Bootstrap the First Venture, Raise Money for the Second: cVidya CEO Alon Aginsky (Part 3)

Sramana Mitra: Other than the $400,000 that you got from the first investor, did you raise more money subsequently?

Alon Aginsky: No.

Sramana Mitra: You basically customer-financed the company, right?

Alon Aginsky: Yes, it was completely bootstrapped.

Sramana Mitra: So you finished college and then went to work for this company full-time.

Alon Aginsky: Yes. There was a good run in the US and also internationally. >>>

Bootstrapping with Angel Money: Josh Levy, CEO of BeenVerified (Part 6)

Sramana Mitra: Besides the $600,000 and the $200,000 that you raised, did you raise more money?

Josh Levy: We did. We did a Series B with another high net worth extended friends and family group for around $1.3 million in 2012.

Sramana Mitra: So you’ve raised over $2 million to build the business.

Josh Levy: Yes, over five years.

Sramana Mitra: This is primarily a friends and family/angels business that you have grown to about 100,000 subscribers. You’re basically looking to take it to the next level at this point, right?

Josh Levy: Yes. >>>

Bootstrap the First Venture, Raise Money for the Second: cVidya CEO Alon Aginsky (Part 2)

Alon Aginsky: Hotels made a lot of money from 800 number calls and calls made locally from the rooms. That was the second most important income for hotels, hospitals, and universities. I wondered if there’s something that I can do in New York. I grabbed a few of those cards with me and took a plane to New York. I didn’t have any idea about what to do but I had $400,000 and a few cards. >>>

Bootstrapping with Angel Money: Josh Levy, CEO of BeenVerified (Part 5)

Sramana Mitra: You started finding these use cases and segments as you launched in 2010. What did you learn about the business model and the pricing model? How did those decisions evolve and how did that turn into revenue?

Josh Levy: It’s a good question. Subscription models have been around forever, but they’ve also gotten much popular. We were on the earlier side, but probably still part of the trend of subscription models picking up. I would say, for a long time, we were committed to the subscription model because we wanted to stand out in the market in saying, “Maybe subscription isn’t for everybody. But for the people it is, we think you’re going to get more value.” >>>

Bootstrap the First Venture, Raise Money for the Second: cVidya CEO Alon Aginsky (Part 1)

As a variation on our ‘Bootstrap First, Raise Money Later’ theme, we also see many entrepreneurs who have bootstrapped a first company (or business), and then gone onto venture-fund a second. Christian Chabot built Tableau Software in this mode. Sridhar Vembu built Zoho. We have numerous examples of this tried and true path. Something to consider for first-time entrepreneurs chasing venture capital and Unicorns.

Sramana Mitra: Let’s start at the very beginning of your personal story. Where are you from? Where were you born, raised, and in what kind of background?

Alon Aginsky: I was born and raised in Israel. After completing my army duty, I found myself in New York as a young entrepreneur trying to make it. Luckily, I was able to pick an opportunity and start a company in the area of call accounting that later became billing for small operators. That company that I started was a one-man show in the Empire State Building. I managed, after seven years, to take it public on NASDAQ. >>>

Bootstrapping with Angel Money: Josh Levy, CEO of BeenVerified (Part 4)

Sramana Mitra: I’m interested in more granular information.

Josh Levy: I think TV is a great example. In 2007 to 2010, television was cheap. The market and the economy were down. It was a great time for us to step in and grow the brand through television. At that time, we had been trying Facebook as an acquisition strategy for a long time. We were just never able to get it to work. Now Facebook has become more of a specific opportunity to focus on.

For us, it’s about, “How do we get Twitter to work now? What about Instagram? What’s our strategy now that TV is expensive?” We still believe in not just direct marketing. We believe in investing in brand marketing as well. Another strategy we’ve always looked at Ancestry, which is in the genealogy space. Are you familiar with Ancestry?

Sramana Mitra: Yes, very much. >>>

Bootstrapping Using Services: Manish Sood, CEO of Reltio (Part 7)

Sramana Mitra: Why did you raise money? What was the thinking behind raising money?

Manish Sood: The thinking behind raising money was that we had validated the opportunity and had substantial revenue was being generated, how do we accelerate? We are still dealing with enterprise customers. Some of these sales cycles can be long. At the same time, we wanted to make sure that the enterprise customers do not have any questions about the viability or the longevity of the organization. We are here for the longer term to work with them.

Sramana Mitra: If you have a balance sheet and P&L like that, you can always share that with enterprise customers. They would be fine with that. I don’t think that’s a reasonable justification. You wanted to raise money seems like a better justification. My point is it’s not to convince your customers that you’re huge. They’re not going to question your viability and longevity if you tell them you’re earning more than $5 million. >>>

Bootstrapping with Angel Money: Josh Levy, CEO of BeenVerified (Part 3)

Sramana Mitra: What are the use cases? What are the drivers to want to subscribe to something like this? In my life, for instance, if I need to check somebody out, I go to LinkedIn and look at their profiles.

Josh Levy: If I have to pick the hardest problem for BeenVerified, it’s that we have too many different segments of users. It’s a gift and a curse. We have individuals who are just curious about what’s out there. Obviously, you have one type of service, which is a credit report. That only tells so much information. You have family members who are interested in things like, “Who are my kids dating? Who moved into my neighborhood?” We have people who are looking to reconnect. Obviously for a very large portion of people, Facebook and LinkedIn will solve that. >>>