John Estafanous is leading RallyBright, the second company he's founded, raising investor capital for the first time as he looks to accelerate the company's growth.
"I started pretty much self-funded with a very small friends and family round," Estafanous says. "I knew that what we needed to build needed to be scalable and robust and needed to play legitimately within the enterprise. So, that requires significant development effort, that requires a lot of time and customer research. My initial thought was, don't go out and try to raise a lot of money, raise enough money or invest enough money and time on my own so that way we could build something that was foundational. And then it was all about the customers. From day one it was all about the customers. Who can test this? Who can use this? What feedback can we get? How can we optimize those? How do we message this to the market? Who are our ideal customers? What are the best ways to reach them? Knowing that if you can build a tool that has people ready to pay for it, and if those are people at great organizations that are aspirational, then you have the ability to scale something pretty significant. And then that's when I thought we were going to actually go out and do more significant, larger raises."
The idea was to take a more deliberate approach — establishing a solid product, solid customers and a solid team — which would lead to cleaner, faster rounds with people that are strategic and helpful instead of asking the investor community to fund those steps.
By having the right foundation, it was easy to tell the company's story when it was time to begin the fundraising process. Estafanous says he had been building relationships with several investors over a long period of time, joined several accelerator programs and got to know more people. Then it was a matter of crafting a story around where the company was, how it got there and its potential for growth with the investment capital it was seeking.
"I always wanted the story to be around this isn't about figuring out how we're going to go to market," he says. "This isn't about building product in order to have a company and likes to stand on. This isn't a product that just looks really cool and may have some potential it. I wanted to be able to tell the story that we have something legitimate here. We have big logos and high-level people using the products. We have this channel figured out, this channel figured out, this channel figured out. These are the channels we need to figure out, so we're raising capital as an accelerant. To me it was always how do you tell the story that the capital is an accelerant, not a foundational component of building your business, and what does that potential look like?"
Estafanous spoke on the Smart Business Dealmakers Podcast about founding his first company and how that has informed building the second, what he learned selling that first business, his experience raising capital, and the importance of connecting with the right investors.
