The New York Angels
Venture Capital and Angel Investors from New York City
Top 3 New York City Startups
1. warby Parker
Warby Parker is a transformative lifestyle brand with a lofty goal: to offer designer eyewear at a revolutionary price while leading the way for socially-conscious businesses. Warby Parker's mission is to radically transform the optical industry, while demonstrating that companies can do good in the world, become successful and make a profit—without charging a premium for it.
LaunchRock is an online platform that enables its users to create viral "Launching Soon" pages with built in sharing tools and analytics. Launchrock is owned and operated by a team that has launched dozens of startups over the past 20 years. They understand the challenges you face as you create a business.
Venmo is a mobile payment service that lets users transfer money to each other. It follows a similar business model to PayPal. Venmo describes itself as a "digital wallet". Users sign up and create an account by providing basic information and bank account information using their mobile app or on the Venmo website and they can find others who have created an account. Friends and recipients of transactions can be found via phone number, Venmo username, or email.
Top 3 New York City Investors
1. Philip Grieshaber
Grieshabler has extensive technical background in online advertising. His strength as an investor includes translating the difference between the business side and the tech side for tech startups. Some of his investments include: Adaptly, Shoppable, and TripleLift.
2. Pedro Torres-Mackie
Pedro is the Founder and Managing Director at Quotidian Ventures. In 2015, he was included in the Forbes' 30 Under 30 in Venture Capital. Some of his investments include: August, Bench and Versa.
3. Laurel Touby
Laurel is currently the Managing Director for Flatiron Investors. However, before Flatiron Investors, she founded mediabistro.com, which sold for $23 million. Her focus as an investor is directed toward the media, marketing analysis, and software for the Internet of Things. Some of her investments include: Immediately, openhour, and Appboy.
5 Ways to Find the next top startups
It may be the dream of every investor to discover the next big thing and that you end up rich beyond your wildest fantasies while the world praises you for your astonishing insight and vision. This is an excellent and rewarding fantasy, but it is probably not going to happen. However, you can make a lot of money and have fun investing in startups if you follow these proven strategies, used by such successful VCs as Marc Andreessen, Fred Wilson and even the greatest investor of all-time, Warren Buffett. The concepts are simple and you can apply them to startups in any industry.
1. Does the Product or Service Solve an Actual Problem?
Don’t think that a problem doesn’t exist simply because nobody is talking about it. Consumers weren’t bemoaning the lack of a table in their lives before April 2010 when Apple introduced the first iPad, but consumers sat up and took notice. Sales of the iPad were astonishing. Despite recent slowdowns, the iPad is inarguably one of the most successful products of all time. When they saw it, consumers realized that the iPad was, in fact, the solution they had been looking for. Lightweight, portable, useful and sturdy, the iPad was a better mobile device for Internet use than smartphones with their tiny screens. Apple had the vision to develop a product that solved a problem. Just because consumers had not yet articulated the problem didn’t mean they weren’t looking for a solution.
Most successful investors suggest sticking to what you know or staying in industries where you understand the business. Not only will that help you understand the market for the product but also you can more evaluate whether it is a real solution to a real problem.
Warren Buffett looks for recurring revenue, as in the razor followed by the perpetual razor blade sales. In technology, the cloud represents a source of recurring revenue that can sustain a company more comfortably than selling one off licenses. Just ask Marc Benioff of Salesforce.com (he's the man in the picture) about the benefits of a SaaS model and recurring revenue.
2. Who Is On your Team?
The founders and the startup team are important, but they may not have startup experience or business experience. You should spend time getting to know the team and observe how they handle themselves in various business situations. Notice what the office looks like, and ask about their plans to move or renovate as they grow.
You should evaluate the team around the founders. The best you can hope for would be if they’ve brought in experienced people to help run the business. If all you see in meetings are frat boys, this may not be a prudent place to park your cash. Marc Andreessen says he looks for “the magic team.” As you’re evaluating the team, remember the wisdom of Peter Thiel: “Scientists never make any money. They’re always deluded into thinking that they live in a just universe that’ll reward them for their work.” That’s another reason why you need a balanced team with varied skills and expertise.
Also consider who else is backing this endeavor. If you’re the first angel in the first round, you don’t have much insight, but if the startup can point to Andreessen Horowitz, Sand Hill Partners, Warren Buffett or another well–respected investment group, you are in good company. That doesn’t excuse you from doing your own due diligence. It just means you’re in good company.
3. Is There a Plan?
The latest thing in startups is bragging about the “pivot” where the company changes direction because they found a new idea they like better. This is called ADHD in small children and we treat it with medicine. In startups, we often treat it with cash, which makes no sense at all.
There are certain parts of the plan you should pay special attention to. One is the monetization strategy. There should be one, and it should be well thought out, supported by research and viable. If the plan calls for millions of marketing dollars to find hundreds of thousands of revenue dollars, it is not a good plan. The startup should be able to point to other companies that have used the same strategy successfully.
Look for scalability. Many a company starts with a product that doesn’t scale and they all suffer an unhappy fate. Think of WebVan with its $50 million per city infrastructure costs. How many people will want this product or service? If the market is too small you will saturate it before you’ve earned back your investment.
You should also ask about the exit strategy and timing, and the founders must understand and actively support your need to earn a return on your investment. Unless your plan is to treat this cozy little company like a retirement hobby, the founders must actively support a mutually agreeable exit plan and timing. Otherwise, you can grow old before you see your money again.
Look for momentum in the company, the market and the product. You should see the company adding people to the team as they approach market readiness. You want to see signs and stirrings that the market is seeking the solution you are about to unveil. You want to see new beta versions that perform better or have more features.
4. What About the Financials?
If the company has been in operation, you should be able to see its financial statements to evaluate the team’s spending habits and use of funds. Both of those may change once the founders have millions of dollars in hand rather than just a Visa card, but you may get an inkling of the future.
Along with the existing financial statements there should be some projections as part of the business plan. Make sure the written business plan jibes with what you hear the founders saying. If they’re talking a nationwide rollout but the plan shows barely enough spend to cover the neighborhood, you’re dealing with a naïve or unrealistic team.
Look for consistency among all the paperwork and the financial plans. Make sure you are comfortable with the ownership structure and that there are safeguards to protect your interests.
5. Can You Afford the Loss?
Even with the right product, a brilliant plan and a stellar team with conscientious spending habits, things happen. There is always risk in investing, especially with startups. Before you hand over your hard earned cash, make sure you can afford the loss if you never got your money back.
As you’ve been reading this, you may have noticed that the well–known angel investors recommend various evaluation approaches, but they all focus to varying degrees on People, Product, Timing and Execution, just as we do. Add to that the caveat to understand your limits. Just as you would in poker, decide how much you can put onto the table for investing, and never stray from your investment strategy.
Let's Rewind a Little Bit...
What is a Startup?
What is the proper definition of a startup? First and foremost I'd like to say that the word startup is quite cliché. You hear this world all the time from longstanding companies to be cool or even companies that are around 2 or 3 years. I think if I were to define a startup or the true definition of a startup it's that you have a team that's been formed within give or take about 18 months. They're still in that 18-month cycle in which they've at least tested their product, put together their team and tried to execute within an 18-month period from the start of creating an LOC, creating an Inc. corp, however you want to create it, to about 18 months. I like to think of it as an 18-month window.
Number 2 is the definition of a startup is one in which a team of people that have never created a company. That means that you don't have veterans of the industry. Maybe they've worked at big companies, Fortune 500 companies before, but the majority of the founding team is new to starting their own company. What that means is that you have some experience but no experience creating your own company. That's your very boiler plate definition, a company that's been created within 18 months and then a team that at least the majority of them have never created a company, baseline. Third is what makes a great company, what makes a great startup. That's one in which the founding team, these rookies, these newbies have created a company that's going to change an industry, and startups are not your typical status quo. They're hopefully a group of people that want to create something so different or so transformative that they've impacted an entire industry.