Sramana Mitra: You said that until 2013, things were really cash-strapped but it sounds like you were picking up customers and that you were getting validation for your thesis at some level.
Brandon Levey: Correct. By the fall of 2011, we had about 60 customers. I think our total revenue was $500 a month. That was also when we started learning about venture capital.
August 2010 was when we did our first pitch. It was with Ann Miura-Ko, a partner at Floodgate. She’s a phenomenal woman. At that time, I think she was 8 months pregnant with her third child and she was taking this meeting as a favor. We got to the third slide on the deck. She cut me off and said, “No business has ever been able to penetrate the small SMB market. Give me an example of one that has.” I gave her of one that I thought was good. She said, “I wouldn’t exactly call that a big win.”
Sramana Mitra: Intuit is a big win.
Brandon Levey: I referenced PayCycle.
Sramana Mitra: PayCycle is a big win too. I know PayCycle very well.
Brandon Levey: It wasn’t a big win for her. I understand why she said it at that time. We learned a lot about our business over the next several months. It was actually an important moment in November 2011 when we met a man named Alex Bard. He was the co-founder and CEO of Assistly. He’s now the CEO at Campaign Monitor. It was at that time that we were having a conversation. He hypothesised, “If I bought your business for $5 million, would you sell it?” I said, “No.” He said, “What if it was $10 million?” I said, “I don’t know.” He said, “What do you mean you don’t know? Why would any investor want to believe that you’re building this billion dollar business when you don’t even believe it yourself?”
Less than a month after that, we had an acquisition offer from a much bigger company for much less than $10 million. We were raising capital at that time. We met Christiaan Vorkink at True Ventures in December of 2011. We closed our financing in 2012.
Sramana Mitra: How did you convince them? It sounds like market size and penetration were all question marks.
Brandon Levey: That’s a really good question. It’d be better to ask them, to be honest. I’m not entirely sure. We were just really excited. Michelle loves it. Jake loves it. We’re just all really passionate. We built a seemingly beautiful product at that time. It’s nothing compared to what we have today but at that time, it seemed great. We built a lot of other functionalities like dashboards and reports. Honestly, I think it was just because we were passionate about it and we were really customer-focused. They looked for that. As long as they have a general belief in the product, I think that’s enough.
Sramana Mitra: You closed your first round in 2013?
Brandon Levey: 2012.
Sramana Mitra: What were the next major milestones?
Brandon Levey: Over the next 10 months, we hired and fired a couple of people. At the end of 2012, we had five people in the company. We had an intern who was working with us. Robert and Bridge were some of our first employees. Robert was an engineer and Bridge was very analytical. We tried different pricing models. We did integration with Shopify and Bigcommerce. We were just really trying to figure it out. We had reached a maximum of $4,000 a month in revenue and then that went down to less than $1000 a month because we released a freemium pricing model. That takes us to January 2013.