How do you raise $16M if you think fundraising is a waste of time?

welcome to episode 33 of fundraising demystified today we have Tyler dank on the show co-founder and CEO of beehive the popular newsletter platform that has raised over 16 million in financing and has passed 7 million in ARR Tyler shares his story about being a self-taught engineer his experience at morning Brew before joining Google to then launch beehive to build the tools he wish he had at morning Brew to help other creators scale their newsletters he shares how he felt fundraising was a waste of time and how he wanted to focus on growing his business and shipping product thus he was forced to run a tight and short process to get the capital he needed when he needed it Tyler's story is unique and inspiring as he chooses to build in public as a reminder please subscribe to receive our Weekly Newsletter and our weekly podcast at join. thunder. BC again join us and subscribe at join . thunder. BC now on to the show hey everyone welcome back to fundraising demystified today we have Tyler Denon in the show with us today founder and CEO of beehive welcome to the show Tyler yo what's up glad to be here I'm excited to bring you on uh your products been making a lot of buzz you know got gota use the pun in there uh in the industry of kind of the Creator economy and whatnot uh I'm you know personally a fan of the product not many other creators are using the product um but excited to have you on the show and and share your story so if you could just go ahead and Jump Right In and tell us a little bit about you and what led you to starting beehive yeah for sure I'll try to keep it fairly brief I grew up in Baltimore Maryland went to University of Maryland for engineering did mechanical engineering in school and was really involved with like the startup and Entrepreneurship programs there and we had me and a few friends had an idea for a mobile application no way of building building it and taught ourselves how to code which was like my first foray into you know on my own time outside of the classroom studying a new skill that was extremely challenging and entirely new to me so my friends and I taught ourselves how to code we built an application and a website to help startups and entrepreneurs connect to software developers on the same campus so kind of solving like our initial problem uh never went on to be a multi-billion dollar company but taught me an incredible out about one just teaching yourself new skills the analogy of very much building the plane while you're flying it every day we were doing something different from coding a new feature to onboarding a new user to trying to acquire new users with basically no budget a lot of frugality built into how as a student with very little money do you scale a platform um without being able to invest in traditional paid acquisition channels so we wrote blog content we were on medium we were on or uh like the most growth hacky thing you could possibly do to scale a startup with $0 is basically what we were attempting to do um basically spent all my sophomore junior senior year building that company and ultimately like very difficult problem to solve from like a business model perspective uh eventually ended up shutting that down right after I graduated um from there I was just kind of networking looking for different opportunities very weird background in the sense that I was a mechanical engineer by degree but never did a mechanical engineering uh uh what do you call them internship or yeah no internship no work experience in mechanical engineering I spent all of my Summers building my startup but I also didn't have the formal training of a software engineer because I was self-taught and like everything I did was me building my own features on my own platform so I was kind of in this really awkward no man plan of not having work experience but not having interests and there was kind of completely conflicting with each other based on mechanical and like software um so ended up just freelancing building a bunch of different websites for different people while applying for jobs and one of my good friends growing up Austin Reef was the co-founder of morning brew and at the time we just got caught up he's he shares a lot of like the different passions and excitement of building a business that I do and we would just nerd for hours in terms of different business strategies growth strategies trajectory of different companies and he basically brought me on on contract initially to start building the referral program the website different email Integrations and stuff for morning brille who at the time had no software engineer or anyone building Tech stuff so I spent the summer after I graduated building a lot of tech for morning Brew eventually that led to me working 50 60 hours a week on contract to which they're like why don't you just join us full time moved up to New York spent three and a half years at morning Brew which was an incredible experience experience I was 22 23 years old got to basically call the shots in terms of this is what I think we should build this is where I'm spending the next two months building X feature y feature whatever could do to help us grow or monetize better um and then fast forward a bit from there morning Brew got acquired by Business Insider in 2020 um and I left like honestly just a week or two before then so got to see morning brew from three people when I first joined up to 354 40 people when they got acquired by Business Insider so wasn't technically a co-founder but there super early to kind of make a lot of those key decisions and and see what it's like to scale a startup yeah and that ultimately leading you to you know take what you did for one very successful newsletter and being able to create that you know for you know thousands of other you know newsletter creators so I guess kind of walk us through you know kind of the early days of launching beehive and and how you structured it and set it up yeah I realized I said I keep the story short and then I more detailed story so I actually ended up skimping a bit in terms of like the morning Brew experience but in the whole like build vers by the baate in terms of where you're investing time and money at morning Brew part of it was because I was so inexperienced being 23 years old part of it was just being very stubborn where I was like why would we pay for X when we could just build it ourselves and we being me essentially and like I also like the challenge of building these new platform forms in Tech so at morning Brew we built our own content management system that the writers would use we built our own referral program we built our own ad management platform that the sales and copywriting team would use to monetize the newsletter and then we built a lot of custom dashboards of where are we growing how are we growing how can we optimize growth where can we get a better Roi so I say all of that because it wasn't like I was just plugged into a marketing or engineering role and we were using off-the-shelf software and kind of piec it together to help morning breu scale into a large successful newsletter we were as deep in the weeds as possible trying to figure out where could we get an extra 10% of Roi what Platforms in Tech do we need what do our writers want for their newsletter and that led to me like very much literally building the software to facilitate all of that so when you fast forward to when I left morning Brew morning Brew got acquired by for a large sum they're one of the most popular email newsletters in the world and tons of other Publishers content creators would reach out to us asking how do you grow your newsletter how do you scale how do you monetize and these were things that were fairly unique to us in some aspects because we built custom solution for them and a lot of those times we being me like I was the one who was creating the code to build these different platforms obviously I scaled a talented engineering team there as well so when we went to when I was at Google uh just kind of evaluated like what I what to build next and there was like a huge opportunity whether it was suzack who just raised $65 million at a huge valuation back in 2020 2021 um or just the fact that the hustle just got acquired axios was growing in popularity there's like a huge wave of interest in email newsletters and then again morning Brew kind of being like that gold star of what everyone looked to in terms of growth and style and design and website so that really what led to beehive it was how do we take everything that we have learned about the nuances of scaling and building an email newsletter and make it so simple for anyone whether you are a large publisher or a hobbyist who wants to write about sports where you can onboard on to a platform and have everything from the website content creation growth channels growth dashboards monetization basically Built For You Best in Class um and basically abstract a lot of the very technical things that we had to kind of figure out on our own at morning Grill and I do want to kind of St back like so one kind of little piece we missed here was the transition from be I mean uh from morning Brew to Google then to uh you know beehive I guess what made you go to to Google did you kind of see morning Brew selling and you were like kind of up and out like what was that transition about yeah so when I joined morning Brew again we were three people tons of of white space in terms of I could wake up and kind of decide where I think my time was best spent the founders are incredible both Alex and auson believed in me trusted me to make those types of decisions and said if you think spending the next two weeks building X is the best use of your time and best for the business then go ahead and do that and so my first like two and a half three years at morning Brew were almost like an entrepreneur in terms of coming up with initiatives tasks priorities and really being able to build things that fortunately worked out in our face faor and we're more often than not the right call and and and what to build as like I was there three three and a half years you know we grew to 35 people we started to more legitimize the business by bringing in people from other companies other PMS other heads of product like I could kind of see the writing on the wall that we were transitioning from really fun Wild West startup to more of a legitimate business where I would have less control over what I was building what we are prioritizing or even just impact so lot of like we had nothing at the beginning more or less to oversimplify and we built a lot of the foundational stuff now that the foundation was built it was a lot of optimizing the website and making smaller tweaks that just felt less exciting and impactful for me personally so after three and a half years just from like a career trajectory I took the approach of I saw from three employees to 35 employees wouldn't it be really interesting to see what a massive tech company does at scale because that I have no concept of how that works why it works what processes they have and again I think there's like a bit of insecurity of I'm a self-taught software developer so I've never had like formal training um I didn't even know what product was until like a year into the job at morning Brew I didn't understand how product tie is in marketing and growth and Engineering under one umbrella so Google being a place that's known for product management just from like a career traj and personal development I saw it as an opportunity to learn best-in-class practices of how to build a product requirement document how does a product team interact with the engineering team and the marketing team and the growth team so that was kind of my transition from I've seen small let me see what big looks like and make the jump there and then I worked on like the You music team which like I'm a huge fan of music so there was like an interest level and like legitimacy of like a Resume Builder and like a personal development angle so that's kind of like where my head was was that in terms of like the transition to Google it's a little bit about yeah as a stamp of approval from coming from that you know kind of feeling insecure about selftaught and then getting the validation of you know the largest you know employer of top talent uh you know being able to to recruit you which then I imagine was maybe a catalyst for going out and doing beehive and raising Capital having that track record of kind of successful startup early day experience of kind of that hacker mindset of Build and Grow to then having the credit ability of a Google you know stamp of approval uh to then going out raising uh some Capital so I guess walk us through kind of the the early days of beehive when you make that leap of faith from you know Google to to launch in the company and how you secured your initial uh roundout of funding yeah for sure and also like I I wasn't lying to myself like I kind of knew I was never going to love Google I like love having autonomy I love moving quickly I hate bureaucracy I kind of knew that a large company like Google wasn't going to be be a home for me but it was kind of like refreshing my skills learning new things understanding how how it's done at a different level and scale um but yeah so I the idea for beehive happened even before I even joined Google I had a week off in between work between leaving morning brew and starting Google and that's like kind of the Inception of I kind of know what I want to do here so how do we build it I approached my one of the first people or the first person I ever hired at morning Brew which is a software engineer Nate um he's my co-founder at beehive he was like hey we should also talk to Jake who was another who's my other co-founder so Ben and Jake are my two co-founders both software Engineers that I had hired at morning brew and so they also saw like how the sausage was made essentially in terms of they were building the tech and the platforms and facilitating a lot of the growth and success at morning Brew just as they knew just as much as anyone else in terms of like the tech required to build it and so basically while I was working at gole Google full-time I would spend nights and weekends kind of hacking along with my two co-founders building out the platform so we had a notion doc we're mapping out every feature that's like a p zero we can't launch before this feature exists while also like what are we going to build in the future super fun super ambiguous super everyone's just coding and hacking There's No Business Development to be done there's no marketing there's no HR it's just like pure like three Engineers building a platform and so that was an extremely fun and exciting time to be working on that um basically we did that up until the point where we had a kind of functional MVP in which I then tweeted out this is what I've been working on it is X but better it takes all of my experience of what I had learned at morning brew and basically democratizes that type of capability for any newsletter to plug into and then by clicking through on that link on Twitter and Linkedin you could fill out a form basically submitting information of name email what platform you're using now the type of newsletter you run how large a newsletter so it was pure just like demand gen and like kind of testing the waters of like is there an appetite for this and if how big is that appetite and there was also kind of like our pre-launch list essentially so I tweeted that out I'd say summer of 2021 got like 450 people to submit that and I mean I didn't have a big still don't have a huge audience on any platform but I didn't have a big audience whatsoever got about 450 people to submit information that they were interested in what we were building so the combination of having a semif functional MVP with an intent and interest of these 450 people that was kind of the basis of our fundraising so we were all still working full-time they were both at morning Brew I was at Google we went out and I spent a month it was July 2021 talking to every potential seed investor about what we were building I guess to set the narrative substack again just raised 65 million they were the clear market leader of like this new age newsletter platform newsletter wave like they were owning that Twitter just bought review so and Facebook just alongs bulletin neither of those exists anymore I don't remember Facebook bulletin but but it was basically saying like yes there's like the incumbent MailChimp active campaign campaign mon like there's ton it's a very very competitive space there is suback who is like the new market leader coming in and like basically trying to do a lot of what we are trying to do but they have a four-year Head Start and just raised 65 million and then we have big Tech and Facebook and Twitter getting into the space as well I think that context is required because like it made raising like why would anybody bet on us knowing what you know about the competition who else is involved and how difficult of a space it is to get into not to mention this is like height of crypto and the beginning of AI like email just sounds like such a distant technological thing to invest in um but yeah so we we basically spent or I spent all of July 2021 leading a seat fundraise um where basically yeah that was the pitch it was we have done this at morning Brew we are three Engineers obviously like as you mentioned we have the sample of approval of they're still at morning Brew I was at Google so someone thinks I'm smart someone Google outside of my morning Brew experience we've been there we've done that we have a working MVP and we have 450 people that are interested in signing up who knows what the conversion rate would be but there's some level of interest and that really was the foundation of us going out and raising a seed round did you know that most Founders waste days of their lives chasing the wrong investors well as a Founder you know your time is your most valuable resource don't waste it on the investors that aren't going to write you a check here at Thunder we built a free tool that identifies exactly which VCS are worth your time to pursue we score your company against 3500 VCS and family offices that have been vetted and are actively writing checks into companies like yours get your AI recommended list of investors that will look like this absolutely free by creating a free profile at thunder. 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VC now let's get back to the show you do check a lot of boxes and I could see it being you know not a perfectly smooth fundraising process but that that's an important attributes they going to have early in any kind of capital raise is you know you kind of did it like now you're doing it to you know be an independent business and scale to many others so yeah how much did you end up raising in that initial round yeah it's funny because I just pulled up our initial seed deck and I feel like a classic mistake that everyone makes is I don't know you have zero dollars to start you've been scrapping by and you're kind of like oh a million would last us so long so like our initial C deck had like 1.3 million as the target which I'm sure I did some sort of random calculation and model and that will last us x amount of time assuming these things we ended up raising 2.6 million um led by social leverage we did like a a pretty long taale of just like anyone who was in my Network that has a newsletter has an audience interested in media they kind of like our early adopters that I kind of viewed the seed round as like a launching pad of who's going to be our first user so we have the 450 people that submitted this form and then we also have here's 15 investors who gave us money they are very much incentivized to help us succeed and they strategically like I approach them because they have a large newsletter on another platform so it's kind of like you gave us money we need some early adopters someone needs to take the risk on using our platform you are financially incentivized to help us grow so it would mean a lot as like a proof of concept and case study to have you move from XYZ platform to us so we actually use a c round really for like early adopters as well um but yeah that's how much we raise and the Very classic everyone raises less than what they think they need um was very true so again like I've never run like payroll or like worked with benefits or like there's just so many things that pop up where you're building something one day and you realized like hey you have a vulnerability for whatever for security but this software solution you didn't even know existed but actually solve it now you just added $10,000 a year into your cost that you weren't anticipating multiply that times you know the dozens of other times that that happens or just thinking about when you make that first hire with someone who has a wife and a kid and you're paying their health insurance like it's one thing to say average salary is X it's another to try to calculate the 401K match and the health insurance and the dental insurance um so my biggest takeaway from every single time I've raised is it's never been enough and it's not even that we are recklessly spending and we miscalculate it it's that there are so many expens that you don't anticipate that come up that are larger than you expect um so yeah we raised 2.6 million we would have failed in a month if we only raised 1.3 million like I initially thought no it's good you know it's a good problem to have you know you double you over subscribe by 2x from what you anticipated but it was smart for you to keep that round open a lot of Founders made the mistake of getting concerned about dilution and don't take that capital and then constrain themselves from hitting you know their next milestones and growth targets so uh definitely sound like worked out in your favor so all right you get the 2.6 mil you're you're Off to the Races you're growing but you raised subsequent round since so how much did you raise in the the next round and kind of what was that time between the two and kind of what what did you do to kind of set up for that next round yeah I I'd say real quick just to go back to the seed round what was super frustrating that I'm sure most firsttime Founders or anyone raising money can relate to is no one wants to put money in first no one wants to be the person who writes that first check especially because usually you go like for like the anchor of the round like who's going to write the biggest check first essentially and so I mean I complained and all in all I think the process took five weeks for us to raise our 2.6 million so relatively speaking and relative to like other Founders I've spoken to not a totally drawn out process but incredibly infuriating where in all day every day your own calls you're repeating yourself you're making progress it seems like there's a lot of interest but no one wants to write the first check and so I'll never forget the change in tone and pace of the fund raise from trying to convince that first fund to write a million $1.5 million check that everyone was interested but no one wanted to write it and the second that social leverage said that they're in for 1.5 or like whatever the terms were I would go to every other person we talked to saying we already have the 1.5 and now that there's limited space remaining they were very very quick to commit and write checks and wire money so it really is it's like the human nature of no one wants to be first per se and no one wants to be wrong but as soon as there's the validation of another fund that they recognize who puts in money or there's like some bit of scarcity worked into the process they don't want to miss out so fomo scarcity everything and they were very quick to want to write checks it was very easy to get the last 500 750k like in the matter of like a few emails but very difficult to get the first large commit um so it's just funny reliving that experience but yeah so we raised the 2.6 that wrapped up I think September of 2021 the second the money hit the bank uh quitter jobs went all in so like kind of like der risk a lot too like we weren't living on like the classic Ramen diet like we need to raise money because we aren't feeding our families which I mean I didn't have a family still though um but like we made sure that we had salaries ready to go we could pay our vendors before like going all in on the idea so very deep risk money hits the bank we launch we go full-time September we launch in November and not rocket ship but like pretty early traction I think there was like a clear our hypothesis was validated pretty early on that what we were building there was a void in the market for the type of solution we were building there were people who looked up the morning brew and like we leaned into that credibility a ton in the early days a little bit less now but still do that is like we're we're like a new entrance into the market and the fact that we aren't just building SAS to build SAS we're building from years of experience of building an actual newsletter at a very successful well-known newsletter company I think speaks volumes in terms of like why we are approaching the product decisions we are and why we are building the company the way that we are and so we leaned on that and I'd say maybe by March April we had $10,000 in Revenue a month and so what four or five months ago I mean the zero to 10 thou the zero to anything is always the hardest even just getting people that were on like a free trial just beta test and giving us feedback to then flip the switch one day and say hey can you actually start paying us $100 a month was like a difficult thing to do so we got about like $10,000 a monthly Revenue I'd say four or five months in um to which point I made the realization like we did not raise nearly enough money if we want to hire four or five more Engineers we're very engineering Focus Focus company and Engineers are expensive and our core team my co-founders are so smart and so talented like they don't want to work with B+ players they want they want a players and a players are expensive um so I'd say around may we made the decision like oh we need to do like an extension type of round and I thought it was going to be the easiest thing ever we we went on and did the hard part of convincing people to give us $2.6 million with zero traction zero product zero Revenue now fast forward five months we're not drisk but we have clear product Market fit revenue is growing 30 40% month over month albe it's small but still growing relatively pretty quickly the product is very quickly getting to compete with huge incumbents in the space and our team is scaling we've we've proven we can go from zero to 10,000 we just need more money so we can hire six more engineers in a growth person and I thought the narrative and story was so easy to tell that we would be in and out of the market of fundraising in like two to three weeks um I was wrong about that one it was like kind of like the 2022 there's like a huge like I don't even know what the word is but the funding dried up pretty much across the board for everyone right at the time that we entered the market to try the fund raise and so that was probably the most frustrating fund raise I'd say um because one I thought for we weren't raising an absurd valuation we weren't raising $15 million we ended up doing 1.6 million on a safe for 20 million valuation or valuation cap but that 1.6 million took 3 months two and a half months after I felt that we already had product Market fit and had proven a lot so maybe it was just the the difference in perception of where I thought we were and how the market would receive it versus how they actually received it but that was an extremely frustrating fundraise well I could imagine because you know what you raised pre-product pre quitting your job was partly due you know the market was just a completely different Market in 2021 you raised that in the peak of Market when everything was hot and it was easy to throw money around and then come mid 2022 into 2022 is that market had completely fallen off a cliff and things were a lot more straighten it I would say you got away with actually a pretty good situation in 2022 given the the traction and whatnot because I saw a lot of the other companies you know growing faster later stage kind of stuff and you know barely able to get what they need if not at all or just being told to tighten their budgets and extend Runway so it's it's still pretty impressive that you pull it off in that market with those those numbers but um so that being a little bit more difficult a little bit harder but uh you guys obviously raise substantially more thereafter and uh it seems like you really hit some some velocity since so maybe you can share a little bit about where you guys are at now and kind of your my recent Capital race yeah I'd say part of our success raising in general is like one I've kind of Taken on like a build in public Persona where I share and I'm very transparent with here's our Mr Number like for example last week we just hit 7 million AR so posts about it on Twitter LinkedIn it's great for potential employees who are looking at new opportunities and seeing this company doing well it's great for validation of potential users to see like hey now that this company's making a lot of money they seem more legit I don't think they're going to go out of business um also great for investors right so investors see these Milestones if they follow me or have seen me on Twitter or Linked In they see that we went from one to two to three relatively quickly and they can kind of Follow The Journey and so where I think a lot of Founders spend a lot of time is like nurturing their relationship and doing all of these calls to kind of like convince investors why they should take an interest I never do that I think it's a total waste of time I think the numbers kind of speak for themselves I am very transparent about who we're hiring what milestones we hit what features we launched and any VC who's going to do their diligence and take the time to find Opportunities and follow me get to see everything on full display so that I that's kind of preceding my answer of we're very open about a lot of our metrics which helps a lot I also send and it's my number one piece of advice is I send a monthly investor update to every investor friends family colleagues employees with a very very detailed granular look of what's working what's not working what Milestones we're hitting what we built what we're going to build where we're investing and that does more than just like hit the milestones it really is like a look inside of my brain of like how I'm thinking about the business how it's progressing and anyone who's followed from day one to now has seen like the total evolution of where we've invested what bets we've made and seen that most of the bets that we have made have paid off and so for that extension round that I just mentioned that actually came from an internal investor I like stubbornly wanted net new money to come in because for me it's a network game if we can tap into a new investor that's a whole new network with new relationships and whatever that we now have access to and PE more net new people with the invested interest in US succeeding our current investors I had a feeling would want to invest because they've seen the progress but it's not new networks or relationship so I was kind of stubborn in not wanting that but after going through the process of basically everyone saying no one of our internal investors reached out and was like look I've seen what you've done you're one of the most exciting companies in my portfolio I'll leave this extension round shout out Sasha from Creator Ventures because obviously saved me a ton of like I I hated raising money during this process anyway so I preface all that with that is how we raise that round we continue to do the monthly investor updates we now have a little bit more money we're investing in engineering our product is getting better and better every single week we're growing faster everything's accelerating and again anyone who is on our investor update list has seen this month-to month with like real numbers real details real strategy um and as you build in public a lot of it comes in bound so over the next year between when we raised our extension and when we raised our series a in 20203 um a lot of it is aot I mean I still get about a dozen emails a day from all sorts of funds asking for calls and relationship building and whatever which I usually ignore and then there's a lot of introductions that come in from Twitter and Linkedin and while I do ignore 95% of them one of the partn at light speed tricked me which was really smart and saying do you want to I'm organizing some founder dinner situation in La for La Founders and startups and whatever do you want to come and I typically live in LA I sit in my room 14 hours a day by myself working is like usually my Monday through Friday and every now and then if you catch me at the right time it's nice to say like I would like to meet some other Founders and get out of my room for a little bit so he tricked me I responded yeah I'm down and he goes what if we meet for coffee before um and I was like God damn it like this is exactly what I didn't want to do but I do want to go to this dinner the day before so this is farz which is a partner at lights speed the day before like I don't really feel like going to coffee with this guy so I bail I tell him was this do like a zoom call we chat for 30 minutes and I say I'll just toss you on our investor update it'll answer all your questions you'll see the progress um so that was like the relationship building or the 30 minute call that's a big way of relationship building and so that was that and then fast forward to I'd say like March March May of uh 2023 it just became abundantly clear that yes I love running lean I don't want to continue to raise money dilute like there's a lot of things that get involved with like continuing to go from series a to series B to series C but then I kind of like saw the writing on the wall and I said we're so lean on engineering we have we're under staffed and support I'm answering support tickets to till midnight every single night where my time could be spent doing literally anything else strategic or even sleeping so I can get up more refreshed and like be more performing throughout the day and I spent some time one Friday night just writing if we had $10 million what would we do with that money and I wrote out the 12 to 15 hires we would make where would we ramp up budget what types of platforms and software we would invest in I slept on it I read it and I said I'm an idiot to do anything but that that is clearly the path of least resistance that one makes my life better makes everyone on our team's life better because we're adding more bandwidth and it just puts us in much more competitive position to compete with other players who are coming at our throats with a lot more money a lot more experience and a lot more bandwidth and it was the first time I ever felt vulnerable from a cash perspective where a lot of our competitors were offering huge like $10,000 plus like guarantees to move over and it got to the point where I was like we're actually just vulnerable we're I think we have better people on our team and a better product but they have so much more cash than us that we're just not able to compete at that level and they could have accelerated that more and didn't so I reached out to farz and a few other funds and basically all the ones that I've been ignoring for months I took my favorite three or four who would always follow up with like pretty thoughtful feedback on each of my investor updates and said I'm not totally in for a series a but I'm interested in what it would potentially look like and the exercise was basically I'm not going to say yes to anything unless we like the terms we like the team we like the process but there's no harm done in at least going through the process to get feedback to see what terms would look like and start to play out the models and scenarios of if we didn't pursue it that was a Saturday morning we got two term sheets the following Friday it's like very accelerated schedule um yeah and one of them was obviously light speed we liked their team we liked their Vibe we lik the way that they thought about things they were genuinely extremely excited about the business like more than I was excited like they saw the opportunity of what this could be and it showed on every single call um so we ended up going with them and that was the 12 and a half million series a that we raised from light speed that is a fascinating story of just how you mentally focused more so on the business but you kept your process you kept your system of just investor updates and then you got to basically choose who you who you went and allowed in but that's mainly because you ran a great business you what was what was your Revenue uh back when you were raising this as was like June of last year I think yeah I want to say maybe right when we made the announcement it was like six or S million run rate so I think we're about like5 $600,000 a month in Revenue killer um so like definitely growing but I I don't like ignore these calls because I'm a total douche I I like one I've realized like time is the most valuable thing it's why we do Tuesday Thursday Focus days like I generally kind of hate meetings not that I hate people it's just there's so much to do yeah and I'm the type of person that feels most productive when I have my 10 things to do and I get them done and a lot of times adding meetings and talking doesn't accomplish all that much and so for me like a lot of the investors like to pitch the like let's build a relationship so maybe in the future if I take interest in your business we have that line of communication and the way that I view it is if I go heads down and focus on what's most important for me in the business we don't need to have this call you'll be interested one way or another me taking the hour to talk to you is actually probably making you less interested because rather than investing in better growth strategies or product development I'm talking to you for no reason if you go heads down focus on what you need to do and build the business the investors will come but if you spend so much time building these relationships instead of building the business then you have great relationships and no business and revenue in traction to show for it um so that's kind of like the philosophy that I've always taken with it I love that I love the the fact that you had such a clear cost benefit analysis on the investment of your time in your Capital raise but again you focus on building a great business you hit growth targets investors will come to you and is that didn't seem to be a problem for you guys so so great allocation uh in terms of your time so appreciate kind of sharing that and sharing that Journey um you kind of going now like all right so you got the money now it's in you know growth mode you just announced that you're now at 7 million dollar run rate so continuing to pick up growth and and momentum um something that I I just want to call out and I respect is you're using your own product for your own newsletter uh so I think you know just kind of dog footing your own product I think is a something that if you have the ability as a Founder it's It's A wise choice to to do but I guess I share a little bit more about where the business is at today and kind of where you see it uh where where you see it going yeah so I guess to continue with the storyline of where we are we raise in June is when the round closes we're doing about like a $7 million run rate which not going to do Math on the Spot probably like5 $600,000 a month basically in Revenue um from there we invest in the things we said we would right so we were weak on support support cues were long we beefed up support we hired three or four more Engineers we felt through every worst case scenario like where could this business fail and why would it fail is it scaling issues let's hire a data infrastructure engineer let's invest some better software so we kind of like went through an exercise of how do we drisk the business and who do we invest in higher to make us scale quicker and also drisk the worst case scenario of the business we hired a ton Q3 Q we doubled the team from I think we were 1819 when we raised the round and we ended Q3 at 40 end of the year at 50 so it went from you know ending starting Q3 with less than 20 people ending the year with 50 people so more than doubled in half the year which is super stressful and you find a bunch of then your problems become less like scaling and Tech in product and it's people um which is like always for me building a business the harder part again not because I I dislike people like I love working with people but everyone has their own trajectory their own wants their own needs their own expectations their own excuses and Egos and everything else and be able to build a team that is fully bought in that works well with each other that can scale where everyone has like an equal opportunity to build new skills and upscale themselves and continue on their career trajectory it's like very difficult and then also just like interviewing itself when you're interviewing for 20 plus roles it's very very time consuming especially as someone who I've already hinted that I hate spending time in meetings especially when four fists of the meetings are with people who you're not even going to end up hiring so it's a lot of time and effort um so gross spurts there and then also just process-wise what works at 15 people is very different than what works at 50 people and the assumptions that I used to have of everyone knows how everything works and everyone knows what everyone else in the business is doing breaks down very quickly when you more than double the team in a quarter no one knows anything they don't know where anything is they don't know what anyone does they don't know where anyone's located they don't know why things are the way they are so you have to be especially as a remote company you have to be very intentional about knowledge sharing so that became like a huge focus of Q4 for us um but yeah I mean to catch us up to where we are now so we're in q1 we doing roughly a million in Revenue a month about 80 to 90% of that is SAS Revenue so monthly and annual recurring SAS Revenue we have an ad Network where we are basically taking advertisers who want to get in front of these Niche newsletter audiences we have a ton of newsletters who have engaged audiences but they don't have a sales team they don't have any means of getting premium advertisers in their newsletter um we connect it to and then we take like a small margin on top of that so the ad business is like one of the big bets that we're making and always have the difference there is that was our bet day one and so we built the platform with that with that in mind from the very beginning we knew we were going to build an ad Network the data we were collecting the way that the systems were built knew the ad network was coming even though we didn't touch it for the first 18 to 20 months um because you kind of need the foundation you need the users you need the Impressions before a single Advertiser would even look at you but now it is rewarding in the sense that was a huge bet it's why most investors passed they were like this is very ambitious we don't it hasn't been done and we don't think it can be done um and now we're at a point where our SAS revenu is approaching a million dollars a month our ad Revenue we just did 500k in ad sales in December alone so ad revenue and AD sales is Top Line our revenue is like a portion of that but still like the fact that there's an appetite there of 500k of advertisers and that's all inbound we don't do outbound yet um so the proof of concept is is there the platform is working we have Boost which is a tertiary Revenue stream it's like a two-sided Marketplace for people looking to grow their newsletter and people looking to monetize their newsletter and they work symbiotically together um that's about to be a million-dollar business in terms of Revenue by itself as our tertiary Revenue stream so there's a lot and the way that I kind of frame it and I just said it to our team earlier is you've seen like the MailChimp acquisition of1 billion like a a very successful well functioning email platform is can be massively successful and profitable you've look at live intent and power inbox which are like programmatic ads and email they're both billion dollar businesses also extremely profitable very hard to build both those businesses are incredibly hard to build and we're trying to do both together at the same time so while we're building the scalable ad Network and doing ad sales and placements and Impressions and like fraud detection we also need to make sure that the editor works great and that automations work and that the emails are going out so there's so many levels of complexity um and so many features and functions going on at all times but that's also what makes it super fun uh so that's kind of where we are now yeah and and just to kind of give you another compliment as I talk to other Founders or other creators that talk about you know because I'm looking at switching to bive you know full disclosure uh mainly because you keep everything in house and how quickly you and I think that's a testament to your your team and your your leadership is how much you ship how shiply how quickly you ship and and being as you kind of said in the very early part of this conversation of how you're very engineering focused team product Le team uh is often what a lot of ECS and investors want to see in companies is how quickly can you bring product Market how quickly can you iterate and improve and take customer feedback the fact that you were listening or sorry not listening responding and doing customer support tickets up until you know raising a larger round uh is a clear tail sign of how you have your kind of finger on the polls uh of your business and your customers uh so you know it's phenomenal story it makes perfect sense as to how you raised your money and why you raised your money and how much you raised to this point and I'm looking forward to kind of following your journey at this point uh I'd love for you to kind of um kind of share any kind of final tip is if you like the the founders or VCS listening to to this any kind of parting advice uh when it comes to to growing and scaling a startup yeah well I have to seamlessly plug my newsletter big desk energy because I share all of my thoughts there pretty unfiltered so biges energy.com actually it's mail. biges energy.com um but like I'm basically sharing all the strategies thoughts things that I think about throughout building the business and a pretty open Forum through the newsletter and so I bring that up because there's two things I've shared recently one is just building in public and I've already hinted at that a bit in this conversation but unless you're doing something so proprietary or there's like a real reason why you believe that there's a disadvantage to sharing that type of information I'm a huge proponent of people interested in startups I think it's a pretty large Market people like to follow stories narratives people and if you can add insights and learnings through your journey so they don't make those same mistakes so they can learn from you that is like how I have amassed my following on whatever platform granted not that huge but it's still like I think being able to create content about the business does a lot of different things it gives you a lot of authority it has people follow you but now a lot of people have a vested interest in your succcess or failure or your business in general and so building public I found I never like set out to do that super intentionally it just kind of happened because I get super excited about things and just want to share them um but that has been a huge unlock for the business and then the other thing that I hinted at is like the investor updates whether it leads to raising a series a in six days or it's just an incredible exercise of getting all of your thoughts in your head built up over the month onto paper so you can align investors employees friends family I think there's I get so much value out of spending five hours one weekend of writing those investor updates that even if I didn't have investors I would still like the exercise of doing that and I already painted the pool case of how quickly you can just instead of nurturing the relationships and spending hours on calls you can add an investor VC a colleague an advisor onto your email list and they get their entire download of how you're thinking about the business what Milestones you're hitting those have been the two biggest chodes for me outside of just like the execution of the business but something that anyone can do in in in the industry and it's kind of like a accountability buddy at scale like you're holding yourself accountable to deliver on that promise of those consistent updates and you want those updates to look good so you're going to push yourself to hit numbers hit metrics and and make sure it's a good narrative uh because otherwise you do it and it doesn't look good then you're like why then it comes like a you the opposite of a self-fulfilling prophecy in terms of you diminishing your ability to to execute so it's a it's something I've seen consecutively with Founders that build them up like is that kind of accountability to deliver and that fire that kind of gets lit in them to to make sure they deliver on that so really appreciate you you sharing your story your insights um what's the best way for for people to learn more about you and uh where to find you so we got big desk energy but uh where else can they find you on should definitely listen to the playlist uh yeah I'm probably most active on Twitter so dank Deen Kore tweets dank tweets on Twitter um the be the Beehive account we have like an incredible social team if you are remotely interested in content newsletters Creator economy business building we are pumping out incredibly valuable tutorials content shoutouts all day long so beehive spelled incorrectly beeh i i v on Instagram or Twitter and then Tyler dank danor tweets on Twitter awesome well Tyler it's been an Abol pleasure having you on the show thank you for sharing your insights and I look forward to learning more about your journey and being subscribed to your updates oh yeah appreciate it thanks for having me awesome thanks for listening to the show today we hope you learned something valuable and if you did be sure to let us know in the comments or by hitting that like button and if you're a Founder looking to raise Capital then join us at Thunder . VC we provide a free tool to help you identify which VC family offices or lenders are the best fit for you using ra AI it will save you a ton of time from chasing the wrong investors and since launching our free tools Founders that have joined our Network have gone on to raise over $1 billion in financing again you can find these free tools at thunder. VC and as a reminder we release new episodes every week so stay informed by subscribing to our newsletter at join. thunder. BC again that's join. thunder. BC and if you or someone you know has recently raised around and want to share your story please email me at Jason thunder. VC and that's our show we hope you enjoyed it and we see you next week