Building a Venture Scale Two-sided Marketplace for College Prep to $10M+ in Revenue: Empowerly CEO Hanmei Wu (Part 6)

Sramana Mitra: What you’re saying is that the lifetime value of the customers is very high. People sign up for an extended period of time to develop themselves and their resumes.

Hanmei Wu: Yes. We do have high AOV [Average Order Value]. It’s high consideration. So, I think those were all things that looked very good for us.

The other thing I do want to really emphasize is that finding the right investors is so key. This is actually a space that a lot of investors don’t really like. They don’t really love EdTech, they don’t love B2C. Some of them specifically don’t love college admissions. So, the mistake we had made early on in our fundraising journey was trying to talk to everyone.

Sramana Mitra: We have a very strict principle on that. We call it investor-entrepreneur fit. You should not talk to every Tom, Dick, and Harry investor. You have to find the investors who are interested in your stage, your segment, your sector, all of that.

Hanmei Wu: Exactly. So, we were a lot more intentional about investor-company fit. We sought only investors that did B2C and that were open to EdTech. We tried our best to find investors that were parents of teenagers, because they deeply understood the pain point more than someone who hasn’t really gotten to that stage yet.

Sramana Mitra: So, who did your seed round?

Hanmei Wu: Our seed was TransLink Capital, Spiro Ventures, Azure Capital Partners, Scrum Ventures, and a couple of other angels and VCs.

Sramana Mitra: And then Series A?

Hanmei Wu: In Series A, the biggest check was Goodwater Capital, and a lot of the other folks followed on. And then, for Series B, the lead investor was Conductive Ventures.

Sramana Mitra: And how did you get to these VCs?

Hanmei Wu: So I would say for the later rounds, a lot of it is about the connection.

Sramana Mitra: For the seed round, you went through the Berkeley Accelerator?

Hanmei Wu: Seed Round was through a Berkeley Accelerator. Then for Series A, I can’t emphasize how far warm introductions go, because I think it helped us come into the meeting strong, with a very strong intro. I was connected through a founder of a startup that I believe is now a Unicorn, but he was one of the portfolio companies at Goodwater. He sent a warm intro to the partner at Goodwater, and then my co-founder and I had that meeting. It was a very strong meeting directly with the GP, with an intro from a founder that the GP very much respected.

That was so important. We’ve also had meetings with the associate partner, but then you just have to go through a bunch of different things to get to the GP. They don’t it if you’re coming through a channel where they don’t really have an indication signaling whether you are worth their time.

Sramana Mitra: Right. Absolutely.

Hanmei Wu: So, the signaling we realized was incredibly important. We got that through that warm intro from that founder.

Sramana Mitra: I think if in your Series A, if you have an eight-figure revenue with great margin, that is not a difficult deal to find. You bring me that deal, I can get it funded.

Hanmei Wu: It was also a pretty frothy market back then. We had great traction.

Sramana Mitra: Traction is easy to fund in venture. The trickier thing is to get to traction. That’s the one.

Hanmei Wu: Yes. That’s much trickier.

This segment is part 6 in the series : Building a Venture Scale Two-sided Marketplace for College Prep to $10M+ in Revenue: Empowerly CEO Hanmei Wu
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