{"id":157,"date":"2021-06-15T05:40:40","date_gmt":"2021-06-15T05:40:40","guid":{"rendered":"https:\/\/bak.me\/blog\/?p=157"},"modified":"2021-10-11T04:23:05","modified_gmt":"2021-10-11T04:23:05","slug":"failed-startup-to-successful-exit","status":"publish","type":"post","link":"https:\/\/bak.me\/blog\/failed-startup-to-successful-exit\/","title":{"rendered":"The History of a Failed Startup to a Successful $128 Million Exit"},"content":{"rendered":"\n

This is the history of the founding, building and selling of Velocify<\/a> (formerly Leads360) as best as I can remember and from my personal perspective; in bullet point format.<\/p>\n\n\n\n

  1. In 1999 I co-founded my first startup, Xoop with 5 friends<\/li>
  2. I had a cool idea with no business model and no startup experience<\/a><\/li>
  3. We raised close to $300K from angels<\/li>
  4. We foolishly burned $300K in 3 months<\/li>
  5. In late 1999 the dot-com bubble burst and we went out like bell bottoms<\/li>
  6. I became mildly depressed and resentful<\/li>
  7. A few months later I founded my second company, ThinkLogic<\/li>
  8. Thinklogic grew to a fairly successful tech consulting firm mostly focused on ASP classic web applications<\/li>
  9. In 2002 I hired Chris Adams<\/a> to help me run the company<\/li>
  10. Around mid 2003 my friend, and co-founder from Xoop, Charles Chase<\/a> began doing contract programming for ThinkLogic<\/li>
  11. Soon after that, Charles finished his MBA program at USC Marshall<\/li>
  12. Charles said to me one day \u201cJeff, this whole ThinkLogic business is cool, but your not really building anything of value. You\u2019re never going to sell this company or build anything substantial. At best, you\u2019ve got a great lifestyle business.\u201d<\/li>
  13. That got me thinking\u2026 a lot<\/li>
  14. Enter Scotty Hewitt<\/a>, a sales guy who I\u2019d come to know during the Xoop days<\/li>
  15. Scotty began freelance sales efforts for ThinkLogic<\/a> and was getting some deals<\/li>
  16. I realized a lot of what Scotty was selling and what we were building was basically the same thing – lead management software<\/li>
  17. In Late 2003 Charles and I discussed the idea of building a SaaS lead management business which he endearingly named Leads360<\/li>
  18. That’s when the scheming started and when I began assembling the pieces for what would ultimately be Velocify<\/a>, the company that sold today for $128 million<\/li>
  19. Both Charles and I knew we didn\u2019t have the engineering talent at ThinkLogic to build this platform<\/li>
  20. Charles knew this guy Tony Christopoulos<\/a> from his days working at CyberU (now Cornerstone On-Demand)<\/li>
  21. Around March of 2004 Charles and I met with Tony for the first time in Vegas (yep, it all came together at the MGM grand)<\/li>
  22. We sold Tony on the idea of leaving his cush setup at CyberU to start Leads360 with us<\/li>
  23. But in the back of my mind I knew we had no way of paying him anything close to what he needed to live, even if he did it on the cheap<\/li>
  24. Tony had (has) a wife named Lynette<\/li>
  25. Lynette was pregnant and Lynette is pretty conservative and likes creature comforts<\/li>
  26. I knew she wasn\u2019t going to go for it unless I had some cashflow coming in for Tony, at least for a while<\/li>
  27. I also figured I\u2019d have to win her over with my charm or she\u2019d be out on that accord too<\/li>
  28. My scheming continued<\/li>
  29. At the same time Scotty brought ThinkLogic a new deal \u2014 different than the rest<\/li>
  30. This deal basically needed a full-time .NET, hardcore software architect (again, nobody at ThinkLogic fit that bill, we were all tech scrubs<\/em> really)<\/li>
  31. But Tony wasn\u2019t (a scrub<\/em>) \u2014 he was just what the doctor ordered<\/li>
  32. Of course I told that client I had the perfect guy at ThinkLogic and he was just finishing a project and was ready to rock (lies)<\/li>
  33. I got them to sign off on a 6 month flat $10K per month contract for remote full-time programming to fix and improve their software<\/li>
  34. Thinking back, I don\u2019t recall paying Scotty a rip on that one, but I did co-sign on this Chrysler 300 he so badly wanted then<\/li>
  35. A few days later I took my wife Aya to dinner with Tony and Lynette to try and close the deal<\/li>
  36. Remember, Lynette was a skeptic and she was pregnant<\/li>
  37. Of course Tony picks Sushi (which Lynette loves but can\u2019t eat) and drinks more than a few brews (which Lynette likes to do but also can\u2019t while pregnant)<\/li>
  38. I hard pressed Lynette and charmed her (I think); Tony helped, or hurt depending on how you look at it \u2014 and Aya helped too<\/li>
  39. Lynette signed off with minimal reluctance – I think Charles was thoroughly impressed knowing Tony and Lynette better than I did<\/li>
  40. By now Charles and I had Scotty buzzing on the idea mailbox money from SaaS software<\/li>
  41. And I had gotten Chris and ThinkLogic in a great position to incubate the whole operation<\/li>
  42. I maintained my income from ThinkLogic and split time between it and Leads360<\/li>
  43. Tony had the $10K per month from the consulting job I\u2019d closed<\/li>
  44. Charles continued consulting for ThinkLogic so everyone was making at least enough to survive<\/li>
  45. We started building the Lead Manager<\/em> as we soon began calling it<\/li>
  46. Then Scotty kinda realized something big \u2014 although I\u2019m not sure he realized how big it would be just then<\/li>
  47. The latest iterations ThinkLogic was building for Scotty\u2019s sales deals were not only the same lead management solutions, but they were the same type of customer – mortgage brokers<\/li>
  48. Mortgage\u2026 ooh\u2026 a double edged sword<\/li>
  49. In mid 2004 we had our first version of Lead Manager<\/em> ready for prime time and Scotty had our first client<\/li>
  50. Enter Curt Melone and Pac West Funding, the self proclaimed \u201cFather of the Lead Manager”<\/li>
  51. Curt and his sizable sales team helped shape early features of the product and introduced us to the world of lead generation<\/li>
  52. Sometime in early 2005 we met Matt Coffin<\/a> and LowerMyBills<\/li>
  53. LMB was literally printing money by generating sales leads for mortgage brokers<\/li>
  54. Side note, I had met Matt years earlier through a college friend and he invited me to join him building LMB, back when they were actually going to try and lower peoples bills<\/li>
  55. In hindsight (something I\u2019ve learned a ton about through this process, I probably would have made a lot of money being the 1st employee at LMB \u2014 Matt sold LMB to Experian in later that year<\/li>
  56. Matt had a pretty key insight that he played close to his vest at first \u2014 that lead management software solved LMB\u2019s #1 problem \u2014 selling more leads and retaining customers<\/li>
  57. We realized that not too long after and convinced Matt it was better to partner with us than build his own solution<\/li>
  58. Huge win for us \u2014 for the next 2 years LMB and other lead generators like LendingTree became the primary user acquisition channel for us via referrals<\/li>
  59. At one point I remember overhearing an LMB sales rep tell a prospect that he wouldn\u2019t even sell them any leads until they setup Leads360 \u2014 it was just a waste of time<\/li>
  60. From day 1 I had started an aggressive content marketing strategy \u2014 planting seeds that continue to serve us even now<\/li>
  61. From 2005 – 2008 I focused our marketing to position us as the expert in lead management best practices \u2014 and we began to back that up with performance data from our clients<\/li>
  62. My blog posts, white papers, sell sheets, pitch decks, sales presentation, everything were about Leads360 being the company that teaches you how to close more leads \u2014 and we did just that<\/li>
  63. Sometime in 2006 we realized we needed money to scale our exploding business<\/li>
  64. Tony loaned the company $300K (I think that was the amount)<\/li>
  65. We hired two key engineers that are still at the company: Drew Markovitch<\/a> and Jeff Zhen<\/a>, along with Tony, these guys single handedly built, managed and maintained our entire tech stack – total fucking rockstars and really good people<\/li>
  66. I began looking into venture funding \u2014 none of us had any experience in that arena and LA was a desert in terms of startup resources, angel investors, seed capital and even VC\u2019s<\/li>
  67. I eventually got connected with Tech Coast Angels<\/a> \u2014 who were fairly legit at that time \u2014 and got invited participate to their Fast Pitch Competition at UCLA Anderson<\/li>
  68. I listened intently to the instructions along with 20 other startups at the preparatory meeting and heard loud and clear when they said \u201cit\u2019s 60 seconds, after 60 seconds we turn off the mic\u201d<\/li>
  69. My pitch was epic and I practiced it time and time again until I had it memorized, perfect and at exactly 58 seconds (you can even listen to the original fast pitch audio here<\/a>)<\/li>
  70. I got lucky, in addition to completely crushing the competition and wining every category that day \u2014 John Babcock<\/a>, partner at Rustic Canyon, was a panel judge<\/li>
  71. Rustic Canyon was one of the few real VC\u2019s with a sizable fund at that time in LA and John loved me (what\u2019s not to love)<\/li>
  72. Side note, if the instructions are \u201cfinish in 60 seconds\u201d then fucking finish in 60 seconds, at least 10 of the 20 participants didn\u2019t do this<\/li>
  73. Soon after that we had a term sheet for $3.25 million, along with 2 other competing term sheets<\/li>
  74. After some deliberation and some negotiation (they tried to smack us with a bs 2.5X participation in the first iteration) we chose Rustic<\/li>
  75. Chris got bought out, Scotty got a slug and we we\u2019re ready to start the next phase of Leads360<\/li>
  76. I was the CEO of a real company Jack<\/a> (ala Boogie Nights), with a real board, a real stock option plan \u2014 everything I always wanted, so I thought<\/li>
  77. So we did what any good startup that\u2019s growing like made and just got an influx of capital \u2014 we spent it<\/li>
  78. We hired people, we upped marketing, we did trade shows \u2014 we were crushing it, and we still were, but that was about to end<\/li>
  79. Part of the funding agreement had us hopefully bringing on a flashy industry board member in addition to the founders and the Rustic crew<\/li>
  80. John and I had our sights on Matt Coffin, and although I had developed a pretty strong bond with him by then, he wasn\u2019t feeling it \u2014 I\u2019m still not entirely sure why, maybe conflict or too flushed with cash to care enough \u2014 but he was very helpful still<\/li>
  81. At one point I got to meet the Experian executive that lead the LMB acquisition deal, Ed Ojdana and while he was quite a bit older, way more seasoned and probably freaked out by my hacky style \u2014 he took a liking to me and our company<\/li>
  82. I convinced John that Ed would be a great addition and that I thought I could sell him on the idea of joining our board \u2014 and that\u2019s what happened; I think that bought me some much needed points with John down the line<\/li>
  83. Earlier that year we had run out of space in our shitty little Inglewood office and the founders had bought a killer warehouse building in WEHO (again, with Tony\u2019s help on the down payment)<\/li>
  84. Side note, Tony came from money and as much as he always seemed broke personally, he could always come up with big chunks of cash when he needed it<\/li>
  85. We were still bootstrappers at heart and we\u2019d built out this new space with our bare hands (and some help from Tony\u2019s brother)<\/li>
  86. I nearly died stringing CAT5 cable along the top of a 50 foot high wall \u2014 the ladder dropped out and I magically grabbed the ledge and was hanging to my death \u2014 Charles was there and saved me<\/li>
  87. Sadly, like many startups and first time founders do, we burned through a ton of that cash in the next 12 months<\/li>
  88. This would have been ok because we were growing big time, but then in 2008 the shit hit the fan \u2014 the financial crisis happened and subprime mortgage was at the heart of that<\/li>
  89. Of the 1000+ clients and $400K\/month in recurring revenue we had going into 2008, a good 85% of them were in subprime mortgage<\/li>
  90. From 2008 to 2009 we cycled through nearly 100% of our clients \u2014 backfilling some, but not most and we were in deep shit<\/li>
  91. As much as your VC is a partner and wants you to succeed, they\u2019re also pretty keen on sharking bloody waters \u2014 good for them, in this case it paid off<\/li>
  92. We hunkered, let go a bunch of people, including some that we really liked and had just had meetings with a month earlier selling them on their long term role in the company \u2014 that was rough<\/li>
  93. In November 2008 I took my wife on a babymoon to Hawaii, partly because well, we were pregnant, but also because I was stressed as fuck by that time<\/li>
  94. I recall talking with John Babcock from our hotel room, trying to figure out what to do, we were at odds; he didn\u2019t want us to fail, but he wasn\u2019t about to back a sinking ship<\/li>
  95. I got pissed. In a pretty bitchy voice I told him “fuck it, I\u2019ll shut down the whole thing, I don\u2019t give a shit\u201d or something to that nature<\/li>
  96. Obviously I didn\u2019t shut it down, but I was ready too<\/li>
  97. I honestly don\u2019t know how Charles and Tony were feeling at the time \u2014 I know for sure that I took on the weight of this company way more personally than they did \u2014 which caused me more pain and them less of it.<\/li>
  98. Of the many lessons I learned through this whole experience, one certainly was speaking up, on all levels, when I need help, when I know what to do, or when I don\u2019t agree (more on that soon)<\/li>
  99. John agreed to give us more money \u2014 a Series A \u201cextension\u201d ala, the same valuation, which incidentally was about $10MM pre money \u2014 which is absurdly low in today’s market for a company doing north of $350K\/month in recurring SaaS revenue<\/li>
  100. I think they gave us another $1 million and we got some breathing room<\/li>
  101. Sometime just before or soon after another Rustic partner, Dave Travers, who would later replace John on our board, introduced me to a HBS friend of his that was looking for a key role at a budding startup<\/li>
  102. Nick Hedges was about as polished as they come \u2014 a total HBSer \u2014 and we seemed to complimented each other and I think we had a mutual respect \u2014 I certainly did and do to this day (for obvious reasons as you\u2019ll soon learn)<\/li>
  103. In an attempt to close Nick, who had previously been at Bain (of course) and I\u2019m sure had mad offers from tons more well oiled startups than ours, we took him to some fancy hipster restaurant in WEHO<\/li>
  104. And, in a twist of fate that I can\u2019t say inked the deal, but certainly didn\u2019t hurt it, one of my friends from college was our waitress \u2014 not just any friend \u2014 I wonder if she even remembers this story<\/li>
  105. Andrea Andes was literally one of the hottest girls at Arizona State in 1996 when I graduated \u2014 and that\u2019s saying a TON (yeh, I went to ASU)<\/li>
  106. Even then I was good at inserting myself into the right situations \u2014 she was dating a guy who\u2019d really come to like and trust me \u2014 and so did she; I hadn\u2019t seen her since graduating 10+ years earlier, but we instantly recognized each other<\/li>
  107. And Nick recognized her too \u2014 I mean as a totally hot blond girl that the CEO of the company he was being courted by knew on a very personal level \u2014 yeh, it helped<\/li>
  108. Suffice to say, Nick came on board. I had also closed another key hire earlier that year, Josh Evans<\/a>, who had come from Cars Direct and the 5 of us rounded out the executive team<\/li>
  109. Side note, Josh and Nick stuck it out to the very end and are still at the company; Josh as SVP of Client Services and Nick as CEO \u2014 they have my gratitude<\/li>
  110. With a fresh million in the bank and the market beginning to stabilize, just a little, we started growing again, slowly, but steadily and this time we we gave some thought to client diversification<\/li>
  111. One of the caveats to Johns \u201cextension\u201d funding was that we get some gray hair CEO that knew what the fuck he was doing type guy in there and I would give up the role<\/li>
  112. Major learning for me right here – don\u2019t be a pussy – that\u2019s harsh, but really I had issues with standing my ground on what I thought was best, and I promise you, no matter anyone tells you (and I can\u2019t imagine anyone would) when I did make decisions and take action, I delivered amazing results \u2014 but I didn\u2019t have the confidence I do now, or wish I did back then and that hurt me and the company<\/li>
  113. Enter Dan Morefield<\/a>, a seasoned CEO previously at Yahoo \/ Overture<\/li>
  114. Dan was a good guy, and don\u2019t get me wrong, I had to sell him too \u2014 I had to sell him on taking over my job \u2014 mind fuck for me, but it wasn\u2019t really, b\/c in some ways I was already done with CEO of a 50+ person company<\/li>
  115. Side note, I wouldn\u2019t be CEO of a 50+ person company if you paid me the proper salary for a CEO of a 50+ person company \u2014 I\u2019m not that guy, but the truth was, neither was Dan<\/li>
  116. Dan took over, Charles left \u2014 was kinda squeezed out really, but he, like me who didn\u2019t realize it till later, was NEVER getting any more stock, so other than salary and ego boosting, there wasn\u2019t much left to gain at the company<\/li>
  117. I on the other hand had a lot more to give and I did just that \u2014 starting with head of product (which I was already doing as CEO), then head of marketing (which I was already doing as CEO), then head of sales (which I was already doing as CEO), then as head of enterprise sales (which we didn\u2019t have until I did it)<\/li>
  118. I\u2019m a really good generalist, that\u2019s incidentally why I\u2019m great at starting and growing companies but not great at scaling them and I don\u2019t really like it either; fortunately Nick is (more on that soon)<\/li>
  119. Dan did help us get some process in place, some accountability, some structure \u2014 but the truth was he just moved to slow for all of us and for the company; on top of that his wife got very sick soon after he took the job and he was already driving up from OC \u2014 a perfect storm that made it hard for him to do what he came there to do<\/li>
  120. Side note, one of the side effects of me giving up the CEO role was that Rustic lost their appreciation for my importance in the company. I\u2019m not sure what Dave or John would say now, but I know, and I think Nick knows, a ton of the success over the next 8 years were due to the work I did in those 2 years after stepping down as CEO<\/li>
  121. Tony, Drew, JZ and I worked very closely together over the next year improving the Lead Manager<\/em> and we did, big time<\/li>
  122. From 2009 – 2010 we really started breaking away from the competition in terms of product depth, best practice knowledge and performance<\/li>
  123. Most of the big mortgage companies that were still around were now back on our system and we were starting to get some good clients in Insurance, Education and other B2C categories<\/li>
  124. Another key person in the company on the product team was Chris Kinnear<\/a> – a total work horse who became a right hand man for me and all the product development were were working on<\/li>
  125. Chris hired a junior product manager named Sandhya Pujari<\/a> who was also a work horse and a great asset<\/li>
  126. Until then Leads360 was primarily a CRM-esque solution with no dialer; we had built a pretty shabby click-to-call solution from our product, but nothing more<\/li>
  127. Sandhya and I were working on enhancements to our click-to-call and some pretty innovative ideas around automated dialing from within our software but at that time the ideas fell on deaf ears among the board and Dan, although I think Nick saw the potential<\/li>
  128. Interesting side note, while Sandhya and I were figuring out what to build, I was figuring out how we were going to build it \u2014 telephony was complicated and not our core expertise<\/li>
  129. We talked about building our own stack to do it, we talked to various consultants in the telephone space to help us, but it just didn\u2019t make sense<\/li>
  130. There were a few 3rd party SaaS companies that provided API\u2019s and aspects of what we wanted, but we still weren\u2019t sure<\/li>
  131. That\u2019s about the time I met Jeff Lawson<\/a>, founder of Twilio<\/a><\/li>
  132. Jeff had barely any traction with Twilio at that point \u2014 he had some legit venture investors and is obviously a smart guy, but he was pretty early in a nascent market<\/li>
  133. I remember flying up to San Francisco and meeting with Jeff Lawson during Dreamforce (maybe 2008 or 2009)<\/li>
  134. Sitting at some little coffee shop in the Mission, Jeff told me the story of how he decided to build Twilio \u2014 it\u2019s foggy, but he said he had taken 6 months (maybe longer) and isolated himself at his buddy\u2019s house (I wanna say in the Hamptons, but I don\u2019t remember) and just spitballed ideas with this guy (either his co-founder or some VC guy)<\/li>
  135. They talked about literally anything and everything and eventually came to the idea of a distributed SaaS platform for communication \u2014 telephone, messaging and more \u2014 ala Twilio; it was kinda inspiring<\/li>
  136. Needless to say, Twilio was way smaller than we were at that time I\u2019m pretty sure and I think he wanted our business more than I wanted him as a partner<\/li>
  137. We chose Twilio as our partner and started building on their platform; at first we were helping them way more than they were helping us \u2014 the didn\u2019t have shit that we needed and it was buggy as hell<\/li>
  138. I doubt any other client of theirs at that time was more helpful at flushing out the platform and features than we were \u2014 and at one point we were the largest client on Twilio in terms of minutes used and even at the time of the IPO were were top 10 \u2014 and we still use Twilio today<\/li>
  139. Around that time we started running out of space in our hipster warehouse building in WEHO and we moved to a corporatey cubicley spot in the Ivory Towers in El Segundo (Ala the Oracle buildings)<\/li>
  140. Side note, apparently Larry Ellison had some crazy dragon’s lair on the top 3 floors of the building that barely anyone had ever seen \u2014 all kinds of crazy rumor stories about that place (I never saw it)<\/li>
  141. Nick was pretty frustrated by then; he wasn\u2019t a huge fan of Dan or the board at that point, but really he just wanted to be CEO and wasn\u2019t; I don\u2019t blame him and I had to do a fair amount of damage control to keep him on board<\/li>
  142. Sometime in late 2009 we hired our first enterprise sales guy away from Eloqua; Tim Dunlea<\/a> and I began building out enterprise sales for the company<\/li>
  143. In mid 2010 Dan left the company and we promoted Nick to CEO, he was stoked I\u2019m sure; and while it was weird reporting to the guy I\u2019d hired back at that fancy restaurant years earlier, it didn\u2019t bother me as much as you might think<\/li>
  144. That\u2019s about the time I started to get the feeling \u2014 the feeling that I was cut out to be one thing and not another \u2014 and the feeling that that was totally ok<\/li>
  145. I split my time between running product and marketing to general culture building \u2014 and began working enterprise clients in earnest with Tim Dunlea<\/li>
  146. I spent the better half of 2010 traveling the country with Tim trying to close deals with 100+ seats (SaaS users)<\/li>
  147. From Plantation Florida to Kent Ohio and Racine Wisconsin we met with some of the biggest mortgage companies, insurance agencies, educational institutions and even the largest cremation services organization in the country\u2026 yes, human cremation, it\u2019s a big business (we closed that one 1000+ seats)<\/li>
  148. From a salary standpoint I was actually making the most money I\u2019ve ever made with base + commissions, it was pretty cool<\/li>
  149. At that time I was also working closely with Sandhya and Drew to build out our dialer features in the Lead Manager<\/em> \u2014 we had some really big ideas here and we knew this was going to be essential to the future of the company<\/li>
  150. Still, even with Nick at the helm, our board wasn\u2019t really hearing it \u2014 they had become extremely conservative and I\u2019d pretty much lost my magic with them by then \u2014 we could barely get agreement on anything we wanted to do that wasn\u2019t status quo \u2014 it was frustrating<\/li>
  151. As much as I was coming to appreciate what I was good at and what I really wanted to do and be in my career I also realized I had created some of the challenges we were dealing with at that time<\/li>
  152. In the beginning, I was a visionary, I saw that and people believed and appreciated that quality in me, including John Babcock and our board<\/li>
  153. Later, as the company matured, maybe I didn\u2019t and I lost confidence in myself; and what had gotten us this far was kinda failing and Nick, our investors and even my partners to some extent felt it<\/li>
  154. 2010 was exciting on the one hand because I was having success with enterprise sales but stressful on the other hand because I was coming of age<\/li>
  155. That all being said, I knew in my bones we had to jump on this dialer stuff; I knew it intuitively and I had been the only one doing actual customer development from being in the field with our biggest prospects and future clients that year<\/li>
  156. Nick agreed, but he too was in a precarious spot; he had to cement himself as CEO and gain trust with the board \u2014 so he couldn\u2019t come out guns blazing on Solly\u2019s crazy product vision \u2014 he had to walk a fine line<\/li>
  157. Side note, one of the things I\u2019ve learned throughout my career is that it\u2019s a fine line between every man for himself and placating the interests of those around you \u2014 the best entrepreneurs know how to do this and Nick certainly did<\/li>
  158. In late 2010 I remember Nick telling me that if I wanted to get the board to agree with me and allocate resources to this whole dialer business, I would need to put together a proper, fully data supported, presentation \u2014 straight Bain style he thought<\/li>
  159. Truth be told, Nick was already there, but if it was gonna fail on the board, he wanted me to deliver it, not him \u2014 and if it got any level of positive reception, he\u2019d back it \u2014 Nicks no dummy and I respect him<\/li>
  160. I spent a good 3 weeks developing one of the most detailed and thorough presentations of my life \u2014 In hindsight it was truly the best PRD I\u2019d ever written because it had a ton of customer development data to support the features \u2014 and the feature set was rich; pushing the company product roadmap out several years.<\/li>
  161. I wish I still had that presentation<\/li>
  162. At the next board meeting, I made the pitch and I pressed hard \u2014 deep down I knew this was going to be the last thing I sold to the board because I was pretty close to letting go of the baby I\u2019d founded and ready to move on to something else<\/li>
  163. They bought in, although I wouldn\u2019t say with flying colors \u2014 but Nick took the reigns and supported it and we began building<\/li>
  164. I got to see some of the fruits of my labor, but not everything I had envisioned happened before I left<\/li>
  165. In early 2011 I sat down with Nick, at IHOP lol, and told him it was time for me to go<\/li>
  166. I kinda felt like he had mixed emotions on my departure; on the one hand, this is what he wanted, now it was his company and I wasn\u2019t going to meddle anymore<\/li>
  167. But also, deep down I think he knew that I was the heart of the company and certainly the product and was scared about those pieces landing on his shoulders<\/li>
  168. A month or so later I announced to the company I was leaving in a heartfelt all-hands meeting<\/li>
  169. I had begun conversations with Paul Bricault around then about starting an accelerator her in LA which we launched later that year named Amplify.la<\/a><\/li>
  170. I told people at Leads360 that it was time for me to go start something new, that I was really cut from a cloth that was woven to build companies, to a point, but not scale them beyond that<\/li>
  171. Amplify was a great next step because I was building a company but also would be investing in hundreds of other companies so I\u2019d be in the thick of things \u2014 maybe I\u2019ll tell that story later<\/li>
  172. I remained on the board until January 2012 when we closed our Series B with Volition partners (that was all Nick) and I took a million and some change off the table<\/li>
  173. Side note, I wish someone had advised me (although I admit I didn\u2019t really seek any advice) to only sell what I needed, and I did have good use for some, but not all of that money<\/li>
  174. The $1.3 million I took then would have been worth nearly $4 million today (lesson learned doh)<\/li>
  175. Off the board and out of the company, for the next 5 years I didn\u2019t have much input at Leads360<\/li>
  176. They changed the name to Velocity in June 2013, which hurt a little, but it wasn\u2019t my baby anymore<\/li>
  177. I probably did myself and the company a disservice by not insisting I at least stay involved in product \u2014 the truth is, the core platform hasn\u2019t really changed much since I left; in fact it looks nearly identical to the UX I originally implemented back in 2007<\/li>
  178. But Nick did grow the company to a near $50 million annualized run rate, and positioned it well to finally be acquired on by Ellie Mae on August 31, 2017 for $128 million<\/li>
  179. Incidentally, I originally forged our relationship with Ellie Mae back in 2008 or 2009 when more and more of our clients were migrating to their platform from Calyx Point<\/li>
  180. On more than one occasion while I was still at the company I discussed selling to them with then COO Jonathan Core, now CEO and who Nick brokered the deal with<\/li>
  181. So today, I sent in my stock certificate and received my wire for the sale, along with Charles and Tony we retained more than 20% of the company<\/li>
  182. It\u2019s a success story for me far beyond the millions of dollars I made \u2014 it\u2019s a proof point, validator and feather in my cap as it is for many others who were part of this journey<\/li>
  183. Thanks for the memories ya\u2019ll<\/li><\/ol>\n\n\n\n

    What I Learned in a Nutshell<\/strong><\/h2>\n\n\n\n

    Like just about every human being on this planet, I have an ego. And like everyone else my ego can be a weapon as much as a curse. Most people would agree it\u2019s important to keep your ego in check, but not everyone might appreciate the need to let it puff up when the time is right. <\/p>\n\n\n\n

    Building Leads360\/Velocify I probably kept my ego a little too in check sometimes and held back sometimes when I knew I should have spoken up. Seeing that now is important for me, not just in how I proceed along my not nearly over career path, but in my personal life. To find a balance between listening to the heart songs of those around me and shouting out my song when I know it\u2019s appropriate is an opportunity for me to be a better person, a more effective leader, an even better friend, a loving and encouraging father and a purposeful contributor to society.<\/p>\n\n\n\n

    Not everyone who starts companies will have the same experience as I have. Some will sell companies for billions. Others will go belly up. Some will learn what they are really meant to do while others will keep doing what they think they should do but aren\u2019t really designed for. Some will let their ego get the best of them. Some will ignore their ego to the point of failure. But for me, the experience was exactly what I needed exactly at the time I needed it. <\/p>\n\n\n\n

    I\u2019ll have more success in my life, financially and impactfully (this isn\u2019t a word but it should be). But more importantly I\u2019ve learned lessons, made friends, created wealth for countless people, directly and indirectly improved the performance of thousands of businesses, had a ton of fun and may not have changed the world, but I had an effect on the trajectory of it. And even though not everyone will appreciate or might disagree with my story altogether, I know what I did and I\u2019m eternally grateful for the ride so far.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Here’s the story from startup crash and burn to $128 million exit in a step by step bullet point format.<\/p>\n","protected":false},"author":1,"featured_media":166,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[12],"tags":[8],"class_list":["post-157","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stories","tag-startups"],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/bak.me\/blog\/wp-content\/uploads\/2021\/01\/true_startup_stories.jpg?fit=1920%2C1080&ssl=1","jetpack-related-posts":[{"id":199,"url":"https:\/\/bak.me\/blog\/startup-tip-product-market-fit\/","url_meta":{"origin":157,"position":0},"title":"Startup Tips #2 – What Is Product-Market Fit","author":"Jeff Solomon","date":"March 6, 2021","format":false,"excerpt":"Using customer development to maximize startup success. 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