Seed Capital From Angel Investors: Brian Cohen, Vice Chairman, New York Angels (Part 1)

By guest authors Irina Patterson and Candice Arnold

This is the forty-seventh interview in our series on financing for entrepreneurs. I am talking to Brian Cohen, vice chairman of New York Angels. The group offers early stage capital in the range of $250,000 to $750,000. Since 1997, the group and members of their predecessor group have invested over $28 million in more than 65 companies.

Irina: Hi, Brian. Why don’t you start with your background and how you arrived at this point?

Brian: I guess, to some extent, if I wax a bit poetic here, I grew up in Brooklyn, and there’s an attitude, perhaps to some degree, about people who grow up in Brooklyn and New York City of being a bit more aggressive, being more opportunistic. When you grow up in Brooklyn, there’s a sense of wanting to get out of Brooklyn. The old history of Brooklyn is made up of a lot of very interesting people who like to create things. Perhaps there’s a bit of that Brooklyn DNA in me. >>>

Capitalism 2.0: Distributed, Democratic Capitalism

Even though I have been thinking about it for a while, I have taken my time to write this final piece on the Capitalism 2.0 series. Well, it is my conclusion that capitalism 2.0 needs to be rooted in value creation, somewhat distanced from the reaches of the speculators who have basically hijacked the 1.0 system, and it needs to be democratic, distributed, and its fruits far reaching. >>>

Capitalism 2.0: Welfare

While I do not believe in a welfare state, I do think the welfare has a role to play in Capitalism 2.0. I have always felt that welfare should be the absolute last resort, and still stand by that point of view. Nonetheless, that last resort is a necessary piece of a sustainable system. >>>

Capitalism 2.0: Spending

NY Times reports, “In a series of comments in recent weeks, Mr. Obama has begun to sketch a vision of where he would like to drive the economy once this crisis is past. His goals include diminishing the consumerism that has long been the main source of growth in the United States, and encouraging more savings and investment. He would redistribute wealth toward the middle class and make the rest of the world less dependent on the American market for its prosperity. And he would seek a consensus recognizing that an activist government is an acceptable and necessary partner for a stable, market-based economy.” >>>

Capitalism 2.0: Credit

As I have been dialoging with friends and colleagues on Capitalism 2.0, Sridhar Vembu, CEO of Zoho, wrote in response to Capitalism 2.0: Value Creation vs. Value Destruction : “I have a somewhat different take; I believe easy credit from Federal Reserve + leveraged speculation (i.e speculating with borrowed money) create a toxic combination that destroys real economic value. Short selling itself is only an intermediate symptom. >>>

Capitalism 2.0: Excess, Hedonism, Value

We have discussed the role of the creator versus the role of the speculator. Let’s also discuss what are the outcomes of compensating creators over speculators. I would submit, speculators tend to have a less than compelling vision about what to do with wealth, whereas creators often have equally creative ideas about how to continue to create more value. While speculators gravitate toward excess and hedonism, creators gravitate toward further creativity. >>>

Capitalism 2.0: Justice

One of the flaws in Capitalism 1.0 is that fairness has often been compromised, justice has often not even been considered. In 2.0, we have to pay attention to justice much more minutely! >>>

Capitalism 2.0: Value Creation vs. Value Destruction

In the Creator vs. Speculator debate, there is also the need to deal with the issue of when speculation becomes a way of value destruction as opposed to value creation.

One of the problems that we have with Wall Street compensation is that traders make money both as the market goes up and as the market goes down. And often, a tremendous amount of market manipulation is going on in the process, destroying many people’s honest, hard work. >>>