VC Minute – quick advice to help startup founders fundraise better
Click below to listen. 2m 18s duration.
Subscribe to your podcast platform of choice.
The first funder was actually from my bank account. In order to facilitate the split, we had a somewhat viable business and there was some value there and we could sell it off for some pieces, but, I had to empty out my 401k, my wife’s 401k, borrow money from my in laws and my parents to capitalize the company and to buy my partners out. That was a pretty big decision.
Might sound like it didn’t take a lot of time to decide. It was one evening of walking. There’s a bunch of lakes here in Minneapolis. I walked around a couple of lakes about eight times and eventually just decided, I think this opportunity is really big. I think this team is really valuable. I think that what we’ve already built and the relationships we had are things that I don’t want to throw away and I don’t want to undervalue. So, it’s going to be worth it to do this and I’ll regret not doing it.
But it was a pretty big decision. It was months of thinking about it that culminated into making a decision in one day. But that was a lot of money. I was essentially more than broke. I was in more debt than I’ve ever been in in my life from a personal perspective. I owed family members. It wasn’t a huge amount of money. It wasn’t in the millions of dollars that I borrowed, but it was in the millions of dollars that my net worth went down essentially.
The company reduced in size, we sold off some of our customers, we repositioned some of our employees. But what happened was, November of 2019, we just started to move incredibly quickly. I got everybody on a Zoom, I said, this is what’s happening, I’m recapitalizing the company, here’s what we’re going to do, we’re going to build this product.
And I thought everyone was going to leave, of the people that we had left. And actually, almost everybody from that era is actually still with the company today. And we just moved so much faster. We just built and built and built and built. We should have probably refactored some bad decisions that we’d made, but the pull request on the new code base was the last week of November 2019.
Clearly didn’t know that COVID was about to happen, but that’s what happened. We were a fully remote team, working really quickly, throughout COVID. We got a PPP loan that helped us really cash flow until we raised a round. But we went from basically no product customers to 13 signed contracts, by August of 2020.
About FulcrumFulcrum applies modern technology to manufacturing processes, helping makers focus on their craft and grow their businesses. The innovation of American manufacturers is critical to a better world, and Fulcrum aims to revitalize the industry with automation software.
About AVL Growth Partners
AVL Growth Partners, founded in 2009, is the leading fractional Finance and Accounting firm supporting organizations in pivoting from growth to scale. AVL brings an experienced team of CFOs, Controllers, and Accountants to your organization, delivering transparent, strategic actions for short and long-term success. Transform your financial approach affordably with AVL, supporting companies coast to coast – get to know AVL Growth Partners at avlgrowth.com. (Sponsored)
Visit the VC Minute homepage for more episodes and more ways to subscribe.
