How we managed to bootstrap our startup through two failed fundraising attempts to become the fastest growing marketplace in the solar industry with $1M ARR and 25% MoM growth- all in just 12 months.
It’s said in order to successfully raise money for your startup, you need to have at least 2 of these 3: Traction, Team and Relationships. As first-time entrepreneurs, who just moved to LA, my partner and I had none! We self funded the company from a tiny studio apartment in the valley for almost a year. Joined LA CleanTech Incubator in Q4, 2013, built and launched the MVP in Q1 2014. We closed our 1st deal the same quarter and won $100,000 from Innovation Fund SoCal. We tried to use the momentum and raise $500,000 angel investment but could only raise half of the round from our friends and family. No outside investment! With that $250K investment, we built a team of highly motivated, “inexperienced” college graduates who believed in our vision.
In May 2015, LA Mayor, Eric Garcetti, honored us as the Outstanding Small Business of the year. Right after that, we landed Google as a strategic channel partner and tried to use that momentum to raise an angel round in Summer of 2015.
This time, nobody invested!
With enough money to cover 3 months of payroll, we stepped into Q4, 2015. We were forced to restructure the company, let some people go and reset our plans. We were going to go through a Cockroach Mode! We put our entire focus on ramping up the sales and contributing to the bottom-line. In that same quarter, we earned 50% of the annual revenue, won the 1st place ($50K awards) at Techweek LA competition (beating 80 startups), won the 1st place ($50K awards) at Techweek National (beating 600 startups across the country) and won another $100K grant from Department of Energy’s SunShot competition. That quarter, we turned profit (so didn’t run out of money). Tripled our profit in Q1 2016 and hit $1M Annual Revenue Run rate in March 2016.
And we just closed our bridge round at $7M Valuation!