ENDRI TOLKA ‒ NYA MEMBER SPOTLIGHT
Shortly after joining New York Angels in 2020, Endri Tolka co-led his first major deal. His active initial engagement has been representative of his leadership these past few years with NYA. Prior to NYA, Endri co-founded YouVisit, a proprietary SaaS-based technology platform to enable deep user engagement and drive conversions through highly interactive 360° experiences across VR/AR, mobile and web. YouVisit worked with universities and Fortune 500 companies and grew to nearly 1,000 institutions around the world. Endri built and scaled different Go-to-Market functions (on-boarding, Client Success) and operational functions (Accounting, Finance, People Ops and Legal) while leading a team of 55. At the end of 2019, Endri sold the company to Vista Equity Partners and now acts as an advisor to several startups.
How did you meet New York Angels?
I was an entrepreneur who founded a SaaS company, providing highly interactive experiences for colleges and universities to attract students using VR mobile and websites. We successfully expanded our reach to ~1,000 universities worldwide before ultimately selling the business to Vista Equity Partners. In late 2019, I connected with several New York Angels members throughout this experience. At the end of 2020, I decided to join the group after a few of the members recommended me. My decision was not only driven by my interest in startups but also by the extremely positive experiences I had with many of the members.
What has been your most memorable experience as a New York Angel?
Within a few months of joining New York Angels, I co-led the Series C funding for Allstar, a gaming company, alongside Michael Costa and Cindy Cook. Through this experience, I learned so much from both of them, e.g., how to run a successful due diligence process, how to negotiate a term sheet, and important things to cover in the term sheet. More importantly, I really got to know the founders well. It has been very exciting to see their impressive progress and accomplishments in such a short time.
What do you look for when you are investing in a company?
Initially, I mainly focus on the team. I typically like investing in teams who are solving problems that they personally have experienced. I find that when founders have had those types of experiences, they really are passionate about the problem. I also look for founders who have a technical co-founder onboard – ideally founder teams with a technical co-founder complemented by a sales co-founder, both who are deeply committed to the products and the need they are solving for.
Secondly, I prioritize the speed of execution. I've come to recognize that a company's true competitive advantage lies in its ability to execute. For me, how fast they're shipping product is the number one driver of whether the company is going to be successful or not.
Thirdly, I emphasize a strong client or user obsession. I find that when founders are focused and client-facing first, they are going to be more successful. Ultimately, if you’re building a really good product that is actually solving a need for your client, you’re going to be successful.
What do founders like most about working with you?
As a founder and advisor to numerous startups, I typically understand the challenges they’re going through. I offer real, practical feedback, and typically they have issues that I’ve solved in other companies. I can talk to founders about issues that I had when I was in their shoes.
Secondly, I try to coach founders on how to identify the true levers of their business and how to manage them. When you're running a company, it can be very hard for you to see the forest from the trees because there are a million things happening in your company – things that you believe are truly important may not be as important. I help them clear their head and focus on what truly matters. It is crucial to be outcome-driven and reduce complexity for them. As their team grows, everyone becomes project- or task-oriented, which places the responsibility on founders to drive outcomes and guide their teams to be outcome-based, not activity-based. That’s a big challenge while you’re dealing with so many issues day-to-day. Ultimately, founders need to focus their team on what’s really important: What are you selling? Are you growing? Are you retaining clients? Are you building things that are important for clients?
What differentiates companies that you see at Screening versus those who make it through to Due Diligence?
Typically, companies that make it to Due Diligence have some traction that demonstrates they are tackling a true need for their clients. They also are operating in a sufficiently sizable market that can yield returns for investors. Generally, lifestyle businesses do not make it past Screening – while lifestyle businesses are typically great for founders, they don’t make sense from an investment standpoint. Given that 95% of businesses fail within three years, as an angel investor, you’re really trying to find the needle in a haystack – the one company that could grow 20x to 100x your initial investment. You lose with most of the investments that you make, so given that the numbers are against you, you're really looking for a company that can generate the huge return. Typically, one company can pay for all of the other losses. While lifestyle businesses can have great cashflow generation, investors typically don't invest in those types of companies.
What advice would you give founders who are starting to fundraise?
First, you need to have a clear vision and a plan for reaching your goals. If you have a defined vision, it becomes straightforward to articulate where you want to go, the steps to get there, and how much money you need.
The next important part is outlining your business plan – how many people you'll need and then overlay the financial plan on how much money you need. Typically if you can go to investors and pitch them on that vision, the plan, and the necessary funds to execute on the plans, I often find that investors are more inclined to invest. Investors invest in founders who can communicate a clear vision and a practical plan rather than those who may lack understanding or attempt to present what they think investors want to hear, using excessive jargon, a lot of abbreviation, or buzzwords. Founders should avoid unnecessary complexity and simplify their pitch. An easy way to do this is to start the first slide with a concise statement like, “My company sells X product to solve Y need for Z customers.”
I’ve been in pitches where we are an hour into the discussion and I still don’t know what the company does to make money. It’s very hard to invest in a company like that. I’ll tell them, “Go back to the beginning. What do you sell? Who do you sell it to for what amount of money? What is the need that you're solving for?” If you cannot communicate that well, especially in a deck, it’s very hard for me to say I want to hear more from this founder because they’re not clear thinkers.
The easiest way to fundraise is when a founder is presenting what they’re going to build, regardless of whether they raise money or not, and they view the potential investment as just an accelerant to their business. It’s an easy decision to make from an investor standpoint to say yes to writing a check when the founder understands the market, they know how they're going to get there, and all they need is money.
When you look at your past investments, what advice would you give founders to deliver a successful exit?
Considering that the exit process usually takes anywhere from 10-12 years on average and I am in the early stages of my investing career (around 4 years now), I haven’t really seen too many exits. However, the primary focus for founders should be on delivering value to clients and the best way to achieve that, which is by providing a product that their customers are willing to pay more and more money for, year after year. If customers are showing that they’re increasing their spend and they’re staying for a long time, that shows the founder is focusing on the right things. Finally, if they’re building a great internal culture, the exit is going to happen naturally. Founders need to just focus on their business and their customers, and the exit will happen when it’s the right time.
What advice do you have for newer NYA members?
My advice is to take your time and thoroughly understand the companies you're investing in, as well as the market you're playing in. You should clearly define what you’re trying to achieve because this is really a long-term game. There are going to be very few quick wins, and typically those are big wins, if they happen fast. Focus on whether you are investing for the right reasons and refrain from investing too much right away. You should take your time, so you can allow yourself the time you need to understand your own investing style. Also, identify the industries and founders that you want to invest in and then conduct thorough research in those areas.
What other advice do you have for founders?
My recommendation to founders is to accelerate. Move fast and ensure that you are driving your team to accelerate. You should engage in conversations with your customers to provide as much value for them. Ultimately, your success hinges on being successful with your customers. If you succeed in providing value for them, you will be successful in your own business.
