It has become a bit cliché, but back when The Social Network came out in 2010, Justin Timberlake delivered my favorite movie line of all-time, “A million dollars isn’t cool, you know what’s cool…A billion dollars.”
That line hit home because one year earlier, in 2009, I quit my job and launched a start-up called PK4 Media. I saw flaws in the digital advertising industry and saw a big opportunity.
My company mission was crystal clear; we would be the advertising industry’s first Omni-Channel company. Figuring out how to fund my business was another issue entirely, and one that was keeping me up at night.
I extensively studied the pros and cons of self-funding versus outside investment and sought advice from mentors in Silicon Valley where I grew up.
On one hand, I wanted full control so I could avoid corporate nonsense and execute my vision exactly how I saw fit. I greatly admired GoPro CEO Nick Woodman who famously bootstrapped.
On the other hand, outside funding would give me resources but I knew string would be attached. We’ve all heard the nightmare stories about fickle VC partners with no industry expertise ruining promising startups.
Eight years, many Fortune 500 clients and 15 awards later, I am proud to say we have not accepted any outside funding. But it is certainly not always sunshine and rainbows. I think all the time about how an infusion of cash could help our company and our clients.
However, yesterday there were literally 5 times when I said, “Thank God I self-funded.”
1. 6:30 a.m., When I Woke Up Feeling Passionate:
While eating cereal, I saw an article from Venture Beat that angel and seed-stage startup deals were down in Q1 of 2017. This made me thank God I self-funded because seeking VC funding is a full-time job.
Last night we got the results of a campaign we conducted for KitchenAid. Measured by Nielsen, the campaign resulted in a 468% brand lift compared to the industry average of 8.4%. I could not get dressed fast enough. Today, our team would take these results into the marketplace to show other brands what we could do for them. This is where my passion lies, not on seeking funding.
2. 9:00 a.m., When I Met With My CFO:
He told me we were up double-digits in Q1 and we talked about Beepi, a used car start-up, that had to shut down after blowing through $150 million in outside funding. We keep hearing about startups that receive VC funding and spend foolishly and when spending dries up they go under.
When companies use their own money, they tend to be smarter, which leads to organic growth. Financial health is critical if you eventually decide to seek outside investment so you can do so from a position of power. For example, by declining Yahoo’s $1 billion offer in 2006, CNN reported that Facebook may one day be worth $1 trillion. (Take that Timberlake)
3. 8:00 p.m. When I Listened to Business Radio:
Based in Los Angeles, I catch up on business radio when stuck in traffic. Yesterday, one show mentioned a Fortune article about how Yahoo sales were up ahead of the company’s sales to Verizon. It made me think about the contentious and protracted fight between former CEO Marissa Meyer and the Board of Directors. This made me thank God I self-fundedbecause in March I made my third acquisition of TruEngage. I loved what they were doing to help brands engage consumers during pre-roll ads and brought them into the family. If I had outside investors, it may have been much harder to do.
4. 10:00 p.m., When I Watched TV:
After dinner, I sat on the couch and flipped channels until I stumbled upon the Steve Jobs movie. The scene where he gets fired from his own company by the CEO he hired was chilling. We all know the success story that followed but today I am happy that I still own and run my company. By the time the movie was over I was tired and start to worry about the 99 problems that didn’t get solved today. I begin to think if the time is right for VC funding.
5. 11:15 p.m., When I looked in the Mirror Right Before Bed:
Right before bedtime I look at myself in the mirror and feel a sense of enormous pride. There are some days where I look forward to cashing out and sipping umbrella drinks on a white sandy beach. But like most entrepreneurs, I am driven by competition, challenges and want to make a difference with my life. That day on the beach may come, but on this day, I am thankful that I self-funded and like the great Frank Sinatra said, I did it My Way.