Back in 2010 the hottest startup on the planet was Groupon. It was growing revenues faster than anyone had ever seen, certainly faster than Google and Facebook.
Everyone you know had two or three Groupons they were waiting to redeem, and Living Social was booming as well. The country was beat up by the financial crisis, and many thought it was the “end of days.”
[ Click to Tweet (can edit before sending): http://ctt.ec/FyIZ7 ]
Startups were taking a beating. In fact, they were unfundable and the great startups were raising their angel rounds at a $3-4m pre-money valuation.
Now, back then you could only pitch to angels if you paid to do so. I found that so infuriating that I started something called the Open Angel Forum. [ You can read a post from Rob May of Backupify about that night, held at Matt Coffin’s old house. ]
The companies I mentioned above all pitched at the various OAFs around the country — for free of course.
Stu got up and pitched his vision for a crowdsourced Groupon called Postabon — as in ‘post a good thing’ — and it was such a horrible name!
To give you an idea of how long ago this investment took place, well, peep at the hysterical looking phones on the Postabon landing page — that’s the original iPhone!!!
However, the product looked really slick and Stu presented it well. I remember thinking to myself, “I have no idea if that will work, but this guy is executing at a high-level and he sure is passionate about it.”
At that time my angel investing thesis didn’t fully exist, but I remember telling myself, “I might as well bet on someone with a lot of heart, who’s whip smart and who can execute well.”
That thesis has paid off for me again and again.
Realizing everyone had deal fatigue, and an inbox full of unused Groupons, Stu did what great entrepreneurs do when their first idea fails: he started over. He talked to all the local businesses he was working with and he found a real pain point: they had no tools to update their profiles on Yelp, Yahoo Local, Google Local, and dozens of other local sites.
They also didn’t have the ability to pop up an offer quickly. So, Stu built those tools and sold them to customers. And they bought them, a LOT of them.
Of course, once you start giving someone an affordable tool that solves problems they flood you with ideas. The Signpost team has listened to all those ideas over the past four years and came up with a brilliant, brilliant product: automated CRM for local businesses.
Here is the MRR for the past three years. Important to note that my investment took place 23 months before this revenue chart started! As an angel investor and founder you have to have faith during those early months that revenue will at some point show up — and hopefully ramp.
I’m thrilled to announce that Signpost has closed a round of financing of $20.5m with lead investor Georgian Partners. My investment entity, the LAUNCH Fund, invested $500,000 — our largest investment to date.
Congrats to the team at Signpost for all their work paying off, with a loyal and passionate customer base — and congrats to me for not talking myself out of investing! :-p