Coming up on her 1 year anniversary as Director of NVP Labs, Allison Williams, sat down with NVP Fellow, Vishal Banerjee to talk about how she evaluates startups, what she looks for in founders and how the Labs program has evolved since its start. Allison is currently leading the recruitment process for the Spring 2019 cohort, scheduled to begin in April.
Originally I had more of a traditional career. I graduated Penn and was an investment banker at Lehman Brothers. I worked for a public market fund of funds and then I moved over to the tech industry after that.
For the past seven years I’ve really been an entrepreneur. I started my first company in 2012 called Yarly, which was in the photo-cloud sharing space. We were really very similar to what iCloud is today. We sold in 2015 to a company called YesVideo, the market leader in photo services. After that I had two senior level positions in different startups.
I’ve been through three fundraising events and have worked with many VCs over the years. Moving over to the VC industry was really an opportunity for me to take my experience as a founder and a startup exec and use that to identify other talented people, embolden them and empower them with capital – which is a huge barrier to young companies. I know how difficult it is to start a company and how many knowledge gaps there are, because as a founder you can’t have done it all – but you are going to have to do it all!
I’m really proud of the program we’ve built here. We identify good founders and give them the tools to scale.
It’s a 12 weeks program with three main components.
First, the NVP program includes an expert team that works with each of our companies in a one-on-one, completely customized approach. Our experts range the entire lifecycle of the sales process. We have an in-house SDR team which our investments plug into to get their outbounding optimized and perfected. We then have Kevin Petry, our Director of Growth, who really focuses on the finesse needed to get a large enterprise sale over the finish line. In addition to this, we have experts in marketing and finance. This allows our founders to double/triple the size of their team without having to make a huge investment. So you start the program and see your business scale immediately. Our experts have done this many times over and know the right model to get you to success.
The second component is getting our founders in front of decision makers inside our corporate investors – everyone from Audible to Prudential to RWJ Barnabas Health. We host weekly events at our office, and make personal introductions to senior execs at our LPs. Four startups in our last class are runningpilots with our corporates, giving them a foot in the door, and a great story to tell prospective customers and other investors.
The third component is around fundraising. We have a 70% success rate of getting an institutional seed round closed at the end of the program. We have two marquee events where we get our founders in front of investors. We host an exclusive a 1:1 event that happens in Manhattan with tier 1 investors from New York metro area, the second is a traditional demo day here in Newark. We get top investors to both events.When I was a first-time founder I didn’t realize how important is was to have an existing investor advocate on your behalf, touting your praises to new investors. It’s a crucial part of fundraising, and we do a lot of it and we’ve seen the results, which are great.
We always look for founder-company fit. With the founding team you want to see a team with experience that aligns with the business they’re building. There are exceptions to that rule but most of the time a company that has relevant experience is going to have an extra edge over someone else trying to solve that same problem.
We always like to see repeat entrepreneurs – and it could be an entrepreneur who had a failure or a success – because you learn so much going through the process. It’s important to see teams that are well rounded. I don’t want to see three co-founders who are all business or all product people or even all technical people. Part of that is the equity problem: as they bring in additional investment everyone’s going to get diluted. Running a business is so much work you worry that some of that incentive is going to dilute away as they fill in gaps. So my advice to people creating founding teams is to find people different to them with different skills.
Then it’s about meeting the team, seeing the dynamic of the team, how well they work together. That’s a bit of a sixth sense, but is something we look for in the leadership structure.
One is Market Size. We’re going to want to make a 8-12X ROI so it has to be a large enough market. Then we have to agree with the vision of the market that the founder has. While we’re not experts in every market, we need to be able to feel confident that founders understand where the market is moving and agree with how they will participate in that shift.
Next is a general thoughtfulness about how they’re growing their business. Everyone wants to shoot from the hip, but we really value measured decision making. A lot of time we’ll dig into specific areas that are critical to their success – and we want to be wowed by their response. So if their differentiation is a unique business model we’ll want to dig into that, if it’s about having proprietary technology we’ll want to know about patents and trademarks. In a competitive space we’d want to know their go to market strategy. If it’s a product that churns we’ll want to know how they keep companies engaged. So it depends on the company and where the risk factors are.
It’s also good to see advisors and investors that have jumped on board – who are the people they’ve surrounded themselves with, help them get special access and get their phone calls answered.
We’re a unique program in that we are incredibly customized to our founders and we have an expert team that works specifically for the company. There is no set curriculum or set lesson plan that we deliver to founders, it’s really about getting our hands dirty – building out that operational, internal know-how so they can scale rapidly during program. I think if you talked to any of our founders they’d say that’s the best thing about NVP.
The other unique thing is our corporate LP community. Our corporate relationships are investors in our fund, so they are incentivized by the success of our fund. They invest in NVP because they want to support startups that are addressing pain points for their businesses – but also because they see potential in the City of Newark and want to see it thrive. Newark is going through a renaissance right now, $2BN of real estate is being built in the city, it’s only 18 minutes away from New York and the cost of living is so much better. The way to get to the next level is by transforming the city into a tech hub – and our corporate investors really want to see that happen. So they want our companies do well from a financial perspective but their also engaged in helping to grow the tech ecosystem here in Newark. You won’t find a program that has better motivated corporate investors than NVP.
If you’re thinking about it, just do it! You can apply on the website – we review every company in the same manner. Take a moment to apply, even if you’re not sure you’re the right fit – we’ll help you understand if you are.
Then be ready for that initial 30 minute screening call. We will be looking for the criteria I mentioned earlier, the areas of your business that are necessary to be successful. Be ready to dive into those. Whether or not we decide to move forward it’s always great forming those relationships.
We also host a ton of startup events at Newark – we want people to get to know us! Subscribe to our newsletter to learn about our events, then come here to one of our roundtables. We have a very inclusive atmosphere. It’s not just for our portfolio companies but its really a community for people in Newark and beyond and we want people to participate in that.
Newark Venture Partners is now accepting applications to the Spring 2019 Labs Program. You can apply here or by emailing firstname.lastname@example.org.