The Exchanges

Q Why have you decided to hold off on the institutional money? I'm intrigued.

A Yeah, it's a really, uh, interesting thought, actually. So at first, We didn't do institutional money because, you know, we didn't want the signaling risk. So like when you put institutional money into your seed round, and they don't lead an A round, it really sends a horrible message. So that's the first one. Um, and then two, for the next round, you know, we're only raising like a small chunk of money, like a 1000000.7, right? So no institutional is going to put in that little money, um, nor would you want to because of signaling risk still. And then my next round, I wanted to raise, like, you know, four and a half million, so same thing, you know, it's, like, such a small amount of money, and then also, you know, we're combining equity with debt, right? That's also pretty unusual, because we didn't want to overly dilute ourselves. I kind of like, you know, having my co-founder and I own vast, vast majority of the companies still, you know?

AI assessment note: “We didn't do institutional money because, you know, we didn't want the signaling risk.”

Q And speaking of transparency there, and some moments of transparency can lead to kind of moments of realization in what you're doing is not working, and there was a time when you realized that you created a vitamin and not a painkiller, you said, and you had a meeting with Steve Blank, and I'm intrigued. What did Steve say to you when you had this realization?

A Steve Link's a phenomenal investor and a mentor of mine. I, I love the guy. You still laugh about that by the way. I just saw him a few weeks ago and we were just reminiscing on, on that horrible time and chapter of my business. And, uh, and, uh, yeah, like I invited him to my office. He came over, you know, he's a professor mostly right now, but he's also been an entrepreneur and he's incredibly vulnerable. He talks about how he's like taking companies public and has You know, basically destroyed them overnight, and he's talked to me about everything, even more than that. It's just incredible, and yeah, he's just so honest and blunt. He's like, Jessica, like, what you're doing is not working. Like, you guys make no money, and like, it's not too late to change, and this was a year and a half in when I'm like, hey, I'm trying to fundraise. I'm trying to, like, get more money in, and he's like, you can't fundraise and scale something that's not working, and he also gave me crap about launching so quickly. I launched on, uh, July, second, 20, 10, and it was really a garbage product, and I wasn't ready for it, and he's like, Jessica, you just ruined your chance. Like, you could only have a public launch once, so you should have waited.

AI assessment note: “He's like, Jessica, like, what you're doing is not working.”

Q So how do you, so how do you think about assembling that perfect team of investors? Do you have kind of a checkbox of, I want someone to fulfill this characteristic, someone to fulfill that? What's, what's the kind of assembling plan for you?

A Yeah. I mean, I basically do have like a very small checklist for what I'm looking for. Like I do prefer people, uh, not be like money people. I want them to have operational experience and have experience running a company. I think that's just super important, because they ask better questions, they add more value, they put in more money, they give you better introductions to other people. That's the main requirement. And then after that, they just have to, you know, be like, have a great reputation. So I always do background checks on all investors just to make sure they have a good reputation. You know, a lot of people don't do that. I've turned down investors because I've talked to entrepreneurs who are like, yeah, this person's bad news. So be worried out there.

AI assessment note: “I basically do have like a very small checklist for what I'm looking for”

Q good. It's really interesting because, you know, to be honest, it's very contrarian to everything that I hear previously and, and feel myself, you know, for me, say I have a mission and founders I speak to have a mission, be it to improve SMB accounting. And so spending days, hours, months on the road, meeting investors does get in the way of fulfilling that mission. Do you find that?

A I mean, it's part of the mission, though. You know, you need the money to grow your business, so it is part of the mission. And then two, you get so much, like, value from talking to smart people. Like, if I didn't have to do my fundraising, if I had, like, just a massive inheritance from my parents, which, you know, I don't have, but let's say I did, and I didn't have to fundraise, Then I would miss out on so much mentorship. I wouldn't be as, you know, revenue focused if I had money, you know, lying around and easily available to me. I wouldn't be focused on core metrics that matter because I wouldn't be accountable to them if I only had my parents to deal with. This is incredibly valuable, I believe, and I'm a hundred percent certain my business would not be half as well off Um, if, if I had the money just sitting right there ready for me.

AI assessment note: “I mean, it's part of the mission, though. You know, you need the money”

Q good. It's really interesting because, you know, to be honest, it's very contrarian to everything that I hear previously and, and feel myself, you know, for me, say I have a mission and founders I speak to have a mission, be it to improve SMB accounting. And so spending days, hours, months on the road, meeting investors does get in the way of fulfilling that mission. Do you find that?

A I mean, it's part of the mission, though. You know, you need the money to grow your business, so it is part of the mission. And then two, you get so much, like, value from talking to smart people. Like, if I didn't have to do my fundraising, if I had, like, just a massive inheritance from my parents, which, you know, I don't have, but let's say I did, and I didn't have to fundraise, Then I would miss out on so much mentorship. I wouldn't be as, you know, revenue focused if I had money, you know, lying around and easily available to me. I wouldn't be focused on core metrics that matter because I wouldn't be accountable to them if I only had my parents to deal with. This is incredibly valuable, I believe, and I'm a hundred percent certain my business would not be half as well off Um, if, if I had the money just sitting right there ready for me.

AI assessment note: “I mean, it's part of the mission, though. You know, you need the money”

Q So how do you, so how do you think about assembling that perfect team of investors? Do you have kind of a checkbox of, I want someone to fulfill this characteristic, someone to fulfill that? What's, what's the kind of assembling plan for you?

A Yeah. I mean, I basically do have like a very small checklist for what I'm looking for. Like I do prefer people, uh, not be like money people. I want them to have operational experience and have experience running a company. I think that's just super important, because they ask better questions, they add more value, they put in more money, they give you better introductions to other people. That's the main requirement. And then after that, they just have to, you know, be like, have a great reputation. So I always do background checks on all investors just to make sure they have a good reputation. You know, a lot of people don't do that. I've turned down investors because I've talked to entrepreneurs who are like, yeah, this person's bad news. So be worried out there.

AI assessment note: “I basically do have like a very small checklist for what I'm looking for.”

Q So how do you, so how do you think about assembling that perfect team of investors? Do you have kind of a checkbox of, I want someone to fulfill this characteristic, someone to fulfill that? What's, what's the kind of assembling plan for you?

A Yeah. I mean, I basically do have like a very small checklist for what I'm looking for. Like I do prefer people, uh, not be like money people. I want them to have operational experience and have experience running a company. I think that's just super important, because they ask better questions, they add more value, they put in more money, they give you better introductions to other people. That's the main requirement. And then after that, they just have to, you know, be like, have a great reputation. So I always do background checks on all investors just to make sure they have a good reputation. You know, a lot of people don't do that. I've turned down investors because I've talked to entrepreneurs who are like, yeah, this person's bad news. So be worried out there.

AI assessment note: “I basically do have like a very small checklist for what I'm looking for.”

Q Why have you decided to hold off on the institutional money? I'm intrigued.

A Yeah, it's a really, uh, interesting thought, actually. So at first, We didn't do institutional money because, you know, we didn't want the signaling risk. So like when you put institutional money into your seed round, and they don't lead an A round, it really sends a horrible message. So that's the first one. Um, and then two, for the next round, you know, we're only raising like a small chunk of money, like a 1000000.7, right? So no institutional is going to put in that little money, um, nor would you want to because of signaling risk still. And then my next round, I wanted to raise, like, you know, four and a half million, so same thing, you know, it's, like, such a small amount of money, and then also, you know, we're combining equity with debt, right? That's also pretty unusual, because we didn't want to overly dilute ourselves. I kind of like, you know, having my co-founder and I own vast, vast majority of the companies still, you know?

AI assessment note: “We didn't do institutional money because, you know, we didn't want the signaling risk.”

Q good. It's really interesting because, you know, to be honest, it's very contrarian to everything that I hear previously and, and feel myself, you know, for me, say I have a mission and founders I speak to have a mission, be it to improve SMB accounting. And so spending days, hours, months on the road, meeting investors does get in the way of fulfilling that mission. Do you find that?

A I mean, it's part of the mission, though. You know, you need the money to grow your business, so it is part of the mission. And then two, you get so much, like, value from talking to smart people. Like, if I didn't have to do my fundraising, if I had, like, just a massive inheritance from my parents, which, you know, I don't have, but let's say I did, and I didn't have to fundraise, Then I would miss out on so much mentorship. I wouldn't be as, you know, revenue focused if I had money, you know, lying around and easily available to me. I wouldn't be focused on core metrics that matter because I wouldn't be accountable to them if I only had my parents to deal with. This is incredibly valuable, I believe, and I'm a hundred percent certain my business would not be half as well off Um, if, if I had the money just sitting right there ready for me.

AI assessment note: “I mean, it's part of the mission, though. You know, you need the money”

Q And speaking of transparency there, and some moments of transparency can lead to kind of moments of realization in what you're doing is not working, and there was a time when you realized that you created a vitamin and not a painkiller, you said, and you had a meeting with Steve Blank, and I'm intrigued. What did Steve say to you when you had this realization?

A Steve Link's a phenomenal investor and a mentor of mine. I, I love the guy. You still laugh about that by the way. I just saw him a few weeks ago and we were just reminiscing on, on that horrible time and chapter of my business. And, uh, and, uh, yeah, like I invited him to my office. He came over, you know, he's a professor mostly right now, but he's also been an entrepreneur and he's incredibly vulnerable. He talks about how he's like taking companies public and has You know, basically destroyed them overnight, and he's talked to me about everything, even more than that. It's just incredible, and yeah, he's just so honest and blunt. He's like, Jessica, like, what you're doing is not working. Like, you guys make no money, and like, it's not too late to change, and this was a year and a half in when I'm like, hey, I'm trying to fundraise. I'm trying to, like, get more money in, and he's like, you can't fundraise and scale something that's not working, and he also gave me crap about launching so quickly. I launched on, uh, July, second, 20, 10, and it was really a garbage product, and I wasn't ready for it, and he's like, Jessica, you just ruined your chance. Like, you could only have a public launch once, so you should have waited.

AI assessment note: “He's like, Jessica, like, what you're doing is not working.”

Q Why have you decided to hold off on the institutional money? I'm intrigued.

A Yeah, it's a really, uh, interesting thought, actually. So at first, We didn't do institutional money because, you know, we didn't want the signaling risk. So like when you put institutional money into your seed round, and they don't lead an A round, it really sends a horrible message. So that's the first one. Um, and then two, for the next round, you know, we're only raising like a small chunk of money, like a 1000000.7, right? So no institutional is going to put in that little money, um, nor would you want to because of signaling risk still. And then my next round, I wanted to raise, like, you know, four and a half million, so same thing, you know, it's, like, such a small amount of money, and then also, you know, we're combining equity with debt, right? That's also pretty unusual, because we didn't want to overly dilute ourselves. I kind of like, you know, having my co-founder and I own vast, vast majority of the companies still, you know?

AI assessment note: “we didn't want to overly dilute ourselves”

Q Absolutely, and you said there about the signaling risk, then at what point does institutional money not create negative signaling risk if they don't follow on? Are we talking series B, C style?

A Um, once they're, like, leading a A pretty sizable round, and they're putting in a meaningful check size, like, you know, they're putting in five, seven, ten million dollars, then, then it's fine, because, you know, there's no expectation for them to re-up in future rounds, and especially if they're, you know, a firm that isn't capable of doing that, or if it's not, you know, in their mandate to different stage rounds. I mean, in our case, it, it was just like, you know, we wanted to preserve ownership in the company, we didn't want signaling risk, and, uh, you know, we're really happy that we took this path. Also, The clock is ticking when you take money from these people, right? Like, you gotta return their money. You're giving up a lot of control, right? And you're subject to a lot more pressure. We really like having a lot of flexibility as a business, and so we build out our own independent board instead. So, you know, we don't work for them, they work for us. We're getting an immense amount of value this way, I wish I saw more entrepreneurs thinking about this from a first principles perspective and thinking about that.

AI assessment note: “once they're, like, leading a A pretty sizable round, and they're putting in a meaningful check size”

Q And speaking of transparency there, and some moments of transparency can lead to kind of moments of realization in what you're doing is not working, and there was a time when you realized that you created a vitamin and not a painkiller, you said, and you had a meeting with Steve Blank, and I'm intrigued. What did Steve say to you when you had this realization?

A Steve Link's a phenomenal investor and a mentor of mine. I, I love the guy. You still laugh about that by the way. I just saw him a few weeks ago and we were just reminiscing on, on that horrible time and chapter of my business. And, uh, and, uh, yeah, like I invited him to my office. He came over, you know, he's a professor mostly right now, but he's also been an entrepreneur and he's incredibly vulnerable. He talks about how he's like taking companies public and has You know, basically destroyed them overnight, and he's talked to me about everything, even more than that. It's just incredible, and yeah, he's just so honest and blunt. He's like, Jessica, like, what you're doing is not working. Like, you guys make no money, and like, it's not too late to change, and this was a year and a half in when I'm like, hey, I'm trying to fundraise. I'm trying to, like, get more money in, and he's like, you can't fundraise and scale something that's not working, and he also gave me crap about launching so quickly. I launched on, uh, July, second, 20, 10, and it was really a garbage product, and I wasn't ready for it, and he's like, Jessica, you just ruined your chance. Like, you could only have a public launch once, so you should have waited.

AI assessment note: “Jessica, like, what you're doing is not working. Like, you guys make no money”

Q Absolutely, and you said there about the signaling risk, then at what point does institutional money not create negative signaling risk if they don't follow on? Are we talking series B, C style?

A Um, once they're, like, leading a A pretty sizable round, and they're putting in a meaningful check size, like, you know, they're putting in five, seven, ten million dollars, then, then it's fine, because, you know, there's no expectation for them to re-up in future rounds, and especially if they're, you know, a firm that isn't capable of doing that, or if it's not, you know, in their mandate to different stage rounds. I mean, in our case, it, it was just like, you know, we wanted to preserve ownership in the company, we didn't want signaling risk, and, uh, you know, we're really happy that we took this path. Also, The clock is ticking when you take money from these people, right? Like, you gotta return their money. You're giving up a lot of control, right? And you're subject to a lot more pressure. We really like having a lot of flexibility as a business, and so we build out our own independent board instead. So, you know, we don't work for them, they work for us. We're getting an immense amount of value this way, I wish I saw more entrepreneurs thinking about this from a first principles perspective and thinking about that.

AI assessment note: “once they're, like, leading a A pretty sizable round, and they're putting in a meaningful check size”

Q Absolutely, and you said there about the signaling risk, then at what point does institutional money not create negative signaling risk if they don't follow on? Are we talking series B, C style?

A Um, once they're, like, leading a A pretty sizable round, and they're putting in a meaningful check size, like, you know, they're putting in five, seven, ten million dollars, then, then it's fine, because, you know, there's no expectation for them to re-up in future rounds, and especially if they're, you know, a firm that isn't capable of doing that, or if it's not, you know, in their mandate to different stage rounds. I mean, in our case, it, it was just like, you know, we wanted to preserve ownership in the company, we didn't want signaling risk, and, uh, you know, we're really happy that we took this path. Also, The clock is ticking when you take money from these people, right? Like, you gotta return their money. You're giving up a lot of control, right? And you're subject to a lot more pressure. We really like having a lot of flexibility as a business, and so we build out our own independent board instead. So, you know, we don't work for them, they work for us. We're getting an immense amount of value this way, I wish I saw more entrepreneurs thinking about this from a first principles perspective and thinking about that.

AI assessment note: “once they're, like, leading a A pretty sizable round, and they're putting in a meaningful check size”

Q I know it's a perfect, it's a perfect segue into my next question about capital allocation, because one of the most important elements you've said before about kind of being a good leader is being a frugal leader. So, so what do you mean by being a frugal leader? Is that, uh, merely kind of saving on certain parts and kind of scrimping on others? What's your take on this?

A Yeah, so let's talk about, let's talk about investors for a sec here, right? First off, as far as, like, capital allocation goes, what does that mean? On one hand, it's how to use your existing capital better, but it's also figuring out, like, who else to bring in, right? So I'm always spending, like, I don't know, 10% of my time fundraising, even if I'm not fundraising. Kind of interesting, it's like, well, Like, that's a waste of time, right? Like, that's what I hear a lot of entrepreneurs say. Fundraising is a waste of time, but it's such a core, critical part of what we do. It's not a waste of time, and before, you know, before we're talking now, we're discussing fundraising altogether. Like, I think we have to change this attitude, thinking, oh, fundraising's a chore, it's a waste of time, it's not value-add, to thinking, actually, fundraising is really important, and we need to start accepting it as being, um, Something that's, like, fun and fulfilling. Otherwise, we're going to fail at it. I was really influenced by this book I read recently, uh, David Axelrod. He was the campaign manager, the propaganda machine for Barack Obama, and he talked about how when President Obama was running for re-election, you know, his head wasn't in the game for campaigning, and I related that to fundraising, because when Obama, you know, his first, uh, debate with With Mitt Romney, he tot…

AI assessment note: “let's talk about investors for a sec here, right?”

Q I know it's a perfect, it's a perfect segue into my next question about capital allocation, because one of the most important elements you've said before about kind of being a good leader is being a frugal leader. So, so what do you mean by being a frugal leader? Is that, uh, merely kind of saving on certain parts and kind of scrimping on others? What's your take on this?

A Yeah, so let's talk about, let's talk about investors for a sec here, right? First off, as far as, like, capital allocation goes, what does that mean? On one hand, it's how to use your existing capital better, but it's also figuring out, like, who else to bring in, right? So I'm always spending, like, I don't know, 10% of my time fundraising, even if I'm not fundraising. Kind of interesting, it's like, well, Like, that's a waste of time, right? Like, that's what I hear a lot of entrepreneurs say. Fundraising is a waste of time, but it's such a core, critical part of what we do. It's not a waste of time, and before, you know, before we're talking now, we're discussing fundraising altogether. Like, I think we have to change this attitude, thinking, oh, fundraising's a chore, it's a waste of time, it's not value-add, to thinking, actually, fundraising is really important, and we need to start accepting it as being, um, Something that's, like, fun and fulfilling. Otherwise, we're going to fail at it. I was really influenced by this book I read recently, uh, David Axelrod. He was the campaign manager, the propaganda machine for Barack Obama, and he talked about how when President Obama was running for re-election, you know, his head wasn't in the game for campaigning, and I related that to fundraising, because when Obama, you know, his first, uh, debate with With Mitt Romney, he tot…

AI assessment note: “sorry, I, I think I missed your”

Q I know it's a perfect, it's a perfect segue into my next question about capital allocation, because one of the most important elements you've said before about kind of being a good leader is being a frugal leader. So, so what do you mean by being a frugal leader? Is that, uh, merely kind of saving on certain parts and kind of scrimping on others? What's your take on this?

A Yeah, so let's talk about, let's talk about investors for a sec here, right? First off, as far as, like, capital allocation goes, what does that mean? On one hand, it's how to use your existing capital better, but it's also figuring out, like, who else to bring in, right? So I'm always spending, like, I don't know, 10% of my time fundraising, even if I'm not fundraising. Kind of interesting, it's like, well, Like, that's a waste of time, right? Like, that's what I hear a lot of entrepreneurs say. Fundraising is a waste of time, but it's such a core, critical part of what we do. It's not a waste of time, and before, you know, before we're talking now, we're discussing fundraising altogether. Like, I think we have to change this attitude, thinking, oh, fundraising's a chore, it's a waste of time, it's not value-add, to thinking, actually, fundraising is really important, and we need to start accepting it as being, um, Something that's, like, fun and fulfilling. Otherwise, we're going to fail at it. I was really influenced by this book I read recently, uh, David Axelrod. He was the campaign manager, the propaganda machine for Barack Obama, and he talked about how when President Obama was running for re-election, you know, his head wasn't in the game for campaigning, and I related that to fundraising, because when Obama, you know, his first, uh, debate with With Mitt Romney, he tot…

AI assessment note: “let's talk about investors for a sec here, right?”