First, picture it: you’re a budding entrepreneur, meeting with an angel investor. This is your big shot. You’ve rehearsed ad nauseam, the big moment comes – and you totally blow it. Maybe it wasn’t your fault completely: maybe the investor was being a bit of dickhead that particular day, or maybe that’s just how you remember it, in retrospect. No matter.
Fast forward a few years, and suddenly you find that the tables are turned. You’re the interviewer, and that angel investor happens to be in the hot seat. Sweet revenge, at long last. Except for one tiny problem: the investor happens to be Brian Cohen, Chairman of the New York Angels, and let’s fact it: no matter what you throw at him, Cohen has been there, done that, and he’s basically unflappable.
Last week, Women Innovate Mobile’s Kelly Hoey (former budding aforementioned entrepreneur) interviewed Brian Cohen at the Apple Store, and with such memorable pearls of wisdom/sound bites as these, it’s just hard to throw Cohen off his game:
On the accessibility of angel investors/who really holds the power in the angel/startup equation: “You can reach out to us. We wouldn’t exist if you didn’t have a company. “
On the rigor that’s missing in ‘do’ diligence: “I’ve always wanted to start a board of devil’s advocates. A group that’s there to play devil’s advocate and just annoy the hell out of you. But then it would rankle you and you’d tweet about us that ‘no one was nice to you.’”
“I call it ‘do’ diligence. ‘Due’ diligence is more of a reason why not to invest. Not doing due diligence is like having unprotected sex.”
“Iteration is the new innovation.”
“I grew up reading ‘Spiderman.’ I get a ‘spidey’ sense (when it comes to investing). It tingles.”
On being the first investor in Pinterest: The tingling was way off the charts. I love simple. Never get complicated. YouTube. Facebook. What business are they really in? They’re in the container business. They’re providing a container for you to put your stuff in. Get as simple as you can.”
“What we’re seeing now is angel exhaustion. An investment takes 6-9 years and the average age of an angel investor is 56. I have to find an investment that scales fast and gives me a good exit. If angels don’t make money, the entire ecosystem suffers.”
On what’s the best elevator pitch: “One that makes me curious enough to have the next conversation.”
In other words, don’t lay out the entire business plan. It’s a teaser, not your magnum opus.
What’s the best response you can get from an investor, besides ‘yes?’ According to Cohen, it’s ‘No.’
“They hate to say ‘no,’” he explained. “They don’t want to feel that they might miss out on something. Put them on the spot. Make them feel comfortable about saying no.” As to how often they say yes: “Angels only invest in one out of 40 companies. VC’s: one out of 400.”
On accelerators, et al: “Accelerators, incubators, masturbators. New York City is the biggest accelerator of all. It’s an accelerator unto itself. There are advisors around every corner, yours for the taking, any time you want it.”
On the inevitable women (or lack thereof) in tech question: “According to the Kauffman Foundation report, you must have a woman in a C level position – you have a better chance of success.”
In fact, the New York Angels recently invested in two women-run businesses, Cohen noted: He Texted (previously covered in AlleyWatch) and BeautyBook, both of which are part of the New York Angels’ new Early Catalyst Fund.
If you want more, you’ll just have to buy Cohen’s book, What Every Angel Investor Wants You To Know: In Insider Reveals How To Raise Money For Your Billion-Dollar Idea.