A single conversation can inspire an entrepreneur to create something great, or trick them into making a big mistake.
I'm not sure if my startup is worth $10 million. It's not like someone wrote me a check for $10 million in exchange for my company and gave it to me. But as of the story I'm about to share, I've already successfully raised his 7-figure seed round, the company is growing rapidly, and I've raised a Series A that values the business at his $10 million. We were preparing for procurement. .
Yes, I know that preparing to raise a round isn't the same as putting money in the bank, but all of our current investors were lining up for a piece of the next round of funding, so until the next trip. There were a few more weeks left. A series of in-person follow-up meetings were held on the West Coast with a handful of Silicon Valley VCs, all of whom expressed strong interest in filling the remainder of the round. In other words, even if you don't have cash in the bank, if you continue to grow as much as you've been doing, there's a pretty good chance you'll be able to get a term sheet that values your company at more than $10 million in the next few months. I felt it was expensive.
The key to raising money is simple: continue to grow by doing the same thing on the same trajectory. Unfortunately, I couldn't do that because I was a stupid entrepreneur who got distracted by a conversation with the wrong customer.
This fateful conversation began as a sales pitch to a senior manager at a well-known Fortune 1000 company. The sales pitch was about our core product, his SaaS platform that helps with employee onboarding and training. We've been building traction with midsize companies, but we knew that acquiring enterprise customers could really accelerate our growth.
The Fortune 1000 manager seemed interested, but threw me a curveball. When I finished my proposal, he said: “But have you thought about applying your technology to onboarding new franchise owners?” That's a bigger need for us. ”
I was caught off guard by the question, but intrigued. Our platform wasn't built for franchise owners, but we quickly learned…