Editors Note – Cy is a friend of HostGator, currently pursuing entrepreneurial dreams in Silicon Valley. We have asked him to share his adventures. If you missed it see Part 1 The Spark: A Startup Is Born and Part 2 Perilous Pivots: When a Dream Meets Reality.
Traction is great, but it doesn’t keep a company alive. After five months of growth Contastic was picking up steam. We had hundreds of users on board and real revenue starting to trickle in. However, it was not enough to sustain our costs as a business. We had only three months of cash in our personal bank accounts left to survive. With that dwindling lifeline in mind I jumped into the process of fundraising.
It started with a bang; I made a long list of all the investors I knew from our time at Lightspeed. Everyone took a meeting – leading to at least a hundred coffees and calls. With each meeting we heard a new opinion that led us to create countless iterations of our pitch deck – presenting our company in a new light each time. Little did I know this would all be for naught.
I’d fallen into the classic trap of sales – failing to qualify. We were taking advice from many investors who chose not invest – no matter how we pitched ourselves. By taking their advice we scattered the messaging and wandered away from what really mattered – Contastic.
After setting into a feeling of hopelessness from all of the conflicted advice, I just gave up and pitched the next investor we met like a customer. The product we spent months refining had come to a sharp focus that could be conveyed in about a minute:
Simply put – Contastic tells sales teams who to contact, when to reach out, and what to say to close a deal. This saves time and increases prospect conversion rates. Focusing on this pithy value proposition led to instant and binary results.
Investors began to either instantly love our product (we closed one spectacular investment with a 30 minute phone call), or they would simply opt out. This eliminated the slow no – investors who would waste my time with endless questions and requests for information, but never invest. Investing in the early stage is purely emotional. Either it’s love at first sight, otherwise no amount of rationalization will get you there.
Armed with this knowledge, we ended up closing our lead investor on week two – with the rest of our round closing with a snap in the two weeks following the lead. We ended up raising almost double what we had originally intended. At the outset of the process our very survival was uncertain, but by its end we have the support of the very best in the world:
Although raising money concludes our series here, it’s only the beginning for Contastic as a company. This round of funding arms us with the means to compete in the big leagues. It’s up to us to sprint to build a real business. Closing our round is not the end – it is the beginning – the punctuation of a starting pistol. Now, it’s time for us to run.
I’m an engineer who loves to sell. My career started out in big data engineering for Microsoft evolved into a sales role that landed me as the founder of Contastic (getContastic.com). I bring the hard data-driven approach of an engineer to the softer science of sales. It’s always a pleasure for me to meet new people and help them evolve their sales practices. I blog at blog.cykho.com and tweet @cykho.