Jaclyn Johnson and Angeline Vuong have been on a hike deliberating how onerous it may be for individuals to get began in angel investing after they realized they’d stumbled upon a startup concept. 

Right this moment they’re the co-founders of Cherub, a market that pairs angel traders with entrepreneurs.

Vuong spent almost 5 years working in product and development at Opendoor. Johnson based Create & Cultivate, a self-described “media firm for bold ladies” and had skilled either side of the investing world — as a founder and an investor. Earlier than beginning Create & Domesticate, Johnson bought her personal startup (No Topic) in 2016 and invested in quite a few corporations, together with baggage firm Away. 

Johnson likens Los Angeles-based Cherub to Raya, an on-line membership-based neighborhood for courting, in that it matches founders and angel traders based mostly on their preferences.

“You possibly can go to this platform as an entrepreneur and you may go on the platform as an angel investor and get entry to each individuals and specific curiosity based mostly on tags,” she mentioned in an interview with For Millionaires. “So for example, if I am going on the app and I’m fascinated about women-owned companies within the CPG area doing their Collection A or one thing particular, I’ll get floor deal movement that’s the highest match to what I’m searching for.”

With Cherub, traders and entrepreneurs can see who’s fascinated about them on the again finish. In the event that they too have an interest, they will point out it as such and it’s a match. Conversely, if an investor approaches a founder however that founder doesn’t view them as a possible match, they will reject the invitation to attach. Or if an entrepreneur’s minimal funding is $25,000 however an angel investor is barely investing $10,000 per deal, they will see that and never attain out to attach.

“We’re kind of utilizing courting app mechanics in a method,” Johnson mentioned. “So we jokingly name it the Raya for deal movement.”

Membership-based

To check the idea for Cherub, Johnson and Voung final yr first began a weekly publication that obtained 1,500 sign-ups inside three weeks on phrase of mouth alone.

Inspired, the pair constructed out an alpha product final summer season that featured about 40 corporations and gave traders a technique to request a deck. All 40 obtained requests for deck views, Johnson mentioned. Half of these deck views resulted in an introduction, she mentioned, the place traders expressed that they have been fascinated about being pitched by the founder. Twenty p.c of these introductions ended up getting funded in lower than three months, collectively elevating $1.1 million in capital.

Of these offers, 40% have been new angel traders, which means they have been accredited traders that had by no means written checks earlier than.

Cherub is now within the means of a sluggish launch, with 100 startups on the platform producing income of $50,000. They plan to develop that to 500, and have a waitlist of 1,500 startups, Johnson mentioned.

Picture Credit: Co-founders Jaclyn Johnson and Angeline Vuong / Cherub

Cherub is free for traders to make use of and prices startups by way of a membership mannequin. A $480/yr membership lets founders record their corporations within the listing and contains analytics corresponding to how many individuals seen their deck. The Cherub Choose membership prices $950 a yr and entails a extra vetted course of to indicate the corporate extra actively to traders, Johnson mentioned.

Johnson mentioned that Cherub additionally helps founders discover incubators and accelerators and has partnerships with the related incubators of companies corresponding to Andreessen Horowitz, Dream Ventures and New York Trend Tech Lab.

Buyers additionally get entry to knowledge corresponding to “updates on how an organization is performing, whether or not they’re elevating or not and the way a lot,” Johnson mentioned. 

After all Cherub is just not the one platform teaming up angels with entrepreneurs. AngelList is the largest and greatest recognized. Israeli crowdsourcing agency OurCrowd can also be big, after which there are those supplied by enterprise companies, like Hustle Squad’s Angel Squad for accredited traders, or others like Jason Calacanis’ The Syndicate.

However Cherub is totally different in quite a lot of methods, Johnson says. For one, it options startups with an emphasis on client packaged items (CPG) corporations. Although it additionally contains AI corporations, lodge tasks and apps, amongst others.

AngelList is extra of a B2B platform, could be very tech business centric and is greatest for many who have already got information or expertise in startup investing and may afford to take a position pretty sizable quantities, in Johnson’s view.

Then there’s crowdsourcing Wefunder or Republic, which is able to enable traders to take a position tiny quantities, generally as little as $100, which Johnson describes as “the kickstarter of angel investing.” 

Cherub sits within the center, she says. As an example, like conventional VC companies, the corporate hosts “founder-funder mixers.” Final yr, for instance, Cherub teamed up with Sophia Amoruso’s Belief Fund to host a cocktail celebration at which “each single factor on web site was investable,” such because the drinks being served and that includes a pop-up store the place visitors may “store any merchandise that they need to take a look at drive.”

“From that occasion alone, over $400,000 in offers have been generated,” Johnson mentioned.

Angel investor Allen Orr instructed For Millionaires that he had used different platforms corresponding to AngelList prior to now.

“Nonetheless, I felt that it was not a really private expertise and felt too transactional,” he instructed For Millionaires by way of e-mail. “What appealed to me about Cherub was the thought of a tailor-made and social method to investing,” he mentioned, including “I additionally appreciated that there are alternatives not only for funding but additionally advising manufacturers.” 

Maggie Rose Macar, founder and CEO of psychological well being help app Zant, mentioned an investor wrote a $25,000 test into her firm after it was featured in one of many earliest variations of Cherub’s newsletters and after she met the investor in individual at considered one of Cherub’s occasions.

“I believe Cherub does a terrific job at bringing lively traders into the room with founders who’re trying,” she instructed For Millionaires.

Cherub has raised $1.25 million of its personal, naturally from angels, together with Drybar’s Alli Webb and Blavity’s Morgan DeBaun, amongst others.