RAY FARRELL ‒ NYA MEMBER SPOTLIGHT
Ray Farell joined New York Angels in 2018 and brings a wealth of knowledge as a strategic intellectual property counselor. Ray works with domestic and international entities of all sizes on the effective development and utilization of their patent and trademark portfolios, with an eye towards achieving optimal return on their budgeted resources. Ray is an active business mentor, and was principally involved in launching a consortium based, venture mentoring service of top institutions in the area, and introducing the group's innovative ecosystem leaders to MIT's Venture Mentoring Outreach Program.
How did you meet New York Angels?
I was generally aware of New York Angels from my previous activities working with startups through my professional background as a patent attorney, as a mentor/advisor in some incubators, and from my initial angel investing activities with another much smaller group. I met NYA member Carl Pergola through my next-door neighbor, who also happened to be Carl’s brother. Carl and I had extensive conversations and coordinated on a number of local projects. Carl then introduced me to New York Angels and helped me with the membership application.
Why did you choose to join New York Angels?
I was an investor prior to New York Angels with another angel group, but I wasn’t satisfied with their breadth and depth, so I was only a part of the group for a short period. After I became more informed about the NYA investment process, I attended a pitch session as a guest. I saw the clear benefits of NYA vs. other angel groups, and I knew I wanted to join New York Angels.
What has been your most memorable experience as a New York Angel?
The easy answer would be the very successful exit of one of the companies I invested in. BioRez exited within 3 years of my initial investment, which is still paying out due to the earnout payment potential that is part of the structured acquisition by Conmed.
However, my most memorable experience is actually sitting in one of the many pitch sessions and witnessing one of the greatest strengths of NYA unfold live in the collective – the spontaneous analysis of the various members contributing to the interaction with the presenting founder and then especially during the executive session after the pitch. While always being respectful of the founders and their presentations, the individual NYA members have the ability to very rapidly focus in on the strengths and weaknesses of the opportunity.
This confirmed for me that what I had hoped for in being part of NYA was real. As angel investors, we see hundreds of opportunities and as the statistics unfortunately bear out, the vast majority of startups do not ultimately succeed with a favorable liquidation event. That same experience occurs on a regular basis at New York Angels Screening sessions and Investment Forums. In some cases, I’ve seen interest in a particular company greatly increase or decrease based on that initial interaction. There is a very short amount of time for a company to make an impression one way or another and this collaborative interaction is so helpful to make a well-considered initial evaluation of a company and its founders.
What do you look for when you are investing in a company?
While it may sound cliché to use the common adage, “bet on the jockey, not the horse,” it really is about the founder and whether or not they can lead the business to a successful exit.
What do founders like most about working with you?
With my professional experience as a patent attorney, I provide founders with greater context than most other angel investors who often have entrepreneurial or corporate backgrounds. I truly enjoy mentoring, so I also commonly work with founders beyond those who I've financially invested in.
What differentiates companies that you see at Screening versus those who make it through to Due Diligence?
As companies progress from Screening to Discovery to Diligence, I have noticed that the process simply validates what was mostly represented during the initial pitch and that the initial impression of the founders is mostly verified. When NYA members dig into the details, the successful companies build collaboration or synergies with NYA, while the others implode as soon as their business issues are revealed.
What advice would you give founders who are starting to fundraise?
For me, I would like founders – especially new founders if they are not familiar with the fundraising process – to invest the time and develop a strong understanding of what the needs of the business will be according to the business plan/model. Then they should seek advice from experienced advisors perhaps in an incubator or accelerator program.
Also, founders should initially fundraise from whatever non-dilutive sources possible, e.g., grant money, and be their own “first investors” to demonstrate to their initial non-related angel investors that they are fully committed to the success of the venture. Founders need to show they already have achieved some notable milestones by demonstrating that there is a feasible and attractive market opportunity. This in turn shows they have created value and somewhat de-risked the investment.
They should also be integrally involved in the decision-making process and not default to expert advisors. It is critical that they demonstrate that they can manage a dynamic journey of a startup and receive advice, process the advice and be the ultimate decision maker thereby greatly improving their acuity along the way and enhancing the likelihood of a positive growth/scaling trajectory toward exit.
When you look at your past investments, what advice would you give founders to deliver a successful exit?
Founders should have the ability to recognize their strengths and weaknesses in the skills critical to marshal a startup from the pre-seed/early stage through the growth and various funding rounds. I also look at how founders manage that journey by recognizing what they need to deliver a successful exit.
