Welcome to the July edition of the New York Angels' Newsletter. This month, we bring you insights on investing in the Food and Beverage sector, as well as highlighting the importance of serving as a board director in a startup.
In our Member Spotlight, we talk to Michele Evans about how she leverages her HR experience to evaluate investments, and sit down with Scott Sadin of U.S.Integrity who has some great advice for founders.
We also look at our investment track record over the first half of 2023, just as TechCrunch says that valuations may be rising again (see later), and bring you a round up of news from our portfolio companies.
TOTAL YTD INVESTMENTS
NYA members invested a total of $3.3M in the first six months of 2023. While this number was down on the previous two years, it represents a return to the pre-pandemic levels of investment of 2019 and 2020, when a similar amount was invested.
2023 H1 INVESTMENT ANALYSIS
It's no secret that startup investments are down across the entire industry this year. So what companies were able to attract $3.3M in investments from our members?
For starters, one very common trait was lower valuations, with most in the $6-$10M range. Even SaaS businesses with over $1M ARR raised in this range. Another common aspect was the return to preferred equity, accounting for over half the dollars raised. While NYA members do invest in convertible notes and SAFEs, our members have a strong preference for equity. Lastly, every company our members invested in had either demonstrated significant traction or had proven deep domain expertise among the founding team.
Interestingly, industry vertical has not been a significant factor. Members have invested across SaaS, medical devices, consumer products, and various deeptech hardware startups.
One other noteworthy change is that our members have invested mostly into new companies, rather than follow-ons of existing portfolio companies. In most years over half of our members' investments are follow-ons - this year so far it's 30%.
It's anyone's guess when exactly the funding environment will improve. In the interim, New York Angels members will stick to our tried-and-true process to methodically diligence companies and invest in promising startups.
JUNE INVESTMENT HIGHLIGHTS
PINKTADA
Pinktada enables travelers to book a specific room, and swap or sell their reservation in an online marketplace if their plans change. Buoyed by an incoming investor pledging $500k, Pinktada is strategically pivoting towards a Software-as-a-Service (SaaS) model, particularly with its new FlexBook widget. Any interested external investors should engage with David Rose, (NYA Founder & Chairman Emeritus).
COMPANY SPOTLIGHT
Scott Sadin, Chief Operating Officer of U.S. Integrity, has experience in operational management stemming from financial services institutions such as Apollo Global Management, Tourbillon Capital and MSD Partners. While working in financial services, Scott helped develop trading surveillance programs aimed at identifying potentially suspicious equity and debt transactions. Scott was born and raised in New York City and received his B.A. in Political Science from Lehigh University. Scott shares how he closed with New York Angels the day before his wedding, the fundraising process with NYA, why founders need to spend more time one their pitch deck, and how developing and nurturing relationships helped drive U.S. Integrity’s success.
COMPANY NEWS SOCURE Socure, the identity verification platform, has just announced the acquisition of Berbix, a San Francisco based startup for $70 million in cash and stock. Learn what this could mean to the identity verification market. Read Article
COMPANY NEWS FUEGO Fuego, the sneaker company inspired by dancers, and made for dancers, won the "Best Dance Sneaker" category in the recent 2023 Women’s Health Sneaker Awards. Read Article
COMPANY NEWS U.S.INTEGRITY U.S. Integrity (a technology-driven sports wagering monitoring company) announced a partnership with The Big West, as they aim to protect the integrity of the conference and its membership as sports betting rapidly proliferates the United States. Read Announcement
COMPANY NEWS KASISTO
There was further proof that LLM (large language model) AI is becoming mainstream, with Kasisto, a digital platform for the financial services industry, announced the launch of KAI-GPT, the world’s first banking-specific generative AI application. Read Announcement
COMPANY NEWS ACTIVE PROTECTIVE Active Protective, the company that is bringing air-bag protection to human hips, rebranded its revolutionary product to Tango®Belt, and is now enrolled in FDA trials.
MEMBER SPOTLIGHT
Michele Evans joined New York Angels in 2022, and she has been one of the most active new members in NYA meetings. As the founder & CEO of NxtWaves, Michele focuses on helping accomplished professionals figure out their next phase of their life and work. Prior to NxtWaves, Michele was Meta (Facebook) Head of Human Resources for the Global Sales Group. She also spent 16 years at Microsoft in a variety of HR Leadership roles. Michele discusses how she joined New York Angels as a new angel investor, how she contributes her expertise in talent assessment to NYA, and tips for new angel investors.
MEMBER ENGAGEMENT SERVING AS A BOARD DIRECTOR
On June 23 the Member Engagement Team held a session on Serving as a Board Director in a start-up. Our sponsor, Founder Shield, hosted the session at their offices on East 25th St. Mark Schneider presented an abbreviated deck from the national ACA meeting on the "The Role of the Board and Board Directors". Vijay Aggarwal and Cindy Cook spoke about their experiences on Boards with Alyssa Tam moderating. Lastly, Wil Hamory from Founder Shield presented information about D&O insurance considerations and coverage.
HOW TO MAKE MONEY IN CPG
The Food and Beverage Sector (incl. Agriculture) accounts for nearly 5% of the US GDP, and successful exits can be spectacular. Yet it attracts less than 3% of Series B funding. Member Doug Pearsonexplains why, and what to look for when investing in early stage companies.
COMMUNITY CONNECTIONS FOUNDER SHIELD
Founder Shield is an insurance company that specializes in providing coverage for high-growth companies. One of their offerings is Directors & Officers (D&O) insurance, which protects individual board members from claims of mismanagement and helps safeguard their personal assets. D&O insurance is essential for attracting top talent, meeting investor requirements, and mitigating risks associated with fiduciary duties. Read More
COMMUNITY CONNECTIONS 2023 SUMMER CELEBRATION
Twice a year our members get together socially. This year we mingled with, founders, partners and sponsors at the Water Club on the East River. Stories were shared, new contacts made and a good time was had by all.
MARKET PERSPECTIVES TECH CRUNCH
The sharp downturn in valuations of early-stage companies, which has been universally welcomed by Angel Investors, since the end of 2022 may be running out of steam according to TechCrunch.
Finally, we would like to wish all of our members, founders, and readers a very happy summer. NYA will not have any formal screening or Investment Forum sessions in August, but we are still working hard, helping companies who are mid-raise. We will see you again in the Fall (please see the September application deadline below).
UPCOMING MEMBER MEETINGS
Investment Forum (Hybrid):
• July 17th (9:30 AM - 1:30 PM)
September Screening (Virtual):
• September 6th (9:00 AM - 1:00 PM)
FOUNDER DEADLINES
September 6th Screening Application:
• Due August 16th
*New York Angels, Inc. ("NYA") is a not-for-profit corporation that is funded by membership dues for individuals and/or entities that NYA has designated as members as well as from certain sponsors. Its purposes include providing administrative support to its members. NYA does not invest in companies. Investments, if made, are made by individual members of NYA.
