July 31st, 2013 NY Founder Institute

On Wednesday, July 31, 2013, OLC attended NY Founder Institute demo event that featured Brian Cohen of New York Angels as keynote speaker and panelist; Jason Reynolds of ff Venture Capital, Jeff Stewart of Lenddo, Jeff Wald of Work Market as panelists. Seven startups pitched shortly after: emozia, Inkwell, HelpSource, Builder Buzz, VBient, One + Love, and Pathgather. Bryan Janeckzo and Gabe Zichermann, both Directors of NY Founder Institute acted as moderators.
The event started with Brian Cohen, keynote speaker. He explained that angel investing is actually a relatively new form of investing. “It’s only 20 to 30 years old,” he said. 
Cohen has been part of the startup world for over 40 years and he considers himself as a serial entrepreneur. 
“Angel investors don’t make money. It’s almost impossible to make money,” he said. “Returns are high if you’re a professional angel. The huge difference between professional angels and amateur angels is that as a professional, you’re cutting more than two checks a year. At New York Angels, we write checks, we don’t sit around and kick tires.” Cohen claimed that angel investors are “really the only choices.” After all, he and the NY Angels have invested in over 80 companies, investing more than $60 million. To 
Cohen, the focus of angel investing is to better the company—and to fill the funding gap between founders, families and friends and venture capitalists. 
“Angels are not in the investment business,” Cohen said. “They’re in it for the exits. And the most common ways are through mergers and acquisitions. Pure exits are extremely rare. The average wait for an exit is 9 years, but angels don’t care about that. VCs do. 
They have to meet a model. 
Cohen touched on the topic of angel exhaustion. “A lot of angels are putting money into dumb investments. It’s making us lose the ability to place rigor. We need to up our game,” he said. 
Cohen also listed a couple of rules for entrepreneurs to follow: 
1. You are in control: leadership.
2. Use time wisely
3. Know the customer: need large dealflow, decisive due diligence, need to have a smart deal
“VCs are interested in big markets,” Cohen said. “They’re driven by big market potential. Angels, they don’t care about that,” he said.
From here, the panelists took the stage to briefly answer questions that moderator Bryan Janeckzo asked.
Bryan Janeckzo: Welcome to this portion of the event. Can you introduce yourselves to the audience?
Jeff Wald: I’m the founder of Work Market. Our clients look for contractors and our software helps find them. I teach at the Founder Institute and I teach at General Assembly. The best thing that happened to us was that six companies spurned out from Work Market.
Jeff Stewart: We send money to strangers and they send money back. There’s a huge growing middle class and they have no access to credit. It’s really exciting to be part of a company early on and seeing it grow.
Jason Reynolds: I’m the Director of Engineering at ff Venture Capital. I’ve worked on social media and finance, but now I’m working with a lot of VCs. The New York startup system is phenomenal. There’s tons of intelligent people that want to help others.
BJ: What is your perspective on the changing landscape in New York?
Brian Cohen: I wish there was more smart money. Great companies will always find funding, but VCs seem to be backing away a little but and crowdfunding is jumping in a little bit. It’s tough to get money right now.
JR: I think the cost of starting a company has gone down dramatically. Twenty years ago, parents would look at you as if you were crazy, but now, it’s not. Instead, the startup world is booming. There’s a ton out there and that’s where the crunch is coming from.
JS: I think New York is the best place to be. The best way to attract money is to get revenue. If that’s not possible, the process of raising money—taking it to VCs, they’re going to give you great advice. Remember to close, though. You’ll learn more about your business. I’d also get people on the West Coast too.
BJ: Any parting words of wisdom?
JW: I’d give you the same advice I give to people who come meet with me. You need to be financially, physically and mentally ready. Don’t make any assumptions. If you’re not ready, you shouldn’t start. 
JR: You need to surround yourself with people you can trust and keep you grounded. You have to have a vision and stay true to that.
BC: Screw passion. Simply find a business problem that needs to be fixed. Learn it intimately. Drive the business concept home.
At this point, the event moved on to the startup pitches.
Aleksander Vukasinovic presented emozia.
“The problem that we faced was that we were very frustrated with the way we provide emotions over communication. It’s very inefficient,” Vukasinovic said. He and his team developed a platform that lets users see friends and family in real-time, and so forth. The app uses sensor analysis, as well as machine learning to determine how the user feels. A simple and elegant interface determines the user’s emotions throughout the day. The app enables emotive communication over distance and time. “We developed an open API to customize service to you,” he said.
Jack Reichert presented Inkwell, poised to disrupt the $26 billion publishing industry. 
“Publishers have been looking for overnight successes,” Reichert said. “That leaves authors with no support. The irony is that publishers have eliminated strategies to cultivate blockbusters.” He cited that self-publishing has increased since 2010, of over 300% and that self-publishing on Kickstarter doesn’t work, placing in second least successful categories. Inkwell combines the social aspect and recommendation engine of Goodreads and mixes it with some IndieGogo and Kickstarter. It’s slated to beta launch in September to a select group of authors. 
HelpSource was next, presented by Mavis Humes Baird. “We need a digital hub for users and consumers for treatments centers,” she said. “Via phone calls, it takes about a week because there is no central site for treatment centers. There’s no way to compare the actual sites and pricing and there’s no way to book online. There are over 100 million adults who are not finding help. HelpSource is going to be a catalyst. With total access to online, local and national resources, users will find every type of resources and can choose their own path to recovery.” 
Michael Lisovetsky presented Builder Buzz, an e-lance site, except for contractors. 
“Hiring a contractor is a very painful process. There’s no reliability in the market. 
There’s no transparency and lots of frustration,” he said. Builder Buzz uses an extremely easy model to solve this. Users snap a picture of rooms they want worked on, post the listing on Builder Buzz, hire a vetted contractor and they’re done! Lisovetsky incorporated a Pinterest board so that contractors have some designs to work with from the homeowners. “By ensuring transparency and providing it, all the headaches disappear. We become more valuable as users use us more and more. We also provide contractors with their own website within our domain name.”
Michael Su and Tristan Bel demoed VBient, which takes HDTV and uses it to show continuous video loops, to hide the black, coldness of the television screen. It changes the screen to fit the mood and the space. HDTVs are getting thinner and larger each year. 
They can even be substituted for windows—think Hunger Games. Su compared VBient to Songza and Pandora, but it’s much more than that. It’s immersive, responsive and continuous—not to mention universal.
Sean Apparicio presented One + Love, a community-based LGBTQ site. He prefaced that this was not a dating website. “This generation is looking for something radical. 
People are looking for an authentic experience and One + Love solves that. We use three screens to determine user’s sexual identity. We get the data that they provided and send it to a database where we pull information to send back to the user. This gives our results personalized data that’s sent back.” One + Love plans to market using social media, events and community outreach. The app is planned to launch in August.
Eric Duffy presented Pathgather, an enterprise LMS that helps the workforce learn more by learning together. “The enterprise LMS should help train your workforce,” Duffy said. “But it’s from the 90s. They’re popular because they’re necessary and about $2 billion are spent each year on it. People are not satisfied with LMS, but the industry isn’t responding.” Duffy believes that Pathgather is the perfect foil to the industry’s stagnant LMS pool. Its dashboard comes complete with a progress bar, follower feed, profiles, course completion. By making data public, it motivates people to complete as many courses they want—or need to. Drawing from thousands of courses available online, Pathgather users learn topics they are interested in. Its business model is to start out free, but move companies into a monthly subscription model based on the number of employees in the company.