12 Udemy Courses on How To Build a Startup with a Small Amount of Capital

Most businesses can be launched in a capital efficient manner. Most businesses can go a long way in a bootstrapped mode. As long as you’re not taking on capital guzzlers like drug discovery or semiconductor chips, you have many options to explore.

At 1Mby1M, we don’t insist on fund raising. A bootstrapped, capital-efficient, million dollar business is considered a success in our worldview, as long as you are profitable and sustainable.

Non-Technical Founder Building a Tech Startup to over $10m: David Moricca, CEO of Socialive (Part 7)

Sramana Mitra: What is the total amount from friends and family investors to get to $10 million?

David Moricca: Maybe $9 million. $6.5 million was not as Socialive. A lot of companies do pivot. I hear stories about companies who fail for the first time. They just restart. The thing about that is you’re leaving your investors high and dry.

Sramana Mitra: That is correct. If you have professional investors who are accustomed to taking losses and just writing off things, it’s one thing. If it’s personal relationships at stake, you have to honor those. Friends and family investments have pros and cons. What you’re pointing out is that if you leave them high and dry, then you lose the relationship.

Non-Technical Founder Scaling SaaS Venture to Exit: Velocify Founder Jeff Solomon (Part 6)

Jeff Solomon: I talked to some other mentors and people I’ve met over the years and came to the conclusion that it was better for me to leave the day-to-day operations. I probably undersold my value to our Board and to our investors. The investors didn’t appreciate the scrappy founder guy like they do now.

Sramana Mitra: The general philosophy and appreciation of first-time founders has gone up tremendously. At the time that you’re describing, I don’t think we were quite there yet.

Non-Technical Founder Building a Tech Startup to over $10M: David Moricca, CEO of Socialive (Part 6)

Sramana Mitra: What year did you launch Socialive?

David Moricca: July 2016 was when we first brought the product out. Then we rebranded it to Socialive in October 2016. The last five years, we’ve been Socialive.

Sramana Mitra: How did you price the product?

Non-Technical Founder Scaling SaaS Venture to Exit: Velocify Founder Jeff Solomon (Part 5)

Sramana Mitra: What is the next major milestone in the history of the company?

Jeff Solomon: Two things. We started to get heavy in insurance. At that time, the secondary education market was growing fast. It’s a very similar model to mortgage in the sense that the money was coming from the government. There was a backlash in that category as well, but we were more careful.

We diversified into those categories which protected us. We found that the categories were anticyclical. When mortgage was up, insurance was down. When insurance was up, mortgage was down. We were able to ride waves and handle the downturnts pretty well.

Non-Technical Founder Building a Tech Startup to over $10m: David Moricca, CEO of Socialive (Part 5)

Sramana Mitra: Six years is a long time. How much money did you raise to get through six years with little revenue?

David Moricca: Over the years, probably $5 million or less. This was over six to eight years. It sounds crazy.

Sramana Mitra: I’m not surprised that you were able to survive on $6 million for six years. I’m surprised that you were able to raise $6 million given the fact that investors look for scalability. The whole point of venture capital financing is to go from zero to a $100 million in five years. Investors are notorious for pulling the plug the minute they see things not going in the right direction.

Non-Technical Founder Scaling SaaS Venture to Exit: Velocify Founder Jeff Solomon (Part 4)

Sramana Mitra: Go back to the 2004 timeframe when you were just getting started. How did you finance the product development and the early stage of the journey. It doesn’t seem like revenues were of a scale where you can fund it with revenues.

Jeff Solomon: Initially, we funded it with cash flow from the consulting business.

Sramana Mitra: Bootstrapping using services is what we call that.

Non-Technical Founder Building a Tech Startup to over $10M: David Moricca, CEO of Socialive (Part 4)

Sramana Mitra: When Ben comes on board, what are you able to accomplish? Did the business validate?

David Moricca: We did get Breakout Band built over the next couple of years. We ended up working with a couple of European engineers as well who were experts at audio technology. We also brought on a couple of our teammates who are still with us today. We got some users. We had a very passionate audience. They loved the platform, but it wouldn’t scale to millions of users for it to be a viable business. That was clear. We did go through the process of learning how to build and bring a product to market. We learned from that experience what was happening in the music space, which led us to our second product.