How Some Mormon Newbs Wrote Some Boring Code, Got 6 Million Downloads in Four Days and Ended Up With the Best Series 'A' Story Ever
From Pando Daily:
Garrett Gee
and his co-founders are newbs to the whole Silicon Valley thing.
They’re first time founders, young Mormons from Utah who studied design
and computer science at Brigham Young University. But you wouldn’t
guess they were inexperienced from the way they raised their Series A.
The trio had investment interest from all sides, and played firms off
each other to get the terms they wanted.
They built the world’s most boring product: Scan,
a QR code generator and accompanying app. Companies can download their
own QR code and give them to customers for coupon deals or quick social
media follows.
Scan wasn’t the first QR generator to market, but it’s an easy to use
product that gained traction. There’s an accompanying mobile app for
customers with linked social accounts, which makes the QR scan –>
Twitter follow conversion more likely to happen.
What the company does is pretty useful and boring. What’s more
interesting is the story of what they don’t do: raise a Series A from
Silicon Valley. The Scan co-founders decided to bypass Bay Area
institutional investors, even though they had the option, and take money
from an international firm instead. Today they announced their $7
million Series A from London-based Entree Capital.
The story of how their Series A transpired is a wild and crazy ride,
the sort of roller coaster that happens only once in an entrepreneur’s
life. But within the narrative arc are nuggets of gold — lessons that
are useful for the broader startup population.
Scan decided to raise their Series A not because they needed it, but
because their app had taken off. It got six million downloads in four
days when it launched on Android. When that happened investors started
reaching out, so it decided to take advantage of the momentum and raise
for reserves.
Garrett Gee, the face of the company, was challenged by one of his
co-founders to raise $3 million in seven days. Gee accepted the
challenge, and took 48 meetings with investors in the span of two weeks.
After making the rounds, he struck a deal, negotiating a terms sheet
for $3 million from a respected VC firm. Gee wouldn’t say which one,
because he eventually ended up dumping them. Scan had a month to
consider the terms and sign it before the deal expired.
But then Gee received an email through AngelList from a VC firm in
London — Entree Capital. Entree saw Scan’s profile on AngelList, and it
was looking for QR scan investments (side note: who the hell specializes
in QR scan investments?). Gee hopped on a call with them. After a brief
back and forth — we’re talking within the hour — the investor offered
him $5 million, contingent on him flying out to London for an in-person
meeting....MORE
