At the CoInvent Startup Summit held on Tuesday in New York, differing opinions on some founders’ intentions emerged among the discussions.
(The slideshow above offers a taste of the investors and entrepreneurs who spoke at the daylong conference.)
During the panel on “Getting Star Investors for Your Startup,” Brian Cohen, chairman of New York Angels, offered his usual acerbic take on startups’ quests for funding. Cohen said he believes everyone deserves an opportunity to speak about their ideas, but he will make it clear if he is not interested. “I get to the word ‘No’ fast,” he said.
Entrepreneurs need to understand the markets they are after, Cohen said, and if they cannot answer basic questions, they are out of the running. “A guy was trying to sell me on a ‘BirchBox for spices’ and I asked him to name the top 10 spices in the world—he couldn’t do it,” Cohen said.
Joining Cohen in the discussion were Somak Chattopadhyay, founder and managing partner of Armory Square Ventures, and Brad Svrluga, founder and general partner of High Peaks Venture Partners. Kelly Hoey, founder of Women Innovate Mobile and chief marketing officer at Cuurio, moderated the panel.
Differences arose among the speakers regarding the worth of passion as motivation in the startup scene. “I think passion has done more harm to the entrepreneurial community than anything,” said Cohen. “I’d rather you not be passionate. That blinds you.” He said he wants to see a savvy business person who can execute on an idea to solve a problem.
Media attention—including television series “Silicon Valley”—has put a touch of glamour on startups. In light of such publicity, Chattopadhyay said he wants to see if founders have the tenacity and persistence to break through obstacles they may face. “That’s the type of passion which I think is so important,” he said.
Svrluga called passion essential for founders, especially when it comes to convincing others to join them. He also wants to know what compelled founders to quit their own jobs to launch a startup. “That’s a crazy decision,” he said. “Why did you do it?”
Such questions, the panelists agreed, help them discern if entrepreneurs have the mettle to develop ideas into businesses. Chattopadhyay said his firm generally invests in founders who not only deliver a product but can also assemble a balanced team. “There are very few entrepreneurs who are able to do this successfully,” he said.
If a startup gets turned down by potential investors, Svrluga said, dedicated entrepreneurs should find out what turned them off. “You need to at least ask for the why and understand it,” he said. Entrepreneurs who learn from such input may be able to change that first, bad impression. “Two of our best performing portfolio companies are things that we said no to,” Svrluga said.