’s going, and how we can help. These calls are not pitches. Just meetings of peers looking to learn and help each other.
For the final 20 minutes of the call, we discuss new deals and upcoming events or issues. Since I know our members are busy, I always record them (when I’m allowed to) so that you can watch them later as you have the bandwidth.
As of today, we have 97 recorded calls and include topics like How to Leave the Company You Founded with Grace, Selling Secondary Shares, and The State of Capital Markets, etc.
They are a ton of fun and always interesting (to me).
The third way I wanted to make the membership a no-brainer was through member perks. Imagine AWS, Carta, AngelList, Standard Metrics, and many other service providers to the startup industry getting access to a few hundred founders and investors.
Think they might offer us a discount?
Our members have discounts to resources and events worldwide that total several thousand dollars.
(Not to mention all the free drinks and networking you get at our 5 to 7 in-person happy hours every year!)
Take all of that - data/research, regular calls, and member discounts - and package in a weekly email on Substack and I think you have a compelling reason to spend $200.
200-ish friends of mine seem to agree.
Still, as a said above, it’s not REALLY an angel group.
Angel groups do angel investments, right?
The only reason to join an angel group is to see all the deals the group sees, right?
By now you can probably tell that I don’t think that’s the main value in a collection of the most brilliant minds in PropTech.
Do we do deals?
Of course we do.
But if we didn’t fund a single startup this year, I’d be fine with that. Having all these brilliant people in the same room, Slack, or Zoom is an incredible resource that only gets stronger by the day as we continue to learn and share secrets we can’t share on stage at conferences.
Cumulatively, we’ve done HUNDREDS of PropTech investments. We’ve even invested in PropTech funds. But that’s a byproduct of being better PropTech investors and entrepreneurs. It’s not the primary goal.
Did you notice how on our calls no one is pitching an investment? No company ever has and I doubt anyone ever will.
How can I keep track of 200 people’s appetites for stage, geography, property type, technology, etc?
Instead, I put all of our new deals in the weekly newsletter where our members can review them at their own pace. If 10 of us are interested in investing in a given startup, then those 10 angels will get on a call with the founder and ask our questions to get to a decision. That saves 190 people from having to listen to a pitch they don’t care about.
We want pitches to get in front of the highest quality of investors, not the highest quantity. If you want quantity, get good at Twitter or pound AngelList/LinkedIn. They will always be bigger than we are. We are the people in the trenches solving the same issues and want to help each other be better.
That takes a certain type of person with a pay-it-forward mentality.
So that’s the story of how I accidentally built the largest angel group in PropTech in the world.
What’s odd is that I don’t really want it to be all that big. I like that we know each other and have a sense of community. We’d lose that intimacy if we had 1,000 members.
I am always open to new members who have a heart for both innovation and service. If that’s you, hit me up or go here and sign up for the Paypal at the bottom.
If you end up joining, we’ll welcome you into our community and I’ll get you on next week’s call. Worst case, you hate my guts and you’re out $200. (I’ll refund it if you feel cheated.)
See you guys at conferences this Summer and feel free to reach out to me if you think the group above can help you!
p.s. If there are any monetary awards for most creative group names, I only accept awards for “PropTech Angel Group” in Dogecoin.