NYA Member Spotlight - Tonny Ho

This month, we shine our spotlight on Tonny Ho, a member of New York Angels for 8 years, and a current NYA Board Member. Tonny started his career as a business reorganization and restructuring attorney where he was able to experience first hand, why some companies fail and others are able to successfully maneuver themselves out of a tough spot. Tonny also has experience investing in real estate and non-public companies. Since his retirement from practicing law, he has been spending more time on early-stage investing. Below, he answers questions regarding his experience as an Angel investor and how a chance meeting on a subway platform led him to join a professional Angel group.

What first attracted you to join a formal network for Angel Investors?

I had been investing in early stage companies for a number of years before joining the NYA. As time went on, I realized that I needed a better way to source deals. Back in 2013, by serendipity, I met an NYA member on a subway platform while waiting for a train following an event mentoring public school students in the Bronx. He told me about the NYA which piqued my interest. After attending a couple of the NYA meetings as a guest, I knew that I wanted to be a part of it.

What did you do before you were an investor and how has that experience shaped your own investment thesis?

I spent my career in the financial restructuring and reorganization of companies in distress as a lawyer. This included many cases relating to extraordinarily successful large companies in numerous industries that fell into hard times during periods of rapid changes in the business environment. Some were able to successfully reorganize and restructure, others could not and were liquidated. This experience shaped my views of why some companies succeed and others do not. Throughout this period, I have also had a strong interest in the investment space. Initially, I focused on the different type of investments in the public markets. I quickly realized the need for greater diversity in asset allocation, so I moved into the real estate space by buying, selling and managing properties. Starting in the late 1990’s, I began looking at and investing in early stage companies to increase diversity in my investment assets. Despite the occurrence of the dot-com crash, I continued to invest in this space because I found this to be an important and rewarding asset class to be in, even if it is one that can be very risky and requires a lot more patience to realize returns on than any of the other asset classes that I invest in.

What can founders expect from the Angel investor/founder relationship?

The relationship between a founder and an Angel investor is an ever-evolving process. Some Angel investors will invest their money, follow its progress and wait for an exit. Others may want to be more proactive and develop a continuing and sometimes a very close relationship with the founder. This can come in various forms such as being on the company’s board, providing informal advice to the founder or just staying in informal contact with the founder. However, over time, if the company continues to grow and begins to raise money from venture capital firms, the relationship between the Angel investor and the founder often becomes less and less significant.

What do you look for in a pitch? In a founder?

Given the time allotment for the initial pitch, it must be structured and timed to hit all of the key points that the founder needs to get across to the investors. It must be presented in a way that gets the investors interested in wanting to learn more about the company. If the founder exceeds the time limit and leaves no time for questions, then either they have not done a good enough job preparing for the pitch or they are not very interested in hearing from the audience. In that event, I think it reduces their chance for getting to the next stage of the funding process.

What advice would you give a founder who is about to apply for funding at NYA?

When I advise a founder about applying for funding at the NYA, I first want to understand their company enough to see if it is ripe for seeking funding from the NYA. If I think the company is ready, then I would explain exactly how the process works, from initial application to ultimately getting the funding. In some instances, I may give advice on pitch preparation and feedback on their deck. I try to be transparent on how difficult the process could be, but if successful, they will get the funding they need. Also, and perhaps just as important, the expertise and contacts of the members of the NYA is a resource that they may be able look to. I believe that transparency about the process for founders to know is very important in order to manage their expectations and help them understand what they need to do at each stage of the funding process in order to succeed in getting funding.

Have you noticed any investment trends happening now that the economy is opening back up?

I think that the competition for investments at the seed stage has and will continue to increase because more capital continues to move into this space.

Have you ever led a deal? If so, can you speak about your experience? What can a founder do to help facilitate a final investment decision?

I have been a lead/co-lead on many deals at the NYA. It can be very time consuming and intense especially if the NYA is the deal lead; however, it can also be very rewarding in a number of ways. You get the opportunity to be in regular contact with the founders which may lead to a better understanding of who they are and what they are capable of. Before the pandemic, there was the opportunity to visit them at their offices, meet some of the team members and get impromptu demonstrations. Because everyone in the NYA makes their own decisions on an investment based on personal preferences, criteria, etc., there is no simple answer to a final investment decision. Nevertheless, it would always help if a founder is as forthcoming as possible in responding to each and every question that is posed to them by a prospective investor.