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Bootstrap First with Services from London, Raise Money Later: Rich Waldron, CEO of Tray.io (Part 5)

Posted on Thursday, Jun 25th 2020

Sramana Mitra: By the time you raised money, what did you have?

Rich Waldron: We raised a $2.2 million round in December of 2014. That was the first institutional check. Prior to that, we had some capital from the accelerators and we raised a small angel round off the back of that.

Sramana Mitra: How many customers did you have at this point when you were raising this $2.2 million?

Rich Waldron: Very few. Probably less than 10. I struggled to raise money transparently for the best part of the year. I had probably done over 150 investor calls and pretty much failed every hurdle.

The difference here is that the partner at the firm that we pitched had been a product manager at a very well-known integration company for many years and deeply understood the space and the challenges that came with it.

One of the real issues with building a deeply technical infrastructure type of business is that the amount of work that you have to do to get the product in shape to support customers robustly in a trustworthy manner is pretty significant.

By that time, we had a robust platform. We had the early inklings of an interesting partner referral model. We had a handful of customers. Revenue was pretty minimal at that point, but there was a history of engineering prowess. We had a very innovative approach to a market that had historically been full of very heavy enterprise sales cycles and deeply technical products that were only sold into IT.

We had a very disruptive model that allowed us to sell into businesses in a bottoms-up approach. The view there was, if this continues to scale, it would have a real impact on the industry. We found a fund that was prepared to take a chance on us. That was True Ventures.

Sramana Mitra: They were okay in investing in a London company? You remained in London?

Rich Waldron: We did. It’s actually interesting you say that because a lot of funds were put off because we wanted to keep engineering in London. We feel that there’s a huge advantage of being able to recruit across Europe. There are fantastic engineering universities here in the UK and London. We just felt that, from a talent standpoint, there was a true opportunity there. True Ventures was fine with that. A lot weren’t.

Sramana Mitra: This has changed.

Rich Waldron: Big time.

Sramana Mitra: Now people want you to have operations outside of Silicon Valley because it’s so expensive. I had a similar experience with my second company. I had built my entire product in India. I had a 30-people engineering team. This was in 1998. That was very affordable at that time.

I built the product all the way to paying customers with that engineering team. I was raising money in Silicon Valley. 47 VCs said no before NEA invested. Four years later, everybody’s like, “Do you have an engineering team in India?” They want you to have an engineering team in India. 

Rich Waldron: We’ve had the same experience. We just knew that we just had to be scrappy. We wanted to grow the company where it makes sense to. Headquarters is in San Francisco. We built our go-to market function there. We have roughly 120 people. It didn’t make sense to do that at that time.

We built that office in 2016 as the company began to scale. For the first four and a half years, it was very much heads-down scrappy work. As of the beginning of 2018, I think we had less than 20 people in the company. We ended 2018 at 70. We ended 2019 at 170. We’re roughly 230 today. A lot of that growth occurred in the tail end of those years. 

This segment is part 5 in the series : Bootstrap First with Services from London, Raise Money Later: Rich Waldron, CEO of Tray.io
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