Bootstrapping an AI Startup to $10M from Boise, Idaho: Christian Perry, CEO of Undetectable AI (Part 3)

Sramana Mitra: Okay. What happens to that? How did you get the venture capital in Boise, Idaho?

Christian Perry: There are a couple of venture capital firms here in Boise, and there’s definitely a lot more moving in. The startup ecosystem has grown quite a bit.

I was in school at the time. After school, I would chat with my teachers—especially since I was taking a business degree. A lot of them were pretty well connected or had started their own businesses. I would say, “Hey, my name’s Christian. I’m passionate about business. I’m starting my own. Here’s what I’ve done so far. Is there anybody I can chat with or meet?”

Doing that enough times, I kept meeting more and more people. As they made introductions, I would repeat the same thing: “Hey, my name’s Christian, I’m an entrepreneur, and I’d love to meet anybody you know that I can learn from. I’m looking for mentors.” I continued to get introduced to new people and eventually got connected with Capital Eleven here in Boise. That’s where we raised our first round of funding.

Sramana Mitra: That was in 2022?

Christian Perry: Correct.

Sramana Mitra: What happened then?

Christian Perry: We worked on that for a bit, raised a good amount of money, hired some people, and started onboarding enterprise clients. Within a year, one of the companies that was licensing our technology offered to buy the company. We accepted that and, within a couple of months, started working on Undetectable AI, which is now Undetectable AI plus TruthScan.

Sramana Mitra: You didn’t have to go with that acquisition?

Christian Perry: No. ChatGPT had really started to take off, and I saw a lot of opportunity there. I took a much lower acquisition price and focused more on getting money back for the investors than enriching myself. Because of those negotiated terms and the lower buyout price, I didn’t have to stick around.

Sramana Mitra: But you made some money.

Christian Perry: I had. When you take on venture capital, investors often get liquidation preferences. They get their money back plus some before you see any money. I was okay with that because I was excited about what we were working on next.

Sramana Mitra: We try to remove liquidation preferences when we have negotiating leverage. But I can understand that, as a young entrepreneur in Boise, Idaho, you didn’t have that leverage. That’s quite understandable.

Christian Perry: Correct. I was also in a spot where, the way I looked at that business, it was either going to not work or become very large. I didn’t really anticipate a middle outcome, which is how I would define what happened. I didn’t plan for that.

Sramana Mitra: But the middle outcome is the higher probability outcome. Over 96.6% of exits are sub-$100 million, and the vast majority are sub-$50 million. Things don’t often get that large. You need to watch equity ownership and liquidation preferences if you want to make money off small exits.

Christian Perry: I would absolutely agree with you.

This segment is part 3 in the series : Bootstrapping an AI Startup to $10M from Boise, Idaho: Christian Perry, CEO of Undetectable AI
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