TechStars TV: Teams Learn Hard Truths about Money
"I feel like people have this illusion that when you're an entrepreneur it's sexy and you see all these shows and movies like 'The Social Network' that really paint this glamorous picture, but really what you are giving up is security," Jason Sosa, Immersive CEO, says over a montage of videos of his family in the park and his children during a visit to see him in New York City. "You have no money. There is a lot you leave behind to pursue and do something like this."
In a meeting with his team and the Davids (Cohen the TechStars CEO and Tisch the director of the NYC program), Sosa's body is tense as he hunches forward and clasps his hands. Immersive had been impressing mentors and investors left and right, but he had a secret he needed to air: he's been going through some serious financial troubles that include two foreclosures.
The tears well up in his dark eyes -- the black and white scene makes it all the more dramatic -- as he tells the stunned mentors that in a desperate measure to pay his mortgage, put gas in the car and feed his family, he embezzled $2K from Immersive.
Tisch and Cohen's eyes bulge at Sosa's audacity and stare him down.
Tisch can't stop fidgeting with a pen. Leaning forward, eyebrows raised, Tisch tells Sosa just can't do that.
Says Cohen, shaking his head, "I mean if I work at a bank and I need money I just can't take it. I mean this is bad."
Cohen tells the Immersive team they need to make a decision to split up now or work to forgive their CEO. The drama ends with the Immersive team reconciling as shown through a series of edited moments: working together on their demo day presentation, walking down a New York street at night.
Meanwhile, To Vie For's pivot from a gamed fashion discount app to "the LinkedIn for fashion" is giving the company's investors cold feet. They tell CEO Melanie Moore they want to "postpone" their committed investment until the new company gains more traction.
When Moore tells Tisch and Cohen, they seem stunned but not surprised. Sitting in a chair in his office, Tisch doesn't even look up when he hears the news.
Demo day is now even more important to To Vie For, which now only has enough money to float the company until then.
"There are real issues there that investors are going to spot and and question," Cohen shrugs and tells the camera in a sober tone with disappointment in his eyes. "It's either bad management, bad luck or something, right? If there are two companies you are just as excited about both, then maybe you go the other way."
For the other teams, it's time to prepare for a barrage of criticism from VC Mark Suster of GRP Partners at a demo day practice session.
"It's a one out of 10...It really is bad...You tell a mildly confusing story..." Suster's comments are edited together with shots of shattered-looking entrepreneurs.
As Shelby.tv CEO Reece Pacheco stands in front of the room full of mentors and other companies Suster calls out from the audience, "How long have you worked in video?"
Pacheco bows his head, closes his eyes and answers, "Three years."
"Then f$^&ing say it!" Suster demands.
Later, Suster tells Tisch and Cohen that he thinks Shelby.tv, which dropped its original concept of a video platform for sports to become a video-curation platform, is a group investors would generally be interested in -- but there's a but.
"I live in L.A., I see these every f*$%^ing month," Suster says holding up a placard with the company's name. He adds that Homefield came in to TechStars with a great idea and moved backwards when it became Shelby.tv.
Cohen and Tisch are more bullish on Shelby.tv's prospects but nod in agreement to Suster's point.
"They win the lottery, they're gonna build a Twitter," Tisch says emphatically. "The don't hit the lottery they're gonna build a … whatever the non-Twitter is."
Getting some love this episode is Veri, the social learning game. CEO Lee Hoffman tells the camera the team has put everything else on the back burner to work on their demo day pitch.
Yet even before demo day, an angel investor has offered the company $100K.
"The attention from other people to that company has just escalated immensley," Tisch says in a private interview over clips of the Veri team working. "People are spending 30 minutes per visit on their product."
Even Suster is impressed. Tisch admits that Veri was the last company they let in to the TechStars program, and only because the founders had 30 recommendations.
Meanwhile OnSwipe, the team that hasn't needed anyone's help, actually approaches Tisch and asks for advice on hiring. For this stunning development, Tisch awards OnSwipe the "team of the week award" and sets them with Aol CEO Tim Armstrong.
OnSwipe CEO Jason Baptiste actually looks nervous when Armstrong looks directly at him and asks, "What do you guys want from me?"
Baptiste, with his freshly cut hair and pink shirt, laughs and tells Armstrong all he wants is one of Aol's properties to use OnSwipe's digital magazine tablet solution.
Armstrong doesn't react with much enthusiasm, but he agrees to have his people evaluate whether AOL should do something with OnSwipe's platform. He tells Baptiste he wants them to tell him what they think the best property for OnSwipe is and what type of advertisers would work best for that product on a tablet.
"The trick is turning this from something that is new and cool to something that's scaled," Armstrong says.
Preview of next week's episode: right before demo day, two teams (neither of which has been on the show thus far) blow the mentors away with their pitches and highlight the flaws in the pitches from the other six companies.
CONTACTS
David Tisch
Twitter: @DaveTisch
LinkedIn: http://www.linkedin.com/in/davetisch
Google+: https://plus.google.com/108954387453322809050
David Cohen
Twitter: @DavidCohen
LinkedIn: http://www.linkedin.com/in/davidgcohen
Jason Sosa, CEO Immersive
Twitter: @jason_sosa
LinkedIn: http://www.linkedin.com/in/jasonsosa
Google+: https://plus.google.com/100013397614823268203
Mark Suster, GRP Partner
Twitter: @MSuster
LinkedIn: http://www.linkedin.com/in/marksuster
Reece Pacheco, CEO Shelby.tv
Twitter: @ReecePacheco
Linkedin: http://www.linkedin.com/in/reecepacheco
Lee Hoffman, CEO Veri
Twitter: @leemhoffman
LinkedIn: http://www.linkedin.com/pub/lee-hoffman/4/883/7a9
Google+: https://plus.google.com/111013534281838413845
Jason Baptiste, CEO OnSwipe
Twitter: @JasonLBaptiste
LinkedIn: http://www.linkedin.com/in/jasonlbaptiste
Melanie Moore, CEO To Vie For
LinkedIn: http://www.linkedin.com/in/melaniemmoore