JOSHUA POWE ‒ NYA MEMBER SPOTLIGHT
Joshua Powe joined New York Angels this past April. Since joining, he has been active with co-leading investment rounds and referring companies. Josh brings expertise from a variety of industry sectors, including digital media, hospitality, and educational technology. Prior to New York Angels, Josh served as co-Founder and CEO of LinkIt!, a web-based K-12 assessment management platform with over $20m in ARR. In this interview, Josh shares how he presented to New York Angels as an entrepreneur in 2014, his "hilarious" experience volunteering to co-lead deals, and why it's important - and hard - for companies to be capital efficient.
How did you meet New York Angels, and why did you decide to join?
I first encountered New York Angels as an entrepreneur about ten years ago when I pitched my company to them in 2014. Although I didn’t receive an investment, I was really fascinated by that experience. I used it as a learning experience for myself, and I think it was an important part of my journey as an entrepreneur and operator. Since that point, I’ve aspired to join an organization like New York Angels. I felt it was a great way for me to see what other entrepreneurs were working on and potentially help them in their journeys, just as mentors and angel investors have supported me in my journey. It has been an important way for me to give back to the community of early-stage entrepreneurs and founders, as well as potentially other investors.
What has been your most memorable experience as a New York Angel?
I’ve only been a member for a few months, so I’m not sure there is one particular experience that stands out, but one memorable experience was during my first Screening meeting. I volunteered to help with Diligence or co-lead the Diligence team for maybe four or five different companies, which everyone found to be quite hilarious. I wasn't trying to be an overachiever, but I may have underestimated the time and focus that was required on the investor side to successfully complete an investment round. Overall, it was a great way for me to dive in and contribute. Another memorable experience was when I introduced my first company, Nestment, to New York Angels. I was excited to see the positive reception that they received. It wasn’t necessarily a pivotal moment, but it was an opportunity for me to add value through my professional and investment network.
What do you look for when you are investing in a company?
There are so many things to look for when you’re investing in companies, it’s hard to have a coherent short list of criteria that’s also differentiated. Overall, I like to look at companies that are capital efficient that have demonstrated they can do a lot with relatively little. Ideally, they haven’t taken institutional funding yet, but that’s where we see a diversity of companies with New York Angels. Some are coming in with venture-led rounds, but I like it before they are at that stage, and they’re still really having to scratch and claw their way to success.
I like companies where the founder, or at least the CEO and some of the executive team are dynamic, bold, and willing to take risks to propel the company forward. Finding the right balance between doing that and being capital efficient is hard. I also appreciate founders who are a bit non-traditional as I certainly don’t believe everybody has to go to Stanford or Harvard to be successful. I put a premium on diversity on race, gender, educational background, and age. Many times, I’m leaning towards older founders who have a track record in other areas before they’ve come to lead their own business because the seasoned professionals have seen things go both right and wrong across a longer career. The data actually shows they have a higher probability of success when it comes to launching their own venture.
I’m sector-agnostic, although most of my investments have been in tech and tech-enabled businesses. I led a SaaS platform in the ed tech space from essentially foundation to exit over a 15-year period, so that’s the space I know best. The diversity of companies that New York Angels sees is a welcome departure from where my operational experience comes from, so I do like to look at deals where there is ample opportunity to grow in legacy markets ready for disruption.
What do founders like most about working with you?
I think that founders typically say that I’m generous with my time, but more than anything else, that I’m willing to share my insights as an operator who has 20+ years of experience running companies and also investing in companies. I am an advocate for what they’re trying to do, and I make every attempt to be accessible. I’m transparent, and really want to be very clear and intentional about:
what I do and why
the decisions I make
if I can help (or I think I can help) or if I can’t help
I aim to be straightforward, and I think founders appreciate that they’re not being strung along. I offer advice that is actionable and practical, not just platitudes that are sometimes given by investors. Inventors can act like there is a black box or secret sauce to investing, as if what we do is a science, and they are not willing to signal any real level of doubt or vulnerability. The reality is that I believe there are a lot of ways to win – not just a single path forward.
As an investor who is willing to help companies grow, I help founders think about creativity and problem solving more broadly, whether that’s as an advisor or board member. I truly enjoy mentoring, but it also improves my chances of recording a win as an investor.
What differentiates companies that you see at Screening versus those who make it through to Due Diligence?
The volume of quality companies that New York Angels sees and processes on a monthly basis is very significant. Many of the companies, even at Screening, are coming in with established products in market, polished entrepreneurs, some customer traction, and often financing from other investors. It’s already a high bar to check off those boxes. If you’re lacking any one of those areas: e.g. if your presentation is not polished, if your go-to-market strategy is not clear, if your total addressable market is too small or perceived to be too small, if you don’t have any committed financing, if your valuation expectations are out of line, it’s difficult to secure interest from a critical mass of angels. It’s a challenging time for early-stage ventures to raise money, and that creates a lot of competition for companies applying to angel groups or VCs with reputations like New York Angels.
What advice would you give founders who are starting to fundraise?
In today’s challenging fundraising environment, I think it’s increasingly important to do as much as possible with as little as possible. I coach founders to think about the fundraising process as asset accumulation. Pre-product companies are tough without some evidence that somebody cares about the product that you are attempting to build. I’ve been seeing 2nd or 3rd time founders who are struggling to raise capital if they don’t have a coherent plan and product with traction. If you don’t have all of these, it’s not a long-term problem, you just have to be more creative about checking some of those boxes before formally fundraising.
I also hear a lot of stories of founders taking 500 meetings before they get a “yes” from investors, which seems to me like going in naked and hoping for the best. Instead, I strongly recommend working smarter to anticipate your vulnerabilities and creatively close the gaps, so you increase your probability of success.
Finally, don’t worry too much about your valuation. I feel like a lot of founders are tripped up by an idea of what their company is worth, or a vision of what it should be worth, and that becomes the death knell for so many founders that might go on to tremendous success. They're so fixated on the valuation of the company above all else, thinking that anything less than $10 million or $20 million is equivalent to failure because that's what somebody told them, or they read some magazine article where that was the number for a similar company. I would just say that to get a win, you need the right strategic advisors, e.g. board members, financial partners. If you let an unrealistic valuation get in your way, it’s a quick way to lose what might be a massive opportunity. Once you have your initial investment, you can leverage that into the valuation you want and grow into it.
When you look at your past investments, what do you think is most critical for founders to be able to deliver a successful exit?
Based on my experience, surrounding yourself with committed and talented people is critical. If you can figure out a way to get the right players on your team, the probability of success is just that much greater. Many founders don’t have the experience in properly vetting employees, so having a rigorous process to bring the right team members into the company versus plugging holes with bodies will change the trajectory of an organization.
Having a successful exit is dependent on consistency, thoughtfulness, and having the right partners. To me it’s mostly about making a lot of good decisions along the way rather than relying on a big single decision here and there. You have to have at least one advocate – whether that's an investor or an advisor who really is willing to go the extra mile because things will invariably get difficult at some point. When that happens, you don’t want to be alone, you want someone who's resourceful to coach you out of that situation – even if they're not writing the check to simply throw you a temporary life preserver.
