Highlights

• Published 4 deals last week
• Tracking to close a deal this week
• New deal sourcing policy

Change in deal sourcing policy

• Our previous two criteria for sourcing and publishing a deal:
  • A member requests allocation in a company. If the request gets enough soft commits (~$50k), we would then reach out to the founder to source an allocation.
  • A member refers a founder. We would skip the soft commit aggregation process and publish the deal to the group.
• Going forward, all deals will go through the request + soft commit aggregation process.
  • We will only reach out to the founder to pursue an allocation if we have >$80k in commits. The exact $ amounts in commits required depends on our SPV admin fees. We like to keep our expense ratio ≤ 10% (SPV admin fees / paid-in capital)
• How will this affect deal flow?
  • In the short term: fewer deals but deals that have higher probability of closing.
  • In the medium to long term: I’m targeting publishing at least one deal per week to the group
• How will we process deal requests and soft commits?
  • I am writing a specification on how to solve for this and will publish in our Slack. I’m leaning towards a custom Slack bot that can handle deal requests, commits, etc.

North Star

• Our North Star metric continues to be “Deals Published”. We have made significant progress in the last week. This will likely continue over the next two weeks. There are many member-referred deals pending publication. Deal publication will likely slow after that due to the deal sourcing change.

  Date	Deals Published to Date	Change since previous
  7/31/22	6	4
  7/24/22	2

Deal Pipeline

• Major positive: last week, the vast majority of deals were in the “Alliance admin review” stage. We have broken this bottleneck. All pipeline deals are now pending memo review by either founder or AngelList.

  

Membership

• We define members as those who have subscribed to our email list. It’s possible for someone to be an active member and not tracked here. A member could receive deal notifications only through Slack, etc.

  Date	Subscribers	Change from Previous
  7/31/22	1257	-13
  7/24/22	1270

Revenue

• Our OpenCollective page continues to collect voluntary contributions from member supporters. We have received $3,475.85 in contributions to date. My thanks to all these true believers!
• How should we monetize?

  • A subscription (like a Costco or Amazon Prime membership) seems reasonable. Members would get access to deals at no fee (carry, management, or commission)

  • If doing a subscription model, I’d like to target ~90% gross margins. To meet that margin target: the Alliance would likely need to charge ~$100/month. Slack Pro alone would cost ~$10/member if we decided to upgrade. We’re currently on the free Slack plan but upgrading may become necessary in the future.

  • Monthly recurring fixed costs are ~$150/month. These do not grow (aside from Mailchimp) as we add new members.

    Service	Monthly Cost
    Airtable	$72
    Mailchimp	$34
    Notion	$24
    Google Apps	$12

  • The largest open question for cost is talent. Each deal requires time from a lead to go from sourcing to closing. This is why it is critical for us to transition to the new deal sourcing policy. With prioritized member referrals, the workload is high and constant. We don’t know what the deal workload will be like under the new sourcing policy so it’s hard to forecast and staff.

Talent

• We’ve received strong applicants for the contract deal lead position. I may need to pause on filling this position until I launch the new deal request + soft commit tooling. I will reach out to all current applicants with an update.

Legal

• Starting process of onboarding our management entity onto AngelList

Last week’s update for context

• #1 Weekly Update