The Angel Investor Behind So Many MBA Startups

 

David Tisch made his first big investment at the age of 16 when he plowed his bar mitzvah money into eBay’s initial public offering. For a teenager, he made a killing—15 times his initial investment.

But it wasn’t until 2007 when he started his journey toward becoming one of the world’s most prominent angel investors. At the age of 26, having just graduated from New York University’s law school in 2006, he spotted a highly compelling company called Boxee. The firm, which would later be acquired by Samsung for a reported $30 million, made an innovative software platform for home theaters that allowed users to view, rate and recommend content to friends.

Along the way, he’s been an executive vice president at kgb, where he founded and managed Knowmore and later TechStars USA, a seed stage investment program in New York. More recently, he launched an e-commerce mobile shopping app called Spring.

Today, the 34-year-old serial entrepreneur and angel is at the center of early stage investing. As managing partner of BoxGroup in New York, Tisch is one of the biggest investors in MBA startups, putting seed money behind 20 of the top 100 MBA startups since 2009. There’s Warby Parker, Blue Apron and PillPack along with his personal money in ID.me, Vengo Labs and CustomMade.

So who is David Tisch, whose paternal grandfather is well-known entrepreneur Laurence Tisch? And how does he decide on what startups to fund at such an early stage? What does he look for in a young founding team? And what does he find most important: the idea, the product strategy, or the quality of a startup team?

‘THERE’S NO SCIENCE TO WHAT WE DO. IT’S ALL ART IN SOME FORM’

Over the phone, Tisch comes off as quiet, reserved, confident and rushed–standard for someone who sees thousands of pitches every year in one form or another. All told, Tisch plays a role in about 40 to 50 startups that get funded every year. “Our average is anywhere between 40 and 50 startups a year,” Tisch says. “We think we see about 100 startups for every investment we make. Some of those are passive looks and some are active looks.”

For Tisch, a passive look is an email pitch he receives. To qualify it as an active look, there has to be some for of communication of Tisch reaching out to the startup. “We are just looking in general,” Tisch says. “There’s no science to what we do. It’s all art in some form. A lot of it is instinctual.”

Tisch does say there is a certain framework he looks for when deciding on whether to invest or not. “It is the team, idea and product and how those three aspects fit together,” Tisch explains. “Why does this specific team have the best chance for success with this idea or product?”

IT TAKES A SPECIFIC PERSON IN A SPECIFIC MARKET

As an example, Tisch dug into his portfolio and pulled out recently funded, ClassPass. The startup is a network of gyms in classes in different cities and a purchase of a pass gives access to all participating gyms and classes at the gyms.

“The founder, Payal (Kadakia) was a professional dancer and has started her own dance company and gym,” says Tisch. “She knows both what it’s like to use a gym and run a gym. It’s the right person who’s in the right market and is offering something unique. She also had a really good business model, great brand execution and a team that can build the product and strategy.”

That combination is the perfect storm of entrepreneurial success, according to Tisch.

“As an investor the most important thing is getting to know the founder and the passion they have and how they expect to build a company and culture,” Tisch says. “It’s a people first approach.”

FRIENDSHIP VERSUS REMOVED AND STRATEGIC

What exactly does “getting to know the founder” mean? According to Tisch, it means trying to build the beginning of a relationship and then how that relationship develops. “Getting to know someone could happen in a 15-minute phone conversation or it could take six years of knowing that person,” Tisch says. “The more people you meet, the easier it is to tell if this relationship is going to be a friendship or more removed and strategic.”

With the amount of people Tisch meets on a regular basis, he’s probably pretty good at deciphering between the type of relationship that will lead to friendship and the type that will stay “removed and strategic.”

Tisch recently took over as the director of the Cornell’s Startup Studio and is a visiting professor for Cornell Tech, a portion of Cornell’s campus that is located in New York City and offers various graduate programs including the Johnson Cornell Tech MBA.