NYA FOUNDER SPOTLIGHT ‒ DAVID STEINBERGER, DSTLRY CO-FOUNDER & CEO
DSTLRY CEO & Co-Founder David Steinberger is working with New York Angels for the second time in his career. David first met NYA with ComiXology, which won the 2007 NYU New Venture Competition, secured NYA Member investment, and was acquired by Amazon in 2014. Now, David along with Chip Moser (former Head of Content at ComiXology) are redefining the comic book industry with DSTLRY by giving comic book creators equity and ownership in their work. David shares his story about how he originally came to New York to pursue a career in opera singing, how being a second-time entrepreneur is much easier, and how building trust with investors and industry professionals led to the success of DSTLRY.
How did you begin your journey as an entrepreneur?
I originally came to New York to pursue a career in singing. I attended the Manhattan School of Music, and then I went to Juilliard for graduate performance degrees. I dreamed of becoming an opera singer, but it’s an incredibly tough industry. Entrepreneurship may even have a better success rate of people who make it considering the number of people who can make a living off their dreams. Over time, I realized I didn’t want it badly enough. I also didn’t want to give up my New York apartment, so I decided I probably needed to learn something to make money.
Growing up, I was exposed to technology early because my father worked at Control Data Corporation. We had a terminal PLATO and mainframe at home, which introduced me to multi-person chat, online bulletin board systems, and even interactive learning games in the late 1970s. Since then, I’ve always had a computer on my desk, and I’ve used it to solve problems, e.g., when I was a student, I developed Apple script to schedule and record the opera.
Eventually, I decided to get my MBA at NYU while working part-time. Around that time, my parents made me retrieve my comic book collection. I wanted to catalog it and realized there weren’t any good software options. This idea led to my first entrepreneurial venture in 2006. I was inspired by iTunes and its ability to catalog CDs through the CDDB database. I thought, “Why isn’t there something like this for comics?” Comics fans love tracking details like first appearances of characters, pricing, and storylines.
So I teamed up with my co-founder, John Roberts, who had worked for Marvel. At the time, he was trying to keep up with which comics were launching. We were a good match. Together, we developed ComiXology, which eventually became the leading digital comics retailing reading app for iOS.
How did you first meet New York Angels?
We entered NYU’s business plan competition, which was a great learning experience. I was heavily invested in the competition. I spent a lot of time in the library researching the comic book industry and identifying the size of the market. I went to an entertainment conference at Columbia University to hear one of Marvel’s Board Members speak. We worked with NYA Founder David S. Rose as our presentation coach, and one of our first-round judges Kit McQuiston, who subsequently became a NYA member. We ended up co-winning the competition. For perspective, the year before, the founders of Pinterest won the competition. At the awards ceremony, Kit McQuiston asked us if we needed any money to grow into something bigger. David introduced us to New York Angels. I then met Brian Cohen, who also attended a dinner with some of the New York Angels. We were very grateful to have New York Angels support us from the beginning.
What was the process like for you when you were fundraising?
Raising money in 2007 and 2008 was incredibly tough due to the financial crisis, so we are thankful New York Angels and other angels took a chance with us. With ComiXology, we never took bigger investment than angel investment. We had a two-part investment structure, so when we missed milestones tied to funding, we had to bootstrap for a while. After we built up some traction, we came back to New York Angels, and they made a follow-on investment. In 2011, we extended our app to be white labeled by publishers. We made Marvel and DC’s apps. We became the leading platform in digital comics, and consequently in 2014, we sold ComiXology to Amazon. I spent eight years running Amazon’s comics worldwide and manga business.
Then in 2022, I decided to leave Amazon to start another business, but I didn’t really know what that was going to be. One of my former team members had this business idea that became what now is DSTLRY. It was much easier this time as a second-time entrepreneur. New York Angels have invested two rounds with DSTLRY.
What were you looking for in investors when you were fundraising, and why did you choose to work with New York Angels?
Through the NYU business plan competition, we were able to work with Kit and David before we started fundraising. We have built a relationship of mutual trust with New York Angels over decades with ComiXology and DSTLRY. I have remained good friends with Kit and Brian, and they continue to be great advisors.
What have you enjoyed most about working with New York Angels?
The diligence process with New York Angels has been invaluable. Each interaction helps me better understand what investors prioritize. It’s a different kind of experience to have that many investors from different areas of expertise asking questions that are important to each of them. Each of the NYA Members has had great success as an entrepreneur or running a business. Going through diligence with them is like a training ground for refining your pitch. The collective wisdom and experience of the group are unparalleled, and I always leave those meetings more prepared to engage with other investors.
What advice would you give other founders who are looking to fundraise?
Besides the basics of finding an addressable market that is venture worthy, here are a few thoughts:
Come up with your idea, put it out there quickly, start taking the temperature of the market, and go as far as you can without fundraising. If you come up with something that has a kernel of something working, and it's in an addressable market that's very large or very splintered, then you’ll be able to define a clear opportunity is and drive velocity.
Addressing feedback on your business plan is kind of like an art. Stick to your vision if you really believe in it, but you also need to hear out potential investors, particularly people you trust, because you'll often change your angle or find another opportunity beyond what you were initially thinking about.
You have to have a certain fortitude to get through the tougher times. Almost every company goes through a moment of near existential crisis before they turn the corner, often due to timing of contracts versus cash or a lengthier development timeline than expected. During these times you’ll need to pay yourself very little to make it work, but you will survive.
What advice would you give other early-stage investors who are looking to invest in companies?
It may seem cliché, but the most important thing is to bet on the people. Look for entrepreneurs who are honest, knowledgeable, and resilient. We have seen a lot of digital comic companies over the last few years run by people who weren’t forthright about their capabilities or connections, and it’s easy for investors to be fooled in a quick pitch. A lot can come out with how entrepreneurs answer the tough questions. I think that we have always been successful by being honest and sharing what I didn’t know or that our prototype wasn’t working quite yet. Ideally there’s some kind of behavioral interviewing that can cut through the bullshit.
What has driven DSTLRY’s success?
First off, we’re dependent on the creators that we work with creating work that people want to buy. So we really owe it all to the creators.
That being said, trust has been central to DSTLRY’s success. Over the past decade, my co-founder Chip and I have earned a lot of trust. Between the two of us, we have over 30 years of experience in the comic book industry, and we’ve built a reputation for treating people well and delivering on promises. We are open to critique and discussion. We brought in the top creators in the industry as part of our founding creator group, and there's just no way we could have done that without reputation. This is also the same reason why investors continue to back us.
