BRUCE KAMINSTEIN ‒ NYA MEMBER SPOTLIGHT
Bruce Kaminstein joined New York Angels in 2020, and he has been a key member for expertise in consumer products and supply chain. As the Founder of Casabella, a global housewares product company which successfully sold to Bradshaw International, he brings in expertise in driving profitability for retail and consumer brands, domestic and international manufacturing, product development and sales. Bruce shares his perspective on why he looks to invest in companies that are making the world a better place, how he helps founders understand supply chain and purchasing in China, and why founders really need to understand whether they need funding or not.
How did you meet New York Angels?
I was stand-up paddling with a friend, Rob Kaplan, and he mentioned that he was a New York Angels member. In early-2020, Rob invited me to join him as a guest in a NYA meeting, and I was so invigorated. I had sold my company a few years prior and had continued working for them, but after much thought, I decided I wanted to spend my time doing something different. I formally joined NYA in the summer of 2020, and NYA turned out to be a perfect fit for me.
What has been your most memorable experience as a New York Angel?
The first couple of NYA meetings that I attended were all in-person. Seeing all the pitches live made me really excited about joining NYA. I love seeing the passion of entrepreneurs.
What do you look for when you are investing in a company?
When I first started investing, I was looking at all the companies that pitched to NYA. A lot has changed since then because I have learned a lot about investing and what’s important to me. First of all, I would like to make the world a better place. I’m most excited about companies that are doing something good – not just making another consumer product. Sustainability is important to me, particularly products that use less plastic.
While the company’s valuation is important, the founder and the idea are even more so. The founder needs to have a combination of confidence and humbleness. I want to know that they are confident that they will be able to survive the tough times. I also want to make sure they are coachable and are open to feedback. The idea, of course, is also critical, but if I think the founder is arrogant, I will not invest, even if the idea is great.
Companies also must have decent margins that can support a DTC campaign that will show profitability in the distant future. I do not like to see an endless stream of marketing dollars thrown out just to get volume – I think those days are gone. It’s important to see that a company will have positive cash flow some time in the future. I also like to see a retail strategy after the DTC campaign to reduce marketing spend.
What do founders like most about working with you?
I like to invest in deals that I can give some kind of value to the founder. For example, I am on the board of Fuego Dance. I speak regularly with the founder – Kevin, and since I’m not a dancer, I can’t give him any dance advice. But he doesn’t need dance advice. I understand supply chain, purchasing in China, procuring product, running inventory and managing other operational challenges – these are the conversations where I add value.
What differentiates companies that you see at Screening versus those who make it through to Due Diligence?
In a 10-minute pitch, it is very hard to understand the ins and outs of a business. A company may be intriguing during Screening, but when you open up the hood a little in Due Diligence, you may find the founder didn’t discuss all the competition, or the numbers don’t make sense, or the company is too aggressive with its forecasts. You can also identify the quality of the founder by how they react in a 2-hour Due Diligence session vs. a 10-minute Screening pitch.
What advice would you give founders who are starting to fundraise?
Founders need to ask themselves: “Do I really need to fundraise? Do I really need it?” If the answer is yes, they should be extremely conservative in their estimates and then try to beat them. They need to be able to defend their projections and show how they will put the money to good use. Are they going to still be scrappy after they raise money? Are they hiring extra people that they don’t really need?
Founders also need to show their passion for their idea and their ability to pivot when necessary. Whether a company is a startup or a big billion-dollar brand, there are always hiccups, and the founder needs to be able to pivot.
When you look at your past investments, what advice would you give founders to deliver a successful exit?
1) Don’t go on wild goose chases. Be super focused on your idea.
2) Make pivots when needed. You may need to make changes to your business model. You may need to fundraise again. You may need to rethink your target customer. Stick to your numbers as much as possible, but you should expect to pivot from your plans.
3) Be passionate. Having that passion will get you through challenging times. You can’t just give up. You have to always keep fighting.
What advice do you have for newer NYA members?
Invest with your heart. Have a mission. Yes, I want to make a return in my investments, but I want the ideas that I invest in to be good. If you have passion for the company and their mission, hopefully you can also help them.
