NYA FOUNDER SPOTLIGHT - NICK CUOMO, ALLSTAR CO-FOUNDER & CEO
As a former professional gamer, Nick Cuomo, CEO and Co-Founder of Allstar, turned his love for video content into a viable business that is currently raising their Series A. Allstar is a gaming content creation platform that turns game data seamlessly into video content. Its proprietary technology offers fun, powerful creator tools that produce video content for gamers effectively out of thin air, giving them a no touch content creation experience. Today, Allstar has over 1.1 million monthly active users, and its users are creating over 2.4 million highlights. 100% of their growth right now is organic. Nick shares how NYA invested in Allstar’s Seed round despite other fundraising challenges, why early-stage investors should focus on the company’s team, and the key factors to Allstar’s success-to-date.
How did you first meet New York Angels?
When Allstar had relaunched several years ago, we basically only had a team and a product, and we were beginning to meet with people in the industry. I was introduced to a NYA Member, Ian Seltzer, through my network in esports. We had a really great chat with Ian, and he suggested that we apply to NYA. A little under a year later, we applied for our Seed round in December 2000, and by April 2021, NYA members had invested. I was surprised by the fairly quick turnaround.
What were you looking for in investors when you were fundraising? Why did you choose to work with New York Angels?
1) Good partners: People have compared investors to a form of marriage. Founders are spending a lot of time with investors, and there is so much that goes into the relationship. We wanted to find good partners that were coming from the right place. We definitely found that in NYA and our lead investors: Cindy Cook, Michael Costa, and Endri Tolka.
2) Expertise in the domain: There are many different facets to our business, and the collective of NYA brought those industry expertise areas (gaming, media, entertainment, consumer tech) together in an exciting way. That is something not many angel groups or investors or even VCs can do. An organization is basically the sum of its members, and the breadth and depth of NYA members is incomparable.
3) Understanding our business: NYA’s Due Diligence process was quite rigorous, and we had an extensive amount of information to share. NYA investors challenged us in the process, but they also really took the time to understand our business. We felt like they truly understood what we were building.
What was the process like for you when you were fundraising?
Our Seed round was honestly pretty tough. Most of fundraising is an uphill battle filled with a lot of rejection. Since we were fundraising during COVID, it was a very unpredictable time, and the process was almost entirely over Zoom. There were a lot of late nights and a lot of long hours. For the NYA pitch, we only had 10 minutes – you had 5-8 minutes to talk about your business, and the rest were reserved for questions. Our existing pitch was 25 minutes long, so I spent many consecutive all-nighters perfecting our pitch. It reminded me of the Mark Twain quote, “I apologize for the length of this letter. If I had had more time, it would have been shorter.”
After we found NYA as a lead investor, the rest was a bit of a downhill slope – in a good way. At a certain point, we oversubscribed. I felt like an auctioneer. I had people texting, calling, emailing, and reaching out on LinkedIn – people who I had never heard of – asking to participate in our round, which admittedly was exciting but certainly a very busy time. We had to turn investors away, which was an unexpected sort of turn of events. Investors also were getting frustrated with us because we weren't letting them invest as much as they wanted. Overall, I think the fundraising process was fun. But, the day after we closed our funding, it's back to work, and we needed to show how we were putting that that capital to good use.
What have you enjoyed most about working with New York Angels?
I've really enjoyed that our NYA partners are as hands on as you want but not necessarily more hands on than you need. I think they really let us run our business the way that we see fit, while they are also there to help us steer and course correct. Furthermore, they have helped us accelerate by exposing us to their networks and their skill sets.
Cindy Cook is our Board Member from New York Angels, and she's a really good partner to the business. She stops by the office almost every other week to spend time with the team. She has helped us through multiple challenges. Cindy drops off things like strawberries and cookies, and these little gestures help keep the team motivated and close to NYA.
How would you describe NYA to other founders?
There is a reason why they are called “angels”, and New York Angels investors were 100% angels for us. In our early days, we had a lot of people turn us away. There were a lot of people who looked at us and said: “I don't really get it,” or “We’re going to move on with other investments,” or “You’re too early in your company for us to invest.” NYA had its initial concerns, but they paused and dug in. The deeper NYA dug, the more interesting our product became. NYA really helped us create an amazing funding round, and I think we've shown to them that we have been able to deliver. Now, we're ready to kind of scale things up again. Thank you, NYA.
What advice would you give other founders who are looking to fundraise?
1) If you are not always fundraising, then you should give yourself at least three months before you want to start fundraising to prepare.
It takes a lot of time to collect data and to build a CRM of investors. You also want to get your pitch right, but you realize it’s never actually done – it can always be better. Organizing your data and preparing Due Diligence materials are also time intensive. Overall, it is a big shift in mindset to move from the daily execution of running your business to strategic fundraising mode. You will want to go hard and fast all at once, and ideally stack your meetings back-to-back.
2) Be cautious and wary about services, scouts and accelerators that require you to pay them upfront.
Serious investors are not going to request upfront payment. You are presenting to potential partners an opportunity to invest in your business. That is not something you should pay for; that is ultimately something they should pay to be able to do.
3) Find good advisors. You cannot fundraise on your own. A good network will help you exponentially. Our network has been a critical factor in Allstar’s success.
What advice would you give other early-stage investors who are looking to invest in companies?
My advice is only as valuable as our exit is big in the future, so take my advice with a grain of salt. If I were an early-stage investor, the top four qualities that I would look for are the team, their expertise in the industry, their understanding of the market that they’re in, and their track record of execution.
I would focus first and foremost on the team. The reality is the business might change, the market might change, the strategy might change, the results might change, the growth might change – everything that you're investing in might change. But if you pick the right team, the team probably won't change. If you choose teams wisely that is the biggest thing that can de-risk the future of the start-up.
Then if you have a great team and they have domain expertise that is relevant to the market they are in, I wouldn't spend so much time questioning market opportunity as much as understanding how that team plans to capture the market. Most of the time, the best startups are not focused on very known opportunities or well-researched markets. If they were, then there would be a lot of competition or a large incumbent. As an investor, if you want an overlooked market with an amazing opportunity that no one is thinking about, it may only be known to that team and a small group of experts from that industry. I believe understanding the team’s perspective on the market, then doing your own homework from there is most useful.
What has driven Allstar's success?
Our team is a world-class team, and we are super passionate about what we do. Our passion gives us a lot of energy to push through the tough times of building a startup. Also, we all are gamers, so we know what gamers want. As gamers, we actually want to use our product, and that drives our instinctual decision making. You can't make every decision with data. As a founder, you need to have some conviction and know the ephemeral quality of the business.
In addition to our team, I think we have a really great product. We have been able to build a passionate community around that product, and our community of gamers has helped us make it better. I also think it is the right time for what we are doing. As more and more people play games, more and more people want to be creators. We are filling a void in a growing market and that is what drives rapid, consumer tech scalable growth.
What is next for Allstar?
We are currently fundraising our Series A. We are talking with many exciting investors in this next stage. We would not be here without NYA. They have been great partners with us from the start, and they continue to be great partners. I couldn't recommend them enough. If anyone wants an intro to NYA, let me know. If anyone wants to make an intro for us to Series A lead investors, give me a shout.
