Seth Bannon wants to reinvent the way nonprofits do business. His first job: getting investors to chip in.
Seth Bannon always loved politics, and in 2010, the 26-year-old Harvard junior spent the summer working on the Connecticut gubernatorial campaign of Ned Lamont. It wasn’t Bannon’s first campaign, and it wasn’t the first time he was shocked by the shoddy technology used to organize supporters and raise funds. So rather than returning to school in the fall, he founded a company, Amicus, with an ambitious goal: to overhaul the way nonprofits raise awareness and funding. But first, he had to do some fundraising himself.
June 2011: Bannon wins a prize. But prizes do not pay the rent.
Cash on hand: 37 cents
Bannon founds his company, then called BlueFusion, and recruits developers from Yale University to build it. He does everything he can to save money. “I was basically living in a stairwell in New Haven and using college meal plans to eat,” he says. Nonetheless, he burns through his meager savings. Bannon gets a break when BlueFusion wins the Yale Venture Challenge. Now he needs cash: “I literally had 37 cents in my bank account.”
June 2011: A backer makes a (small) bet.
Cash on hand: $20,000
One of Bannon’s mentors is Miles Lasater, founder of Higher One, a New Haven, Connecticut-based financial services firm for universities and a fixture at Yale entrepreneurship events. After hearing Bannon’s pitch, Lasater commits $20,000.
June 2011: A futurist is intrigued.
Bannon moves to New York City. He’s attending a tech conference when he sees investor and thinker Esther Dyson. He approaches her by saying, “Hello, Esther; nice to meet you”--in Russian. “She perked up, because she’s a big Russophile,” Bannon says. He doesn’t pitch his venture but includes its name and URL in the signature of a follow-up email. Before long, Dyson emails back asking: “What’s BlueFusion?”
July 2011: Another well-placed ally signs on.
In July 2011, Bannon lists the company on the networking site AngelList and connects with Pedro Torres Picón, founder of Quotidian, which invests in service companies that aim to improve stodgy industries. Says Picón: “You could tell this was a guy who would not stop until he changed the world.” Bannon tells Picón he’s traveling to Silicon Valley to look for investment. Picón tells him to keep in touch.
July 2011: Sand Hill Road is not impressed.
Silicon Valley is not hospitable. Bannon takes six meetings a day for a week, but the only nibbles he gets are from investors he doesn’t care to work with. He returns home empty-handed.
August 2011-January 2012: That intrigued futurist? Now she’s an investor.
Cash on hand: $580,000
Unbowed, Bannon persuades Dyson to meet with him. “She was without shoes, on the couch, and I was so excited,” Bannon says. “Then she said, ‘I think you’re solving the entirely wrong problem.’ My heart sank.” Instead of leaving, he sits up straight, makes his case again--and persuades her to invest. Soon, thanks to Dyson’s efforts, David S. Rose, the former chairman of New York Angels, and Jim Robinson at RRE Ventures join the round. So does Picón, who chips in $100,000. Not long after, Bannon changes the company’s name to Amicus.
June-July 2012: Bannon challenges Peter Thiel to a game of chess. And wins.
Bannon is accepted to Paul Graham’s Silicon Valley-based start-up incubator, Y Combinator, and moves for the summer to the Palo Alto house where Facebook once set up shop. At a networking event, Bannon introduces himself to Founders Fund’s Peter Thiel--and promptly challenges the PayPal founder to a blitz game of chess. Thiel, a former U.S.-rated chess master, concedes the first game. Bannon has his attention.
August 2012: The Thiel connection comes through.
By Y Combinator’s Demo Day, Amicus is profitable. It also has a new strategy for pitching, ditching an intensive 12-slide PowerPoint for a single piece of paper. Within weeks of the event, several venture firms commit $3.2 million. Bannon figures he’s done but agrees to meet with Luke Nosek, one of Thiel’s colleagues. “It was just love,” says Bannon. “Luke more than anyone probably got my vision for Amicus.” Founders Fund is added to the round. Thiel friends Bannon on Facebook.
October 2012: A VC signs a $3.2 million offer, surrounded by drunks.
Bannon is working on a second round of funding when Hurricane Sandy hits New York. Before the proposed $3.2 million round can close, Bannon needs a signature from Brad Gillespie, a partner at IA Ventures. Unfortunately, the storm knocked out the power in Gillespie’s Lower East Side neighborhood. So the investor sets out on foot to find a cell signal. Finally, halfway across the Williamsburg Bridge, he gets a signal. “I downloaded the papers Seth sent and used DocuSign to sign it while on the bridge,” Gillespie says, “surrounded by all these people hanging out and drinking.”
Final tally: $3.78 million
Amicus has 14 employees, an office in SoHo, and clients such as Human Rights Campaign and the AFL-CIO. Bannon never returns to Harvard. But he says he got quite an education in fundraising. The most important lesson, he says: “Make sure your revenue is growing, rather than putting so much time into a PowerPoint.”
IMAGE: Stephanie Noritz
From the Dec. 2013/Jan. 2014 issue of Inc. magazine