A Christmas Miracle: Now $5.5 million in, here’s how we BARELY closed our first round in 5 days during the holidays.
This story is about having no fucking clue what will happen, one lucky email, and the ignorant road to raising part of our $1.5m seed round in 5 days before New Year’s.
July 5th, 2013. Sitting in Spanish Bay, CA with my girlfriend browsing Instagram.
This is the email to a past co-worker who had been working on an idea. I thought maybe this could be a bigger idea. I always try to be helpful to anyone doing their own thing. This email then led to a 5 month side project. That then led to our seed round. Many have asked how our company got started, so here’s the first email about investment to our first $500k in the bank.
You never know when you will be in a weird situation that has no playbook. Use instincts, do the right thing and a lot of times things work out. When they don’t, you learn. Here’s how our seed round happened.
Friday, Dec. 13th 2013. 1:23p.m. PST. Sitting in my studio apartment in SF. Over 5 months since sending that first email. Product working, in app store.
Paige Craig intros me to Dennis Phelps. He proposed a phone call or a coffee meeting. Always choose in person, never opt for a phone call. Nothing good happens on a phone, everything good happens in person. I was thinking a 3–4 month window to explore fundraising. Dennis led Twitter and Snapchat $50m funding rounds, seems like a boss. Excited to meet.
Takeaway: I had known Paige for years. Always talked ideas. Never had an ask. His excitement using the product led to his intros. Build, share, repeat.
Friday, Dec. 20th 2013. 2p.m. PST. Sitting with my friend Ian Hunter at Jane on Fillmore.
Ian was having a latte. I was having an Americano. Never been a fan of the sweet stuff. Tapping my foot like crazy, quite nervous to walk a block. Dennis asked to meet at 2:30pm at The Grove on Fillmore. A block away from Jane.
My hands were shaking a bit. I was trying to be excited but I was actually nervous as hell. I stopped a bit out of sight of the entrance and shook out my hands a bit. Step it up I told myself. What’s the worst that can happen?
Dennis was sitting in the corner right next to the door. He didn’t stand up. A quick hello. 2 minutes of shooting the shit. Then 13 more to see what we built.
“Tell me what you got,” he says quickly.
I don’t remember anything I said but it lasted a total of about 15 minutes. He seemed to really like the idea, very nice guy.
Then Dennis tells me about a tax benefit for investors. He can only get it if I were to raise our round, and price it, by the end of this year, 2013. 13 days away.
I politely told him that wasn’t possible to do in 13 days but I would love to keep talking next year. It was also the holidays, no one else would be able to close by then.
I’ll never forget the last thing he said to me before he left:
“If VC money is available, take it. You never know what happens tomorrow. ”
Takeaway: Do meetings in person. Phones suck. Who intros you matters.
Sunday, Dec. 22th 2013. 3:41p.m. PST. On a flight home, my grandma passed away today.
Dennis really wants to close this round before the end of the year. One problem: I don’t have a lawyer, a shred of paperwork or even a bank account. There’s no way this can happen. And I just lost my grandma. But he follows up.
5:35pm: I call my good friend Eric. He’s actually the one who told me I should do this and I want his advice. My email basically tells him why this can’t be done.
Takeaway: Nothing is obvious. I grind my teeth when I’m anxious and scared.
Tuesday, Dec. 24th 2013. 2:41p.m. Christmas Eve. In Tremont, IL having lunch with my dad. Pacing on the phone in the street. Trying to pick a law firm.
I’m literally walking back and forth for 30 minutes in the crosswalk. My dad is inside the restaurant talking to the bartender. Neither of us has any idea what is going on.
I was trying to tell my dad everything is fine, look confident on the outside, this is just another step in my “career,” but I was honestly scared as hell. I couldn’t eat. I downed a Miller Lite with my dad. Doubt was setting in. I shouldn’t do this. If I don’t get it done will everything fall apart? I never learned this shit in college, what did I pay for again? Doubt. It was tearing me apart.
I’m becoming very hesitant about this. I think Dennis would be great but he wants 2 more investors to be in on this closing. I don’t want to rush investors over the holidays and my hesitation shows in this email. Probably should just give up on this round happening this year. Spent the rest of the day grieving with my family at grandma’s funeral. She was in her 90s. Full blown alzheimer’s. So sad to watch, I hope we find a cure soon.
Takeaway: Banks are closed on Christmas Eve, investors are not. Do work.
Wednesday, Dec. 25th 2013. Merry Christmas. 10a.m. CST. Sitting in my mom’s kitchen in Pekin, IL and my only computing device is my iPhone 5S.
Dennis calls me on the phone. He says let’s do this. Price the round, $7m pre-money valuation, he will put in $250k and I need to come up with 2 more investors and $250k more. Total must be $500k by Dec. 31st.
One caveat. Dennis is in Whistler, Canada. He can’t wire money. He decides to mail me a check, FedEx style. Then he finishes the call saying:
“Don’t cash it unless we get to $500k, 2 more investors, and finalize the terms. But I need it to be there before the 31st so I will mail today.
I now am fighting my internal critic screaming at me that there’s no way this can get done. While trying to calmly tell Dennis that I will try my best to find 2 more people. At the end of the day, all I can do is try.
Takeaway: Paper checks are still a viable option, what is going on? Get a fucking lawyer asap.
Thursday, Dec. 26th 2013. 12p.m CST.
The stress is starting to set in. My mother is asking me if everything is alright and I lie and say it is all good. Inside, I feel like everything is falling apart. Feel out of control. Hate this feeling. It is why I hate flying.
Onward. I need a lawyer. Asap.
I mean, it is the day after Christmas, they are probably working right? Amazingly I get a response instantly from an intro from a great friend of mine to Gordon Empey.
I remember the call like none other. It’s Thursday. December 31st is Tuesday. I ask:
“Can you issue founder shares, incorporate in Delaware, price a series seed round, and get this done by Tuesday?”
To which he replied, “Yes. This usually takes weeks. But we can do it.”
I didn’t sleep from now until the end of the year. I kept waking up every night. Dreams about my teeth falling out. Not turning in homework in time. Weird shit, I’m not still in college. My dreams are these crazy real-life nightmares. Stress really fucks up my sleep cycle.
I email Ken Kamada. He had expressed interest in our product, loved using it, and we had worked together for years in the past. I needed $250k more and 2 more investors. I asked him if he would be interested in $200k by December 31st. He said he would talk to his partners. I have no idea if he will be in our not.
At this point, documents are flying and I’m downloading apps on my iPhone 5S just so I can sign, send, read spreadsheets. Kind of blown away that I’m doing this entire process without a computer. Some things had to be done by my co-founder but almost all of it was done on my little iPhone.
My mother was worried about me pacing back and forth through her living room talking about funding rounds, ideas, getting this done, finding another investor, etc etc. The carpet had a path from my constant pacing. She made amazing cheese soup for me. Then I crashed. I need to sleep. This was not at all how I planned this trip.
Friday, Dec. 27th 2013. No idea what time it is, emails flying like crazy.
Gordon and Dennis are now talking terms over email. I try to act like shit is under control. No big deal.
I’m still wondering who the hell could be the last investor… I also have no idea if Ken is going to say yes or no. In case he says yes, I need one more person.
I decide that it is Friday night and I should go drink with the family. It’s rare that we are all in town. I got drunk. It was a good idea to take the night off, here’s some photos.
Takeaway: Always make time for family.
Saturday, Dec. 28th 2013. interested?
interested? That’s all the subject of the email said.
Galen Buckwalter was the original Chief Scientist of eHarmony. We met through both being involved with a company in Seattle called LikeBright. Nick Soman introduced us a couple years earlier.
I remember sending this email and shaking. I actually locked myself in my mom’s bathroom at her house so I could have some peace and quiet. I didn’t know if this email sounded like a dick move because of the timeline or a real opportunity. I truly believed having Dennis lead would be great, and it needed to happen.
Galen is one of the nicest and brightest people you will ever meet. His wife Deborah as well. I honestly had no idea what would happen. I mean, it’s Saturday. It’s 3 days away. It’s the holidays.
He responded within an hour.
“So psyched to be asked to join on this project. I will get an email into my tax guy ASAP. I had thought this year was buttoned up. But this is such a killer opportunity if you can give me today to talk to these guys I will be in a position to decide tomorrow, Monday at the latest. Hopefully that will work for you.
I’ll be in touch. Thanks!”
I haven’t heard from Ken. I haven’t received the check from Dennis. Gordon sends Galen the funding docs in case he his in. I’m more impressed than ever that a lawyer I met 2 days ago is making this happen.
Doubt. Self doubt for days.
Takeaway: Never know unless you ask. Build great relationships long before you ever have to ask. Never be pushy. Fuck doubt, it is a powerful emotion.
Sunday, Dec. 29th 2013. 11:13 a.m. CST.
At this point I have no idea what will happen over the next 2 days. I tell my mother all will happen, I truly don’t think it will at this point. Maybe I’ll move back in with my mom at this point, who knows.
No word from Ken yet, no check in the mail, haven’t heard from Galen.
11:13 a.m. I get this email. I can’t believe it.
For a split second, I couldn’t believe what I was reading. Then I smiled. A smile of disbelief kinda. Then anxiety set in, I still don’t know if Ken and his partners are in. Without them, nothing happens.
We march forward. Preparing closing documents in case the round closes. Dennis emails his signed signature page. Plus a reminder that his check will hopefully make it in the mail in time. Ha, this still blows my mind. He sent a check that I will have to rip up if this doesn’t come together.
Takeaway: You never, ever, need more time. Full C-corp, priced round, founder stock issuance, bank account opened, law firm hired… < 3 days.
Monday, Dec. 30th 2013. 10 a.m. CST.
I get this email from Ken. I have a knot in my stomach. There’s no way we are going to pull this off, especially with the signature pages needed today. Regardless, Eminem lyrics never hurt. “One shot, one opportunity, to seize everything you ever wanted… would you capture, or let it slip?”
No update by end of day. Still no check in the mail. No documents signed. This has to close by 3:30 EST tomorrow. Pretty much given up hope on this closing. Will figure it out next year.
Eat more cheese soup. Hang out with mom. Drink a beer. Sick to stomach. Can’t really eat. Great diet plan I guess.
Takeaway: Sometimes you just have to be patient and it ain’t over til the fat lady sings.
Tuesday, Dec. 31st 2013. 9:20 a.m. CST.
We basically have 3 hours or bust. These were the longest 2 hours of my life. At this point it is also out if my hands. I am planning to rip up the check when it arrives. I failed to get this done for Dennis.
11:30a.m. CST. They are in. We need to sign and wire within the hour. Holy shit, I think this is going to happen. Wait, where’s the check from Dennis? My mom still has no idea what is happening at her kitchen table.
I quickly send an email to Dennis looking for the tracking number. Learn that Dennis has bad hand-writing. I laugh out loud. What is happening? :)
2:22 P.M. CST.
Ding dong. Fedex guy is here. I literally screamed “WOOOHOOO” and the man thought I was fucking nuts. I grabbed the little tab on the edge of the package and began to open it. I was shaking, I was also barely pulling on it as if I would rip the check in half or something.
There it is. Shitty hand-writing and all. Signed Dennis Phelps. $249,999.40.
2:28 P.M. CST, 3:28 EST. It’s done. All wires have transferred. Signatures done. Check in hand. We literally had 2 minutes before end of business.
We did it. I couldn’t believe it. $500k first closing
I drank a beer with my mom. Like 5 of them.
Everyone told me never raise on holidays. Everyone told me you need a deck. Everyone told me pricing rounds takes more time. Everyone told me to plan 3–6 months for fundraising.
Things look easy and planned after the fact, that’s rarely the case. Insecurity was real. Doubt lingering the entire time. I’ve never had a week long pit in my stomach like I did this week.
Takeaway: If you have a great lead investor and they want to do it now, just do it. You never need more time. You just need to do it. Oh, and this is why deadlines matter. Time box everything.
Today, after a couple iterations, we are now Assist. We believe more than ever in messaging and helping businesses on messaging. Specifically with bots and automation to provide better service and commerce on messaging. My now co-founders Robert and Giovanni have helped us truly find our position and vision for the future. We are hiring, focused on building a diverse company, and have since raised a total of $5.5m to help us realize this vision. I’ve never been more excited than I am today.
Whenever I find myself excited about where we are I love to look back at where we came from. Especially why and how it all started. It has not been easy. Built some products, killed products. Hired teammates, edited teammates. Started over completely. Uncertainty, doubt, change, all part of the process.
One thing remains true: the people in your camp are all that matter and I couldn’t be luckier for who I have on board and helped us navigate the ocean to land where we are today.
Thanks more than ever to all of our 35 investors. But regarding this story, thanks to the first 3 musketeers; Dennis Phelps, Galen Buckwalter, and Ken Kamada. They’ve been amazing investors. Thanks to Gordon as well, the best attorney I’ve ever had.
Feel free to recommend this story if you liked it, follow me on Twitter here: Shane Mac
P.S.S. Thanks Danny Trinh (http://twitter.com/dtrinh) for the title help after my mother didn’t like the first one.