This past Thursday night, Women Innovate Mobile co-founder Kelly Hoey hosted a panel of angel investors, including Nihal Mehta (Eniac Ventures, Founder & Executive Chairman, LocalResponse), Nnamdi Okike (645 Angels) and Jerry Neumann (veteran venture investor) to pick their brains and get their insights on early stage startups and funding.
The mobile space was a big focal point at the beginning of the conversation, with Mehta stating that he has been investing in mobile for more than seven years. 65% of emails are read on mobile, indicating the growing impact smartphones and tablets are having on the tech industry. Mehta also said that New York has dramatically changed in the past three years; the culture shift now indicates that it has become “cool to be an entrepreneur.”
Most of the discussion focused on startups and how they should go about looking for funding. Mehta stated that “early stage investing is almost like being a scalable founder,” and that the most important factor he considers in a startup is its team. Neumann predicts big New York IPOs in 2014; he feels that a few companies are “getting ready for it.”
Neumann said that the bar to entering the startup space has lowered in recent years but that people are coming up with only slight changes to what already exists. He only pursues companies with unique and original ideas, “you need to go in with something different.” The entrepreneur must aspire to be huge – raise money to invest it back into the company and grow it. Angels aren’t looking to invest in companies if the entrepreneurs are just looking to keep the money. They want to see a real plan as to what the investment would be used for.
To find investors, Mehta said that entrepreneurs should “focus on not just the check, but on who’s really going to accelerate your business,” such as through their network or guidance. Twitter can be an especially useful tool – he suggested constantly tweeting at the people you want to meet in order to get their attention and potentially a meeting. Neumann added that “angels are looking as hard for you as you are for them,” and to “put your listing up and then people to put yourself in front of.” All of his investments came through his network.
A good way of finding potential angels is through investments they’ve made that the entrepreneur respects. Mehta stated that, “the best products always get noticed.” People aren’t investing much at the seed level anymore; they want to see a real product.
This is not to say that the advice was only directed at entrepreneurs: the panelists also had tips for potential investors. Entrepreneurs want to see investors putting themselves in their shoes, to show that they are honestly interested in their ideas and becoming a part of the company. Investors see more risk and opportunity with early stage companies as opposed to growth stage; the entrepreneurs are “hungrier.”
Towards the end of the panel, Neuman stated that ultimately “nobody knows what makes a successful entrepreneur.” Fitting words, as the variety in New York tech startups and their founders have proven in the past and will no doubt continue to do so in the years to come.