Sramana Mitra: What were your metrics when you were putting this round together? What kind of monthly revenue run rate did you have at that time?
Robert Moore: At that time, we were less than a million in revenue. That would translate to something to the order of a hundred customers, or just below a hundred. We were profitable when we raised that money.
Sramana Mitra: Awesome.
Robert Moore: We had to file a business tax return in 2011. We raised in 2012. When we started raising money, that’s when we made the deliberate decision that a lot of SaaS companies do, which is we know that we can put $1 out and we get $2 back in. It just takes a year to get those $2 back. If we want to make $2 million, then we have to put out $1 million today. That would mean that you burn cash in the short term. We made a deliberate strategic decision to make this be a growth business rather than a traditional net present value business. It started dipping into being a company that burns cash. We grew really rapidly. That’s when we started to achieve some real scale.
Sramana Mitra: Talk to me about the financing strategy then from 2012 to 2015?
Robert Moore: In January 2012, we raised $1.25 million in that seed round. A little over a year later in May 2013, we raised a $5 million Series A round from Trinity Ventures, which is a Silicon Valley VC firm.
Sramana Mitra: I’m good friends with those guys.
Robert Moore: They’re a great firm. They’re really supportive. Our Series B was done in August of 2014, about 15 months after the Seties A, for $16.5 million. In total, we’ve raised a little bit over $22 million. That’s the working capital that we’re operating off of today.
Sramana Mitra: Why did you choose Trinity versus other firms? Can you talk about your decision making vis-a-vis choosing the venture capitalist? It sounds like you had good metrics. When you have good metrics, a lot of people want to invest in you.
Robert Moore: We certainly had options. For us, it was really about the person who was going to be on our Board. I like all the partners at Trinity. I have a lot of respect for the firm as a whole. I talk to a lot of entrepreneurs who have raised money in that period of time and they all told me to really get to know the person that you are working with. When it’s all said and done, that’s the person who’s standing up for you in the partnership meeting. When you really need the extra infusion of cash, that’s the person who’s going to be in the Board Room. It’s really important that that relationship works.
There was a day when we were raising money when I was going up and down Sandhill Road in Silicon Valley. Over an eight-hour period, I probably had 10 meetings at various venture capital firms. In every single meeting that day, I felt really good. I said, “We presented our metrics. The person seemed engaged and excited.”
The only meeting that I walked out of where I felt like it didn’t go well was the meeting with Karan at Trinity. I felt like I was at the risk of coming off as pretty green and new and not knowing what I was talking about because he knew so much. He was asking precisely the smartest and hardest questions but doing it in a way that wasn’t your stereotypical obnoxious VC.
Sramana Mitra: You felt like you would learn from him.
Robert Moore: Exactly. If I could get some of what’s in his brain into my brain, I would be a better entrepreneur for it. That really stuck with me. Karan also really got aggressive about being our partner in those early days. There weren’t any games with him. If he hadn’t liked it, he would have told me right there on the spot. He very rapidly flew out to the office, met the rest of the team, and put an offer together. He effectively preempted our Series A by doing that, and I’m very glad that he did.