“Burn The Ships, We’re All In”: How Pillar Pivoted Its Entire Business (After Raising $5.5M from Kleiner)

When COVID-19 hit, Michael Bloch pivoted Pillar away from student loans into a digital vault provider — and kept his investors happy. Here’s how.

Nathan Beckord
Feb 15 · 5 min read

When the government suspended student loan payments after the COVID-19 pandemic hit the U.S., many breathed a sigh of relief.

For Michael Bloch, that decision upended his entire business.

When Michael founded Pillar, it was originally meant to be a tool for tackling student loan debt. But after repayments were suspended, Michael “saw the writing on the wall” and reconsidered Pillar’s mission.

He came up with a new idea: Turn Pillar into a “digital vault” for families’ most important information, like medical records, financial accounts, and legal documents. Even though Pillar had already raised $5.5 million in a seed round led by Kleiner Perkins, they managed to pivot the entire business. Within months, Pillar became Pillar Life.

“This was just meant to be the plan B in case things on the student loan side did come back. But the more we started working on this, the more we realized it was even better than our original plan A,” Michael says.

Once that realization hit, Michael decided: “Burn the ships, we’re all in on this.”

In an episode of the How I Raised It podcast, Michael shares tips on raising money without an established network, and how to justify pivoting if you’ve already raised millions.

Use ‘brute force’ to raise rounds

When Michael began Pillar, he didn’t initially have any connections with investors.

So he started at square one. Michael put together a list of 300 potential angel and venture capital investors. He identified them by searching for people who had already stepped into the personal finance space. If he couldn’t find their email addresses, he guessed. And then he started emailing. And emailing. And emailing — a “barrage” of emails, as Michael puts it.

That’s how Michael got a hold of his first angel investor, Adam Nash. In fact, Michael emailed Adam three or four times before he finally got his attention.

Even if investors didn’t bite, Michael tapped into their networks. From there, his contacts continued to grow.

“Start with angel investors [and] don’t be afraid to go direct,” Michael advises. “I don’t believe in this need for warm introductions … If you have a compelling idea and a compelling story, there’s no reason why you can’t just go straight to the source and try and make these things happen.”

You’re worthy of an investment — prove it

Cold emailing can seem intimidating. But it’s “really just about telling the story about why your company is going to be successful,” Michael says.

Tell investors why they should believe in you. Maybe you’ve got credibility after working at a previous company. Or maybe you can impress because you know your stuff: You can easily talk about market demands, for example.

Keep potential investors updated on your progress too. Although Michael persistently emailed investors, he spaced the communication out over weeks and months. That way, he could update investors about progress like new hires or sharing new insights. These are the types of details that “make you more credible and show that … your slope is really high, regardless of where you start,” Michael says.

Although you might not get anyone’s attention at the beginning, that shouldn’t discourage you.

“Everybody is a no until they say yes,” Michael says. “And just like anything … you just gotta push through all those nos to make it work at the end.”

Early-stage relationships can pay off (especially if you need to pivot during a pandemic)

Pillar’s relationship with Kleiner originally began during pre-seed funding, when Kleiner wrote Michael and his team a small check. “I think they just really bought into our vision and what we were trying to accomplish,” Michael says.

Pillar’s relationship with Kleiner grew over the next six months before the venture capital firm committed to that initial seed round.

Michael notes that this is becoming an increasingly common tactic for investors: Come in early because things get competitive in the later stages.

There are “some signaling risks for founders of … what happens if they come in on the early days and don’t end up leading something later on,” Michael says. “But overall, if you feel confident about what you’re doing, I think the benefits of developing the relationship and both sides getting comfortable with each other can make a big difference.”

Those relationships can also help in unexpected circumstances, like when Pillar completely pivoted from student loan debt to general finance management. Pillar had a significant amount of runway left, but they also had the good graces of their investors because of those relationships built over time.

“Kleiner and all of our other investors have been incredibly supportive through this transition. There was actually never any talk of, ‘should we just give the money back because it wasn’t what you signed up for,’” Michael says. “I think everybody really saw the need of what we were building.”

In the end, Pillar raised an additional $1.5 million after it pivoted, in part because of the network it had already built.

Become your own accelerator

Pillar never participated in an accelerator; it just wasn’t the right move for them, Michael says.

Instead, Pillar cultivated its own connections. Michael built a network of people who didn’t necessarily invest money, but felt invested in Pillar’s success.

That’s “why we’re here now … really just being able to find some of those key mentors and guides that have been through this before and are just one or two or three years ahead of where the founder is themselves,” Michael says.

Once founders get past the initial humps of building a business, they can give their time and advice to others too. As Michael says, there’s huge value to “personal board of advisors of founders that have been in the trenches before,” — plus, there’s always value in paying it forward.

Nathan Beckord is the CEO of Foundersuite.com which makes software for raising capital. Foundersuite has helped entrepreneurs raise over $2 billion in seed and venture capital since 2016. This article is based on an episode of Foundersuite’s How I Raised It podcast, a behind-the-scenes look at how startup founders raise money.

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Nathan Beckord

Written by

CEO of www.Foundersuite.com. Fanatical about helping startups raise capital. Sailing and motorcycle junkie.

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Submit your story. We cover Business, Entrepreneur’s Success stories, Marketing and Entrepreneurship. We cover startup and the startup success stories. Tips on Entrepreneur, Business and better marketing, Search Engine Optimization, Content Marketing, startups ane more.

Nathan Beckord

Written by

CEO of www.Foundersuite.com. Fanatical about helping startups raise capital. Sailing and motorcycle junkie.

Better Entrepreneur

Submit your story. We cover Business, Entrepreneur’s Success stories, Marketing and Entrepreneurship. We cover startup and the startup success stories. Tips on Entrepreneur, Business and better marketing, Search Engine Optimization, Content Marketing, startups ane more.

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