How We Got Funded: Visual Revenue
July 2011: Too much of a good thing?
Hippeau gets Lerer Ventures into the seed round and introduces Mortensen to investors at SV Angel, a San Francisco-based angel fund that also decides to invest. Mortensen is somewhat hesitant. "All of a sudden, we were oversubscribed--which sounds kind of arrogant--but it ended up being half a million dollars very rapidly," he says. Two other funds, NYC Seed and Kima Ventures, join the round for a total of $512,000. "It's really difficult to not fall in love with raising money," Mortensen says. "But that in itself is no success."
September 2011: Back at the table
With the seed round in the bank, Visual Revenue has 10 employees, and its product is in use in 15 newsrooms. Any reluctance Mortensen felt earlier at being oversubscribed has been put aside. "Hey, I've got my skis on; let's just continue," he says. After a discussion with Holbech, Mortensen sets out to raise a Series A round of funding. "We discussed it long and hard," says Holbech. "The decision was that we could simply run faster with at least another million."
October 2011: If at first you don't succeed...
Mortensen is invited back for another meeting with IA Ventures, a fund he unsuccessfully pitched a year earlier. "This time, I came back and showed them we'd done everything we'd promised we'd do," he says. The new pitch strikes a chord with Brad Gillespie, a partner at IA Ventures. He describes Visual Revenue as "the kind of company you couldn't stop thinking about--kind of like a girlfriend who could have been." Over two meetings, Mortensen twice lays out Visual Revenue's scaling plan on a whiteboard in IA's office.
November 2011: The big payoff
"The last meeting with IA, I said, 'Are we going to get married or not?'" says Mortensen, who had met with 10 other firms interested in leading Visual Revenue's Series A round. Gillespie and Mortensen walk through the city toward Union Square for an hour, hammering out details of the price, how much stock to set aside for future employees, and the composition of Visual Revenue's board. "It was a freezing winter night," Gillespie says. "By the time we got to the subway stop, we were able to shake on it." SoftBank Capital also invests, filling the round out to $1.7 million.
January 2012: Final score: $2.21 million
With money in the bank, Mortensen is feeling a new kind of pressure. "I think you feel a different sense of responsibility, because you are spending other people's money," he says. "It's easier spending yours, because if you fail, there are no disappointed faces." Visual Revenue's client list now includes USA Today and NBC, and the company is up to 25 employees. "This is turning into a real company," Mortensen says.
