16 things you should know about investors in New York

NEW YORK, USA – If you can launch your startup in New York, you can make it anywhere.

Well, that is not exactly true.

In one case, one app’s launch here registered downloads in Asian and Middle Eastern countries but not in New York where the founder lives, not even in the United States for that matter.

If you have a multibillion-dollar startup you want to scale globally, though, you have definitely come to the right place. It proves how launching in New York with its global media presence can make people everywhere take notice.

That means you are ready and you need a second round of investment, after getting your initial funding from the Ayalas’ Kickstart Ventures perhaps, to ramp up your quest for global dominance. You may need partners in the States to pitch for you, of course, depending on your plans.

This writer is also open to helping Philippine-based startups, but it is important to note here that eventually, the startup team or at least the founder has to come here.

Why New York?

The news this week about the Ayalas’ Kickstart Ventures and its aim to help global-ready Filipino startups is welcome news. It would be interesting to see how Filipino startups gain enough traction or eyeballs on their site or app, if not yet – an important consideration for venture capitalists here, although revenue is more important to others.

It makes sense for initial funding to happen there first, as any new venture has to start somewhere, whether it is targeting the global market or Philippine market.

The important thing is to scale a startup 10 times better against any perceived or current competitor. Marketing is the hard part these days; it is the technology that has become easy.

If you are a startup in Manila thinking of getting funded by an angel investor or venture capitalist in New York, here are some things you should know, understand, and compare against what Manila has to offer to New York, from investors who would rather not be quoted here:

1. Do you need an angel investor or venture capitalist? The former is initial funding; the latter has more money to give you an 18-month runway toward critical mass.
2. Are you fit for a venture capitalist or an angel investor? Study venture capital websites, blogs, and portfolio. Venture capitalists invest in themes, while angel investor, because they come from different backgrounds, almost always have a diverse portfolio.
3. How to get to investors. Get introduced through friends of investors or friends of friends of investors. It is all about connections.
4. How to best manage investors. The best thing to do is under-sell but over-deliver. This is very important to remember.
5. What venture capitalists to avoid? If your investor takes lot of your time and they have no control, stop spending time with them. Avoid those focused on deal terms. Focus on those that are aligned with your principles and values.
6. 3 things you need to know when talking to a venture capitalist. Your team, your market, your traction. If your market is less than a billion, do not ask for investment; that is not a venture capitalist business.
7. What types of venture capitalists do we have? There are two types of VCs here: hedgehogs and foxes. Hedgehogs are single-minded and tend to invest in teams with deep expertise. Foxes are more dynamic, more adaptable and more open to anyone with a transformative product and creating new markets.
8. Investors have biases like everybody else. They may have a bias for younger entrepreneurs, those living in cities, and even those whom they look like.
9. Know when you need to pitch. Angel investors hold quarterly pitch forums. You will also find accelerators and incubators accepting startup funding applications quarterly and may run a pitch training program for 3 to 4 months.
10. What is a no-no? No investor will read a business plan (but have one for yourself), because investors get it right away. Prepare an executive summary.
11. Big or small pie? A small slice of pie from a big pie is always better than a small slice from a small pie. Keep that in mind when you are seeking investment.
12. How much money will you need? Think of how much money you need. Then double it. You could also base it on your milestones, of course.
13. Research, please. Know who your competition is whether they are from China or the US. You should have done this before you launched.
14. Considered risky. Husband-and-wife teams worry investors, because they can split up unlike with an investor. You can not divorce investors.
15. Understand truly the GLOBAL market. Think global, not just local.
16. What is your secret sauce? Ask yourself why you are the best person for an idea.

These are only a few things in a long list, but it is a good start.

Hearing what it is like in the Philippines should help everyone understand all sides – the Filipino startup in the Philippines, the Ayalas’ Kickstart Ventures, and the investors in New York. – Rappler.com

Email me at dennis@reimaginetech.com Dennis covers the New York tech scene for various companies, including reimaginetech.com. Follow @dennisclemente

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