Tag Archives: HBS Alumni Angels of NY

When Should I Apply for Angel Funding?

Posted on by

So you decided to apply to an angel network for funding.  When is the best time to apply?

Before you run out of money, of course.  But most startups these days have some flexibility given the low cost of lean design as well as funding from self, friends and family.

If you have a truly exceptional startup, or a truly exceptional track record, don’t wait, apply asap.  What is a truly exceptional startup?  As Justice Potter Stewart said in 1964, “I know it when I see it.”

If you are in the other 99.8% of startups, you should be more strategic about timing.

Some angel groups like to be the first outside funding source.  These favor earlier companies with lower valuations, and regularly lead rounds of $500k and up.  For them, the sooner you apply, the better.  Consider them as soon as you need funds beyond friends and family, and have a hint of demonstrable traction.  New York Angels is one of these groups.

For most all angel networks, better to try to wait until you have basic business traction, which I see as:
  1. A working product,
  2. Some revenue and market validation,
  3. Your co-founders are in place (e.g., “I’m looking for a co-founder with [insert skill]” is a red flag.)
It is also better to wait will you have some basic financing traction.  This means:
  1. You have a credible lead investor,
  2. You have at least $100-200k and 20% of your round committed,
  3. You have deal terms largely agreed by the lead and committed investors.

Yes, this is an chicken and egg problem. How do you get there without funding?  Wing it?  Sorry about the pun.  Here’s where being a scrappy entrepreneur is a plus.

Most companies that raise angel network funding successfully do so after they have some business and financing traction.  There are many more entrepreneurs seeking funding than there are early stage angels and VCs.  Supply and demand means that investors can wait, at least in most cases. Harvard Business School Alumni Angels is one large angel network that prefers companies with at least some basic business and financing traction, and most angel networks fall in this group.

Waiting and self-funding for more months than you’d like isn’t fun.  But it may save you time and money, and lead to more fun over the long haul.

Some additional suggestions as your move ahead:
  1. Focus first on angel groups and micro-VCs who could lead your round.
  2. If you do pitch before having a lead investor committed, be prepared for other investors to wait until you find a lead.
  3. Put forward your ask for funding amount and terms, and indicate that you are negotiable once you identify a lead.  [If you say that terms are “TBD and up to the lead” you risk coming across as clueless].
  4. Don’t be so greedy that spend too much time with a funding ask that is above the market, and you run out of money and never raise a dime.
  5. Never insist on a SAFE note with a serious angel.  They know that is so unfavorable to angels that it can easily be a worthless investment in at otherwise successful company.

Good luck!

 

HBS Angels of NY Announces a new VC Advisory Board

Posted on by

HBS Alumni Angels

The new Venture Capital Advisory Board for the HBS Alumni Angels of New York is comprised of leading, senior-level, NY-area venture capitalists who are advising HBSAANY on its growth and development.

  • Chip Austin, Co-Founder & General Partner, i-Hatch ventures
  • Jordan Bettman, Principal, Bain Capital Ventures
  • Deborah Farrington, Founder & General Partner, StarVest Partners
  • Matt Gorin, Co-Founder & Managing Partner, Contour Venture Partners
  • Rick Heitzmann, Managing Director, FirstMark Capital
  • Jim Robinson, Managing partner, RRE Ventures

Meet the Committee

Chip Austin, Co-Founder & General Partner, i-Hatch ventures
Chip has advised and built companies in Technology and Media for his entire career. In addition to founding BOL.com, Bertelsmann’s E-commerce division, Chip was a member of the senior executive team leading the buyout and restructuring of Prodigy, and was a co-founder of McKinsey’s Interactive Practice, where he spent seven years advising Fortune 500 companies on their media strategies.

Most recently, Chip was President and CEO of Bertelsmann Online, where he was responsible for building Bertelsmann’s global e-commerce business. Chip was the first employee at BOL, and built parallel services in the UK, Germany, Spain, Netherlands, France (via joint venture with Vivendi/Havas), and the US (via Bertelsmann’s 50% investment in BarnesandNoble.com). Chip served as Chairman of the Board of BOL France, and was a Board Member and officer of Doubleday Direct, BCA, BOL, Inc., and Bertelsmann’s E-commerce Control Board. BOL has been the recipient of several industry accolades, including CeBIT Innovation of the Year Winner and the highest rated European e-commerce site by a Forrester Research.

For the launch of BOL, Chip secured internal capital of over $400 million, built a world class team totaling over 200 people in six countries, partnered with strategic vendors such as Oracle, Don Peppers, Ogilvy & Mather, Fleishman-Hillard, Net Perceptions, Cambridge Technology Partners, USWeb and Sun, negotiated major strategic and marketing alliances with major Internet portals such as AOL, Compuserve, DoubleClick, EMS and Earthlink, and established back-end operations, including call centers, fulfillment, logistics, financial clearing, and warehousing, in each country of operation.

Chip maintains an advisory and investor relationship with Bertelsmann Ventures, an independent venture capital fund capitalized by Bertelsmann. Chip also served as Acting CEO of European-based DealPilot.com, a Bertelsmann Ventures portfolio company. DealPilot.com, the first commercial Internet-based comparison shopping service, subsequently sold a majority of its shares to Bertelsmann and then merged into Shopping.com (NASDAQ:SHOP).

Prior to Bertelsmann, Chip was a member of the management-led buyout of Prodigy, where he was SVP of Sales and Business Development and General Manager of Prodigy’s first Internet Service. While at Prodigy, Chip built an ISP from scratch, launched Prodigy Internet, which replaced Prodigy’s Classic proprietary service, and was responsible for all customer acquisition and subscription revenue. In addition, Chip was responsible for all major account relationships, including OEM channels such as Packard Bell/NEC, and technology/distribution providers, such as Microsoft, Netscape, and Excite. Prior to sale to SBC, Prodigy’s initial public offering had a market capitalization that had exceeded $3 billion dollars.

Before joining Prodigy, Chip spent seven years at McKinsey in the Media and Interactive practices advising clients out of New York, Los Angeles, Australia and various European offices. While at McKinsey, as a co-founder of the Interactive Practice, Chip shaped the New Media strategies of the world’s largest media companies in the fields of newspapers, magazines, yellow pages/classifieds, cable programming, network TV and film studio production.

Chip is a frequent keynote speaker and panelist on Technology, Media, and Angel Investment-related topics as well as serving on the boards of several public and private companies. Chip has also worked at Morgan Stanley’s Investment Banking division and IBM’s Personal Computer division during the launch years of the IBM PC. Chip has a degree in Computer Science and Economics from Duke University, and an MBA from Harvard Business School.

Jordan Bettman, Principal, Bain Capital Ventures
Jordan joined Bain Capital Ventures in 2008. Since that time, Jordan has worked on both early-stage and growth-equity investments in a variety of industries, including data services, marketing services, financial services and technology, and digital media. He has also worked closely with numerous portfolio companies on senior level recruiting, strategic planning, business development, and company exits. Prior to joining Bain Capital Ventures, Jordan was an associate consultant at Bain & Company, focusing on a number of strategic and operational issues for clients across a handful of sectors. He also worked in Bain & Company’s Private Equity Group, performing diligence on multi-billion dollar companies.

Jordan received a BS in Industrial and Labor Relations from Cornell University and an MBA from Harvard Business School.

Outside of work, Jordan enjoys outdoor sports, especially skiing and golf. Additionally, Jordan is a member of the Social Investment Council of Echoing Green, a Board Member of the Boston MS Gala, and a part owner of a restaurant. He and his wife, Lauren, now reside on the Upper East Side of Manhattan.

Deborah Farrington, Founder & General Partner, StarVest Partners
Deborah Farrington is a founder and general partner of StarVest Partners, a New York City-based venture capital firm founded in 1998.

StarVest invests in technology-enabled business services companies with a focus on software-as-a-service, ecommerce and internet marketing. StarVest was an early investor in the software-as-a-service trend: in 2000, it invested as the only venture firm in NetSuite (NYSE: N) whose December 2007 IPO, at the time, was the highest market capitalization for a venture backed company since Google. Other noteworthy investments where Ms. Farrington served on the board include Fieldglass, acquired by Madison Dearborn, and Insurance.com, bought by QuinStreet. Prior to founding StarVest, Ms. Farrington held positions including: President and CEO of Victory Ventures, LLC, a New York-based private equity investment firm where she also served as chairman of Staffing Resources, Inc.

Ms. Farrington currently sits on the Boards of NetSuite, where she is lead director and chairman of the Compensation Committee, Xignite, Host Analytics, and PivotLink on behalf of StarVest. She is also a director and chairman of the Compensation Committee at Collectors Universe, Inc. (NASDAQ: CLCT). She was named to the Forbes Midas 100 List of top venture capitalists in the United States in 2008, 2009 and 2011.

She is a graduate of Smith College and holds an MBA from Harvard Business School, where she is a member of the Dean’s Visiting Committee. She is also a member of the President’s Advisory Council and investment committee of Smith College; a board member of the Harvard Business School Club of New York City; a member of The Committee of 200 and the Economic Club of New York; and a board member of Opportunity International, a leading international microfinance organization.

Matt Gorin, Co-Founder & Managing Partner, Contour Venture Partners
Matt Gorin is a co-founder of Contour Venture Partners and has experience in technology operations, start-ups, venture capital and turnaround management. He is passionate about helping to build early stage companies, with a focus on the financial services, internet and applied technology sectors. Contour invests in seed and early stage technology companies in the northeast United States with a focus on the financial services, digital media and the internet sectors.

Matt was previously with Promontory Financial Group, a merchant banking firm focused on the financial services sector. He was part of the launch team at Promontory Interfinancial Network, a financial services technology platform company which has subsequently grown to over one hundred employees. Prior to this, Matt worked for Red Hat in its Strategic Planning & Corporate Development group where he was responsible for starting Red Hat’s Independent Software Vendor (ISV) Partnership Program, ultimately establishing extensive business and technology partnerships with many of the top global independent software vendors. Matt also worked at Morgan Stanley in its strategic venture capital fund, concentrating on making investments in early-stage financial services companies. Earlier in his career, Matt was a turnaround consultant at PricewaterhouseCoopers, where he helped devise and implement operating strategies for troubled companies in various industries.

Matt is the Founder of StreetWise Partners, a nonprofit focused on providing low-income individuals with a path to a successful career through mentoring, job skills and professional experience. He co-authored a Harvard Business School case study analyzing the origins of free trade and a paper in the World Economic Outlook on the economic and political risks in the Middle East.

Matt received his M.B.A. from Harvard Business School and B.A. in Economics and American Studies from Brandeis University, where he was co-captain of the tennis team.

Rick Heitzmann, Managing Director, FirstMark Capital
Rick Heitzmann, a founder and managing Director of FirstMark Capital, focuses on investments in the media, adtech, gaming, and mobile sectors. Prior to founding FirstMark Capital, Rick was a Partner with Pequot Ventures. Rick also serves on the Board of Directors of the New York Venture Capital Association.

Current ventures include: dashlane, Live Gamer, Meteor Entertainment, Pinteret, Playnomics, SneakPeeq, Sulia, Tapad, Tubular, WePlay. Historical investments include: Clickable (acquired by Syncapse in 2012), Riot Games (acquired by Tencent Holdings in 2011), FirstAdvantage (acquired by First American in 2009), StubHub (acquired by eBay in 2007), and US Search (acquired by First Advantage in 2003).

Rick received a B.S. from Georgetown University and an MBA from Harvard Business School. Rick has traveled all seven continents and is a huge Philadelphia sports fan. Friends claim he has seen every movie on Netflix.

Jim Robinson, Managing partner, RRE Ventures
Jim Robinson is a Co-Founder and Managing Partner at RRE Ventures. He has been active within the technology community for nearly 30 years as a venture capitalist, entrepreneur, banker, and futurist. Jim received his B.S. in Business Administration from Antioch College, and his M.B.A. from Harvard Business School. He is an MBA program lecturer at Columbia Business School and Stanford Business School, and a PhD / Master’s program lecturer at CUNY Baruch and The New School.

Ex-Officio members
David Teten, Chairman, HBSAANY; partner, ffVC
Jason E. Klein, Chair, External Relations, HBSAANY; founder/CEO On Grid Ventures