“It was a legit question. Almost no one was like, ‘Hey, Dave Tisch is a douchebag.’ In fact, most people said positive things! But there were a lot of people who were wondering privately, afraid to ask,” said one startup entrepreneur. “It’s a natural question, ‘Who is this guy? Where did he come from?’ The issue was totally unaddressed.”
“There’s a bro network for investors, they protect their own because it’s an incredibly small world and deals are sensitive,” said another New York founder who wanted to remain anonymous. “You break a tacit rule if you shit on one of your own in public because chances are, that person isn’t going to go away and you’ll have to deal with them again a couple months later.”
For his part, Mr. Cohen wasn’t worried. “A lot of David’s wisdom is very instinctual. He had invested in a bunch of companies so he has a lot of experience in watching startups evolve. He’s worked in big companies, he’s been around startups that have failed … One of the things I say about him is that he’s almost always right.” Besides, he added, “He seemed to be a really good networker; I’ve never met anybody that works harder. ”
“It was fantastic that the first program was as much of a success as it was, but it was also wasn’t jaw-droppingly surprising because you knew he hadn’t slept in four months, really,” said Union Square Ventures analyst Christina Cacioppo. “Then there was that thing last summer when the mentor list came out and it was majority male. There was that whole uproar and he went out and talked to everyone who got angry about that and took their suggestions.”
“I don’t think any of them gave me any credit until the end of our first program and then it was like, Hey, do it again,” Mr. Tisch acknowledged. “It’s crazy. Look, I agree. . . there’s not a second that I don’t think—a year and a half ago, I didn’t know any of these people that well.” It seems to be partly what inspired his single-minded devotion to TechStars.
One entrepreneur who met Mr. Tisch before TechStars official launch said, “He struck me as fratty and what I remember is he had an idea about our company that was off the map.” But through the course of running TechStars, which, in a manner of speaking, is Mr. Tisch’s most successful startup, he seems to have come into his own. “You could see when he does his first intro to the first class, he hasn’t had as much experience being on stage and just to see him grow into the role of being super comfortable, he’s absolutely positively matured,” said IA Ventures Roger Ehrenberg, who is both a TechStars New York mentor and investor in the accelerator.
The startups that come out of the TechStars incubator are, naturally, fiercely loyal to Mr. Tisch. “He knows this space fucking hands down cold, he knows startups ranging back 15 to 20 years,” said Reece Pacheco, founder of Shelby.tv, which graduated from TechStars’ first class–the one whose program was filmed by Bloomberg. “Yes he’s a harsh New Yorker who is going to tell your idea fucking sucks–the show showed some of that negative bullying. But he lives and dies for his startups.”
Indeed, they came to his defense even as they complained about the integrity of the reality show. But the idea for the show actually preceded Mr. Tisch’s involvement. Mr. Cohen said TechStars had been approached by several networks over the years. “Other cable channels that you might see other reality shows on,” he said with a laugh when we asked about the other networks. “They were, to me, not a good brand fit. We weren’t trying to be a TV show, we were trying to be investors and show what we did. I thought: Bloomberg, serious news channel, it’s gonna be a fair representation, that was the goal.”
FOR A MAN WHO WAS SHORT ON INVESTOR CONNECTIONS, post-TechStars, Mr. Tisch’s angel dance card now seems full. “I think if you just look over the past year or two there’s a group of people who have tried to establish themselves as independent angel investors with varying degrees of New York startup experience and I think Tisch is at the very top of that group. It’s not like it was handed to him, there’s a lot of work involved,” said Ms. Cacioppo.
“Tisch is on my short list,” said Chris Dixon. The angel investor was referring to the list of people he calls up to join him in startup funding rounds. “We write a hundred grand checks, it’s a very cooperative environment,”more so than VCs, he said, in terms of establishing the most helpful syndicate for a startup.
The open playing field is also a factor. “Because we don’t have a Google mafia, we don’t have a Facebook mafia. We don’t have people who have spent a few years at a place have that on their resume and have cash at large or at the same relative scale,” Ms. Cacioppo explained.
“There’s become a fraternity, or a whatever, a group of people that are leaders within this world that were sort of the early adopters to New York being a hot spot for this. And so in the last year you see Thrive and you see Lerer and you see TechStars and Founders Collective and you see First Round and you even see some of the West Coast guys putting stakes in the ground here like SV,” said Mr. Lerer, who as an undergrad at UPenn was in a rival frats, actual ones, with Mr. Tisch.
With angel funding, an investor’s track record is typically established within a five year time frame. Until that happens, New York’s new arrivals to seed stage funding are often judged on their network and their ability to make connections and help the startups raise additional capital.
When GroupMe was acquired by Skype, Mr. Tisch penned a blogpost titled “Invest in People,” talking about his first meeting with the co-founders. Betabeat mentioned that some local scenesters implied that Mr. Tisch followed other investors into the deal, but talked as though he hadn’t. During our entire conversation, it was the only time, Mr. Tisch seemed visibly upset. He even claimed to be amused by @fakedavetisch. “I DISCOVERED GROUPME. no big deal,” the mock account, which is run by two women and one man, tweeted last month.
“At the end of GroupMe? No. Ask Jared and Steve. I can’t imagine, I would go ask Jared and Steve, we were pretty early,” said Mr. Tisch. “If I was last, let me know, I’ll readjust my mind.” Later on, he added, “I’m not helping or being a good investor, they can give me my money back or I can bow out, I’m really not trying to be something I’m not.”
Co-founder Jared Hecht confirmed that Mr. Tisch was GroupMe’s first yes. “David Tisch was always very involved, got us a lot of great product feedback and has always been a massive supporter,” said Mr. Hecht. “Tisch represents the startups he’s passionate about more than almost anyone. He wears them on his sleeve like a badge of honor. Literally, he’s always walking around in a t-shirt of one of his portfolio companies.”
Those kinds of reviews from entrepreneurs also play into deal flow. And Mr. Tisch is getting more of them from his vantage point at TechStars where he’s been known to respond to applicants at all hours of the night. “Today, entrepreneurs seem to be more likely to be the ones putting their deals together and deciding how much each person/fund ‘gets,’ rather than a lead investor or VC firm,” said Ms. Capaccio. “So in the past, if you were an angel, you might have had to be ‘blessed’ by the VC firm to get a piece of the hot deals. Today, it’s the entrepreneurs who give the blessings.”
Skepticism around Mr. Tisch has morphed into something else entirely. “I have a lot of people who have expressed interest in giving me their money to manage,” Mr. Tisch said. “I find it a huge responsibility in investing someone else’s money. I try to invest with my gut and my heart and I think that trying to do that with someone else’s money is harder than doing it with your own.”
Although he said the next logical step for him would be to raise a small fund. “I haven’t taken steps to do that at this point. Diving deeper into something is a constant temptation, it is for anyone around this space… But I am really happy doing what I am doing.”