SM: How did you finance the different phases of the company?
CL: In late 2005 and early 2006 we signed on two publishers that, together, quadrupled the size of our audience. We grew the company to the maximum extent possible with all the profits we’d accumulated.
A few months later, one of those publishers left the network. We had all these new sales reps and one-third the ad inventory. I thought we had a cash crisis on our hands. I called Michael Thomas, an advisor and the founder of some of the first sites to join the network. I told him that we were looking for some angel capital and he stepped up.
As it turned out, the cash crisis I’d feared didn’t arise and we found ourselves more profitable than ever. So Michael and I applied the money with the goal of building the largest travel planning audience online. We made it there with only spending half the money that we raised.
Michael brought a lot of industry connections and knowledge to the company that he had accumulated over the past 10 years in online travel and being involved with countless start-ups that he has either spawned or advised. I hesitate to call Michael just an angel investor because he’s been of such strategic value beyond an early stage investor.
The most important aspect of the relationship is the trusting and open door policy that we’ve developed. We’ve been through hard decisions together and countless entrepreneurial brainstorming sessions. The only advice I have here is that the right relationship with an experienced operator is more important than the valuation you can achieve in fund raising.