💰 Issue #87: The Challenges of Fundraising
Glowforge CEO Dan Shapiro shares his experiences as a serial startup founder, his struggles of raising capital for the first time, and how he raised the world’s largest crowdfunding campaign.
💬 Welcome to issue #87 of Between the Lines
Good morning & happy Thursday. Starting your own company is never an easy feat to accomplish. Early-stage startups face a myriad of challenges every day, and fundraising is just one of them.
This week, Claremont grad and serial entrepreneur Dan Shapiro (HMC) talks about the struggles of early-stage founders, his experience raising funds for the first time, and how he led Glowforge to raise a total of $70M in capital…it’s a Claremont world out there. 👇
~ Josh, Miles, & Pat
📢 👥 Community Voices: How I Raised It w/ Dan Shapiro of Glowforge
Authors: Dan Shapiro & Nathan Beckord
Claremont graduate Dan Shapiro (HMC ‘97) is a tech entrepreneur and the co-founder & CEO of Glowforge. Prior to that, he helped start and run Ontela as the CEO before it merged with Photobucket. He then became the CEO of Google Comparison - a Google subsidiary providing comparison shopping for personal finance products. While at Google, Dan decided to launch the bestselling board game in Kickstarter history during his free time with his kids - Robot Turtles.
Dan eventually left Google in 2014 and co-founded Glowforge with the world’s largest crowdfunding campaign, raising over $27M in pre-orders in 30 days. Glowforge has since grown to become one of the most popular creative technologies in homes, classrooms, and businesses across the globe. It’s a beautiful 3D laser printer that sits on your desk and uses a laser to carve and engrave products from raw materials like wood, leather, acrylic – even cardboard and chocolate.
Dan sat down with Foundersuite to talk about his experience as a multi-startup founder, why it’s a mistake to ask for intros, when to play the “CEO card” with your employees, and his tips for entrepreneurs who are trying to build better investor relationships.
So, you were showing Glowforge to your friends from Seattle and people were grooving on it. Let's start a little bit more towards the beginning of that story. How did you get it off the ground and fundraise for it in early days?
We started with an angel round, brought in some great investors, and added to the investor database over time. But let me tell you something when I was doing my first company. I asked for advice and a number of people were like “Well, first thing you do is call your network, then you go call all the VCs that you know” and I’m like “What? No! That’s not helpful at all.”
I pitched my first company for nine (9) months to anything that would move with $0 raised, and I found it so frustrating when people who had success were coming in and saying “Yeah, once you’re successful at fundraising, it’s easy to be successful again.” How utterly useless. So I’m not going to do any good by saying we pitched 26 angels and 24 of them wrote checks. That was because I had experience. I have the network to do it.
The hard one is your first company. The hard one is the first time you go out and raise.
Let’s forget Glowforge for a while and let me tell you what happened in Ontela. After nine (9) months of nothing, I managed to convince one person who had a tremendous reputation in Seattle to get involved with the company. A lot of angel investors and VC firms knew this person. That was when things started to fall into place. But I pitched until I was blue in the face with nothing. Then when it came time for Series B, I will never forget. It was on January 3rd. I had the investor signed up and we started papering things a month later. I talked to a corporate attorney and he said, “Dan, you’re magical. How did you get the round done in a month?”
I said “Well, I’ve got frequent flyer status on Alaska. I did 68 pitches, and it was the 68th pitch that wrote the check.”
He said “Oh, you just did three to six months of fundraising all in one month.” But 68 pitches and 67 No’s, I was pretty much at the end of my list. There were only a dozen people I could call on and I did, but they all said no, too. So, it’s definitely a brutal numbers game. I think some of the worst advice that people get, and I realize this is controversial. I think some of the worst advice early stage founders hear is to focus on their fundraising, find a small set of firms that’s a perfect fit. I think that’s good advice when you have a reputation or when you have experience. I think that advice is often given by people with a reputation and experience.
But it’s so hard to raise, it turns into a numbers game. Because that perfect investor, they’ve just invested in another company in your space. They just finished investing out of their first fund and they're raising a new fund. They just had some questionable sushi that's not sitting right with them, and they weren't really listening to your pitch. There is always a reason why people say no. I don’t know any advice for first time entrepreneurs other than to play it as a numbers game. Yes, find the best VCs, create the right pitch, dial it in, and pitch 50 more people.
💼 Who’s Hiring?: Yoodli & DRINKS
Yoodli is a personalized and AI-powered speech coach that helps people around the world improve communication skills without the pressure of an audience. They use AI-powered technology to give real-time and personalized feedback on filler words, eye contact, pacing, and more. Yoodli was co-founded by Pacific Northwest's Entrepreneur of the Year, Forbes 30 Under 30 Entrepreneur, and Claremont grad Varun Puri (CMC '16). The company raised a $6M seed round co-led by Madrona Venture Group and Cercano Management last year, and they’re hiring for several open roles:
DRINKS, co-founded by Claremont grad and CEO Zac Brandenberg (CMC '99), connects retailers, brands, and marketplaces to the $250B alcohol market. The company optimizes alcohol e-commerce with its patented DRINKS IQ technology, which empowers retailers to leverage AI-based predictive merchandising and marketing to personalize customer experiences. They’ve been recognized several times by Built In and Forbes as a top startup employer, and they’re looking for an HR Coordinator to join their team:
Check out the other ~5,000 open jobs at 400+ Claremont-affiliated companies here on our Storyboard. Plus, create a profile and enter your preferences to get alerted to new job postings relevant to you, be they the 1,000+ remote jobs, 100+ internships, or 40+ part-time positions available. We’ve published research that shows that Claremont-founded companies that disproportionately hire Claremont talent outperform — so pay attention, Claremonsters!
If any of these roles catch your eye 👀 , apply and mention Between the Lines. Or, if you are an employer looking to hire tip-top Claremont talent, fill out this form to have your jobs featured.
🗣️ Conversations on the Interwebz:
This week’s must-watch 📺
Claremont graduate Meredith Sandland (CMC ‘98) is the CEO of Empower Delivery – a B2B SaaS company that enables restaurants to profitably and sustainably serve the growing consumer demand for delivered meals. She chats with Joseph Szala on the Forktales podcast about the restaurant tech revolution, eliminating complexity in restaurant operations, and how “Delivering the Digital Restaurant” is actually a whole lot easier than most people think.
This week’s top listens 🎧
Claremont grad and Coinbase Senior Director of Engineering Jesse Pollak (PO) was on The Defiant podcast to give a deep dive into the launch of Base, their recently-launched Layer 2 blockchain. Base offers a secure and low-cost way for anyone to build decentralized applications, and Jesse is contributor #001. In this episode, he discusses how Coinbase plans to onboard millions of dapps and a billion users to this new platform.
With the recent announcement of Co-Counsel, Casetext’s AI product for lawyers, Claremont grad and co-founder Jake Heller (PI '07) joined On LawNext for an interview about the legaltech company’s new product, OpenAI’s GPT-4, and how Co-Counsel was able to pass both the multiple-choice and written portions of the Uniform Bar Exam with flying colors.
Can’t get enough of Between the Lines? Follow and connect with us on Twitter!
🍽️ BTL Snacks:
💲More Fin Less Tech….. Claremont entrepreneur Daniel Shi (CMC ‘07) shares his insights on the changing landscape of the financial industry and the need for traditional institutions to embrace digital transformation in order to survive and thrive in the future. Daniel was an operator at Remitly, an international payments company, from early stage until IPO. Now, he’s an angel investor and advisor for numerous startups and funds out of his private investment company — South Quad.
🤝 Enabling True Digital Ownership….. Digital products are everywhere nowadays, but how do we give real-world value to these items if they’re so easy to copy and paste? Claremont grad Ben Chang (PO ‘99) writes an article about the concept of ownership in the digital world and how industries can now leverage its unique properties. Ben is the Founder of Bambuu – a no-code platform for businesses to add digital collectibles to loyalty programs and increase customer engagement.
🏦 Banking In The Age Of Deepfakes….. The increasing sophistication of deepfake technology and the rise of voice deep fake fraud now pose a big problem to banks and their clients. Once a rare occurrence, the accessibility of these fabricated audio files has made it increasingly challenging for even the largest banks in the world to know who they're really talking to. Claremont entrepreneur and Reality Defender co-founder Ben Colman (CMC) shares his insights on how to better counter these threats.
💻 Shaping Industries With Quantum Computing….. In a recent Forbes article, Tech Council Member and Claremont grad Skip Sanzeri (CMC ‘83) discussed the potential for Quantum Computing to revolutionize multiple industries and the importance of regulation to balance the transformative power of this technology. Skip is the COO and co-founder of the leading quantum security company QuSecure.
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