In June, the New Jersey Entrepreneurial Network held its annual Gathering of Angels in Princeton. The meeting included a poster session for startups and a reverse venture-fair format that permitted startups to interact with the angel investors who had been invited to speak. The group will be holding its next meeting September 17, featuring successful angel investor John Ason.
There was also a panel discussion featuring seven investors. Brian Cohen, chairman of New York Angels (New York), made a rare appearance on the New Jersey side of the Hudson.
The investors gave a pitch for their angel group or groups. They then answered a question posed by Randy Harmon, technology-commercialization consultant with the NJ Small Business Development Centers: What is your the most important piece of advice for entrepreneurs seeking financing?
Joshua Trojak, operations manager of TechLaunch (Clifton), the New Jersey tech accelerator, advised startups to develop a strong and adaptable team. “We are looking for a team that has subject-matter experts, is adaptable, isn’t stuck to one model and … is very energetic and is willing to put forth the effort needed for a startup success,” he said.
New York Angels’ Cohen, who teaches people how to become professional angel investors, said, “I actually look for people who are huggable.” That may sound outrageous, he noted, but when it comes down to investing in startups it is a lot about the emotions.
Cohen’s advice to startups: Up your game. “Angel investing is drying up,” he cautioned the group. Angels aren’t making money. It’s rare for angel investors to have a positive portfolio these days, he said. Although the economy is getting better, angels are slowing down or stopping their investments.
“Whatever money is available is going to come from truer, harder-nosed angel investors who really want you to know what you are doing. I’ll take a bad idea with brilliant execution any day,” he said.
Yaniv Sneor of Mid Atlantic Bio Angels (New York) said that since so few angels actually understand bio and life sciences he and some partners formed a group exclusively for this type of investing. Sneor advised startups to ask investors what their “sweet spot is. Investors invest in what they know, and understand and what they like. … If you are in their sweet spot, continue the conversation. If not, move on.”
Jeffrey Snellenburg, who represented the Pennsylvania Angel Network, Delaware Crossing Investor Group (Doylestown, Pa. and Princeton) and Mid-Atlantic Angel Group (Philadelphia), said that his piece of advice to startups is to network. Startups should get to know the angel groups, figuring out what kinds of investments interest them.
“Both sides should look at it like a marriage. You are getting married for a period of time, hopefully not forever, because hopefully there is an exit. But you will be together for a period of time so you should be comfortable with the angel group that is making an investment in your company.”
Tom Sullivan of Princeton-based Innovation Garden loves N.J. and is passionate about it. “I think this state should have been a Silicon Valley. I think we had a chance to be that at one time, but it doesn’t mean we can’t get there again. We have passion in N.J. and there is an amazing cluster of expertise and industries. … Innovation comes from an interdisciplinary approach.” Innovation Garden, a cross between a coworking space and an accelerator, he said, fills the gap between accelerator graduate and Series A funding.
Sullivan said his best advice to entrepreneurs is “don’t fall in love with your idea. Use the idea as a springboard, but go talk to customers, and iterate, and talk to them again and iterate again. You will learn so much more.”
Katherine O’Neill represented Jumpstart NJ Angel Network (Mount Laurel), which makes investments in mid-Atlantic companies, for the most part. She put in a pitch for professional angel investors. “In this area you will sometimes find Wall Street types who will invest but blow a company’s valuation, and thus the company’s long-term viability. You want to look for smart money, money that can help a company grow.” Her advice: Understand that you are the person the angels are making the decision about, not just the technology.
Jonathan Hakakian of SoundBoard Angel Fund (Morristown) said his company invests in early-stage companies with understandable businesses. SoundBoard has invested in eight companies across the country, but primarily in the northeast U.S.
Hakakian’s advice to startup founders: Be a good listener. “That is the central component of the relationship. Don’t just preach and talk to your investors and the other team members, but listen to their feedback and their advice. … Internalize it and … even if you don’t follow it … at least you can use it to make better decisions.”
Earlier at the meeting, NJTechWeekly.com talked to some of the participants who had displayed posters.
Phil Kennard and Jonathan Fabio of Somerset-based Futurestay said their startup, which is a cloud-based vacation-home-management system, was starting to grow and that they were raising a funding round.
Representing T-Recs Technology Recreation Centers (Seargentsville, Hunterdon County), a technology-education camp for kids, Frank Cappelle said he was looking for funding to expand his camp to a full-time facility with 3-D printers, electronics and robotics.
Denise Spell of Currant (Newark) explained that her startup is solving the problem of a lack of hard data available to first responders after disasters. The company is integrating crowdsourced data into incident-management systems to provide tools for workers in the field.
Princeton Junction-based Vizzical displayed a poster describing its app for people to communicate with each other using context icons. “When you get an email, the subject line tells you what the email is about. However, when someone is calling you, you don’t know why they are calling you. When you know the context of a call, it is easier for you to make a judgment about whether you need to pick up the phone or not,” Deepak Vittal told us.
Voicemail is phasing out, he added. With Vizzical, you don’t have to listen to a long voicemail to figure out why people called you, he said.