0:00 - Intro
1:14 - Arc Browser Fans
2:57 - It Started with Workona
3:47 - Finding Arc Browser
4:55 - Couldn't Use Arc (MacOS Only)
6:06 - Arc Browser Onboarding Experience
7:06 - What I Hoped ChromeOS Would Be
7:56 - Convincing Friends to Try Arc
9:43 - I Want to Invest in Arc Browser
10:19 - Arc Browser Investors
11:51 - Getting Josh's Attention (CEO)
16:59 - 4,400 Word Article for Josh
20:17 - Josh Responds...
21:17 - Copper CRM (Sponsor)
22:35 - "How much can you put in?"
23:15 - Crowdfunding Investment (Sandhill Story)
26:14 - The Arc Content Journey
27:03 - Continual Rejection
27:45 - The No Subject Email
30:30 - Josh Called Us?!
32:35 - I'm Trying to Let You In!
33:44 - Preparing For The Investment
34:44 - It's Happening (Bleep) Sell Your Stocks!
36:26 - You Can Buy a House With That!
37:55 - Angel Investors Don't Get Into Series B
38:22 - Pro Rata Rights Explained
40:31 - We Don't Need Your Money!
41:30 - A Glimmer of Hope
42:47 - When No Doesn't Really Mean No
50:05 - The Big Arc Browser Launch
50:27 - Sneak Peeks
Andra Vomir: There's a lot of depth here. You actually had a decade of conviction why you wanted to invest.
Alex Bass: If you could invest in the operating system for the future of the internet, would you? Exactly a month and a day later, I send another message. Going to continually message you in various places until I get some type of response because my wife and I are obsessed.
Hey Josh. Hey Alex, how's it going?
Andra: He was like, okay, there might be another opportunity for you guys to
Alex: invest. When you feel that level of magic in a product, I started sharing it with people. Did they say no three times? I can say it, we can bleep it out. No, don't say it. But it can bleep out. This is a very long bleep.
This is kind of where the journey began.
Andra: This video is sponsored by our good friends at Copper CRM. In this episode, today, we are talking about when things don't go your way with angel investing. Not when you lose money, which is what you might think when I say that, but we're talking about when things don't go your way, when you can't invest in a company you really want to.
True. That's. I know you're so wounded from this topic. Okay. If anybody follows us like online at all, they know that we have been very vocal in supporting a company and that company is
Alex: Arc Browser.
Andra: Do you hear the pain in this guy's voice? So much so that people have messaged us, you particularly, to congratulate you when they have a new feature launch because they think you have invested.
So much so that when we have like joined the wait list or skipped the wait list on our website that someone messaged you and said VC brags. Yeah. So. Everybody thinks that we have invested in ARK and the truth of the matter is we have not yet invested, but we are very much trying to, and this is one of those scenarios where we would love to give this startup our money, but unfortunately they will not take it at the moment.
Yeah. So this is the story of that. So let's start with you finding ARK because this is kind of funny. Yeah. Yeah. Yes, how did you hear about
Alex: this browser? Okay, so I have used Just about every browser out there to the point of like even the productivity type browser So there's there's browsers that have specifically been built with apps at the core So like on the sidebar there is your gmail and your calendar and a sauna and whatever And they've never really quite fit or worked in the way that I wanted them to.
What browsers are these? I can't even think off the top of my head. Um, but then there's the whole level of, I don't know if I can say the name, but they're actually the company that we're, that I was going to be going to work at, which started the whole thing of leaving Buffalo. Actually, it's a Chrome extension called Workona, which essentially is some of the concepts around workspaces and browsers.
Uh, and tab management and connecting all of this at a core and sharing it with your team and all this stuff around that. So I was a deep believer in that space and giving that company product feedback for two plus years. And that was like what prompted them to reach out and ask me if I wanted to come to Silicon Valley and work with them.
So this has been a space that I've been like. Intimately deep with to the point of being very skeptical of it because I've tried many different solutions out there and I've ultimately just come back to chrome at the end of the day. Um, so, yeah, I had seen someone writing on Twitter about like, oh, you know, arc.
Browser or what the browser company is working up is like super impressive. And I just, you know, wrote it off as like, Oh, another browser. You click on it. It's like, Oh yeah, it's, it's another browser. Um, and then I had someone who was also super interested in software, reach out and connect with me on software.
Cause we were both geeking out on some of the same types of software, productivity type software. I think he was using motion and things like that too. Is this the young
Andra: man? Yes. He's a young
Alex: man. He's a young man. And, um, I was like, you know, how actually is Arc because like you used it and he was and he's like, it's amazing.
Like it really is special. So I was like, okay, like still skeptical. But like, is there any way that you can get me in? Cause there's the wait list. And he's like, you know, I'm, I've been close with their team, giving tons of feedbacks, like I'll ask them. So he had sent like an intro email and the, the. team at the browser company was like, okay, yeah, like we'll let them in.
So I had said like, well, first of all, I was using a Chromebook for six, seven years and it only worked on Mac OS. So the thing is, I'm like, cool, now we get access to this thing, but I can't even use it on my computer. And I had this whole backstory as to why I was even using Chrome OS. And I'm sure like we can get to it at some point in more of like the future side of this conversation.
But, um, I asked them if they could invite my wife, you, and because I said otherwise she would be super jealous. And so they gave you an invite and we had both got on it. Um, I used your computer to sign up for it. Did you
Andra: you signed up for it in your profile first because you have a profile on my computer Yeah, and that was in like your own time This is like you're vetting it on your time.
And then you said I have something to put on your computer Yes, and when you put it on my profile, yeah, this is like some of the remember we were talking about like in previous We don't know when it's going to air, actually, so never mind. But sometimes, yeah, there's new software that's thrown my way. And this was one of those, and you weren't like just putting a new software on my computer.
You were like, sit down. Yeah. This is
Andra: You're like, tuck your chair in. Yeah. And I was like, what is happening? Downloaded ARC, and oh my god, like, I remember being like, whoa, because I had never seen anything like that before the onboarding experience.
Alex: Yeah. It was very cool. They invested a lot into that initial experience.
Andra: Didn't you say they watched movies?
Alex: They looked how movies and trailers and things built things up. There's these micro pieces to it. To get someone's attention and they built all that up, like the type of music that played to the cadence and all these things, just a lot of research went into just that initial onboarding because they figured that is the thing that's going to make people go, wow, because it's like give it
Andra: a shot at the beginning of a movie.
It's like the whole like build up to it. It's just like always so impactful. Yeah, I had that experience for
Alex: sure. So it was something that I was initially skeptical of. And then upon putting it on your computer and playing with it a little bit myself, I was like, this is actually what. This is what I had hoped.
Workona would be. This is what I had hoped Chrome OS would one day be. I see the, the vision here and I actually need a MacBook. Yeah. I was a Windows user, a Chrome OS user, and this was literally the thing that made me say, okay, I actually need a MacBook now. I need, I need to use this software.
Andra: And me being an Apple brainwashed person was like, finally come over to the
And I'm like, it's not you. It's not Apple. It is Arc. Like that. Yeah. That. Was the impetus for it. Yeah. Um, so yeah, I think it was just using it. And then I think there's this point where when you feel that level of magic in the, in a product and I started sharing it with people and like, Oh, like here, you know, give us, give this a shot and getting people to sign up for it and seeing that like they were skeptical.
And then they gave it a shot and they're like, this is amazing. It was actually the first time that I've ever seen with a product that universally I could go to someone that is not technical and have them try it. And then being like, this is amazing. And the people that were technical that would fight me on it.
And I would debate with them and create content around that. Debated with David for five hours on it because he said, I'm happy with chrome. I have no reason to switch There's they're like you can't get me to switch when I don't have a pain point I'm, like you don't need to have a pain point. This is just better in every way And seeing someone like that be like hey come over here two days later Like he came over and he's like film me and i'm like what and he's like just film me believe me So I film him and I was like, what are you doing?
And he's like i'm uninstalling chrome Because i'm habitually opening it And it's just so much worse than ARC and that became his daily driver. And this is someone that I'm like, I actually had to work so hard to get you on it. But now, like you love it. So there's those indicators, like with the dispatch investment, you are an indicator for me because you wouldn't use slack.
And then after you started using dispatch, you started using slack. And I'm like, wow, this tool actually got you. It's a layer atop of Slack, but it got, you'd actually go into Slack. So in the same token, everyone around me that's using it is like, this is so much better in every way. That's just like, if there's an indicator out there for like, wow, this is.
This is an investment to make is it so I think this is kind of where the journey began of trying to get in, in a way, but also being like, I don't think that it's possible because I, I looked from some of the background and their investors were top tier people. Like if you look at the investor list that first, so the founder, Josh, like he had.
Uh, co founded a company about, I think like five, six years ago and sold it to Facebook. Um, Facebook acquired it, they worked there for a bit and then they left and he started this up. So like he has a successful background and then the investors that they had is like, you know, I think one of his mentors and they create public content around this is like the, the ex, uh, CEO of LinkedIn and like, I think the co founders of Figma have invested in it.
And. Um, I think that the CTO of Instagram, like the first version of Instagram is on their board. Like they just have an amazing cast of people on their cap table and also reading more into it. They were like, we only raise money from the people that built the internet because they're going to help us build the future of the internet.
Um, so that's one of those things where it's a deal that I think they had rose like 20 million or something or like 12 million, but it was like out of the gate seed round, probably crazy valuation, all of that stuff. So it's like, how are we even going to get into this? But I figured I'd ask. So
Andra: it's not like you're the type of person to roll over and say like, Oh, well, you're like, yeah, this sounds difficult.
I am up for the
Alex: challenge. I don't even know. And as I genuinely didn't think that I'd be able to, I think it was just more of like, I love this thing. And I should at least try. I have to try. Yeah. All the indicators seeing this, I'm just like, it's still relatively early. Like it was still Mac OS only. And all of these things that it's like, this is a time to give it a shot.
Andra: And I was going to say, I think you also just genuinely had an appreciation for the product and the team and how they were building. So I think, like you naturally have done for your whole career, you just wanted to also support
Alex: them. Yeah. Yeah. So I, um, I did a few things. I had, of course, added Josh on Twitter and liked many of his tweets that he was posting about it in the browser company and any employee from the browser company, I'd follow them on Twitter and I would, you know, retweet them occasionally or, you know, like their tweets and whatever, anytime they release a feature, I would like write a comment in it, like try it in a way like show I am someone that's supporting this.
I'm here for you guys. And I'm just like selflessly supporting. I just love what you're building and Um, I sent him his DMS were open, so I sent him a DM on Twitter. Um, I said, well, I guess this gives some of the context in it. I said, just added you on LinkedIn and sent over a message figured I'd send it here to because when you add someone on LinkedIn, you never know if they're ever gonna get the message that you just get spam with that stuff.
Um, so added. And so I essentially said. Love ARK. Love what you're building. Would kill to be able to invest in your next raise slash round slash bridge. Have a whole myriad of reasons why my wife and I love ARK. We also work together and angel invest together and we'd love to be more involved. Keep doing what you're doing and genuinely shocked that i've been Managed to be pulled from chrome after over a decade of well loving it.
Well done. So I sent this to him on august 3rd 2020 Two last year, 2022. And I didn't get a response. I sent a similar message via email. Um, I'm not gonna put the email out there, but I tried an email, well, I guess I could put out there 'cause it bounced . Okay. I thought it was his email. It wasn't. So then I tried another one and it didn't bounce and I'm like, okay, so I have sent an email to you.
I've sent Twitter dmm, I've sent LinkedIn, dmm, and I'm messaging on. tweets and all this stuff. So this is like many months are going by and whatever. So then, um, June, July, August, September. So the next month, exactly a month and a day later, I sent another message going to continually message you in various places until I get some type of response because my wife and I are obsessed.
Wink, smiley face.
Andra: I just love like. You know at this point I know you that this is just like such an Alex thing Yeah, I mean you don't care if people don't reply you never take it personally. You don't get offended You are just like you are busy and I like what you're doing. So Let's just i'm just gonna keep messaging you Yeah,
Alex: and this is where I it doesn't maybe it was the same day because it's not showing the the date, you know Okay, it must have been the same day.
So he actually responded and I was like, oh wow, so he said hey Alex Thanks so much for the continued kind words. Don't have an open fundraise, but the gesture means a lot So it was very much like I am someone with boundaries. I know when someone sets boundaries It was very much alike You know, appreciate obviously your support that I've been seeing, but like, it's just, yeah, we're not doing that.
And I'm like, okay, yeah, that makes sense. But at least I put my shot out there, um, essentially responded back and I was just like, ah, you know, I appreciate the response, you know, rooting for maybe a customer allocation. Maybe one day you guys will do something like that, whatever. And I just said a lot of the things that I love about it and.
Some of the vision I'm like I so see this like this is just amazing. Anyway, you'll continue seeing me I'll continue telling everyone about ARK and I'll continue to be interested whenever you do decide to raise again in general I'd love to help however I can. When I find a new product that I love, I get obsessed.
That's ARK now. Smiley face. Thank you for making my internet, er, thank you for making my the internet fun to use again. So I didn't proofread.
Andra: We promised there'd be reading on this episode.
Alex: Yeah. So essentially just like heart face, you know, emoji, like not the one with the hearts floating, not the heart eyes.
Yeah. Um, so anyway, that, that was just kind of where things sat for more than a month. And at that point, I didn't really know what else to do short of like. What can I do to maybe make us look bigger than we are in a way like we were obviously putting in Sizable angel checks at this point. We had invested in 18 plus companies So it's like we're not just like trying to do whatever like at this point.
I'm confident even what this means like, you know Understanding where they were at. I think they had rose in a series a at that point all this publicly I just, yeah, I, I figured I was confident enough to be like, you could potentially let us in. So I'm just going to like throw something out there. Maybe if you thought we were more of like a VC firm.
So what I did was I tweeted from EfficientVC Twitter, which is us. And I said, if you could invest in the operating system for the future of the internet, would you? We would, at Browser Company, at ARC Internet, and then I have the GIF that is, let me in, and the guy right outside of the White House and just like shaking the gates and it's just like, let me in.
And then about like a month later, I wrote a 4400 word article about why ARC, my conviction in ARC, the backstory of the past decade of all the things leading up to this, how we're going to tie it into it, like all of this, like I just put everything into it. I
Andra: remember, it was like the beginning of a work day, and you had turned to me, And you just, like, went off on this, like, 15 minute rant talking about, like, why you think ARC's the future, like, why you were on a Chromebook in the first place, what you think the future of the internet is.
And it was, like, such succinct thoughts that I was, like, I think you need to write an article on this instead of just telling me. And I, like, lost you for two days because you just, like, went in the depths of, like, Writing down all your
Alex: thoughts. Yeah, I, yeah, I felt like you helped me make the correlations of how ARK was actually tied to a lot of like, You'd seen firsthand how, in a way, obsessed I was with Chromebooks, where you were literally like, Why is this guy, like, I had to borrow your MacBook to do a Zoom call.
And when we were in San Francisco, because my computer just like died when it went to zoom, the CPU just overheated. And I had the top of the line Google pixel book go that I spent two grand on it, the highest end model that the CPU would overheat. And I couldn't even do a zoom call. So you were also like from afar, like, why the heck is this person like using this like shitty.
Laptop. And here I am. I'm like, no, no, no. Like the point of it is like, it's a portal. I just logged into my Google account. I have all of my stuff there. If I break it, I drop it. I go to someone else's Chromebook. I log in, I'm back into the portal of all of my stuff. It was the vision of what that would be and how that was the future to the point where I was even trying to push Chromebooks onto some of our customers.
Cause I used to be in, I like IT services, managed service provider was the business. So I was like, wow, like imagine having a company that just uses Chromebooks. If the Chromebook dies. Then you just swap it out with a new Chromebook. You say, log in. Whereas right now it's like if a Mac book, you spill water on it.
Also, Mac books are frigging expensive, spill water on it. There's a lot of work for the it person to actually get it up to speed and working and functional for that employee to use again. So I just saw like the vision of what this could be, what Chrome OS was trying to be. And I believed in that vision more than even the product and software that existed.
Andra: think from the outside, what I saw was that you weren't making. Flippant decisions about the companies you wanted to invest in like you actually had a decade of conviction that went into why you really liked arc and why you wanted to invest so it was interesting for me to to go. Yeah there's a lot of depth
Alex: here yeah so essentially wrote this article and yeah but eight plus hours and you just writing it the one day and.
You help proofread it. We've been, you probably put two hours into that three hours and I put it out there. With that the mindset of I don't care if anyone reads this a I wanted to get it down because this is just like Finally some of my thoughts in my journey in a succinct way But I'm like if Josh reads this article That would be success to me like it and even if he reads part of it I would I like that was in a way the goal.
I didn't care if anyone else read it. So I got a DM from him that said hey What's the largest check you could write so then that this was this moment that was like, wait a minute Like he put up a boundary and now like efficient VC being like, oh like we would invest whatever I think he kind of got to a point where it's like well, wait a minute Like how serious is this lives?
You don't know anything about you. Like how like how serious are you about this? so, of course like When your company has already rose, say, tens of millions of dollars, you don't want to hear back, oh, we could write a 10, 000 check or 20 or 50 or whatever. Um, so at that point, I'm just like, okay, I can't even believe, like, I, I think my eyes were tearing at this point when I saw that
You came into the bedroom and I was like, still getting ready for the day. And you were like, Oh my God. And you had tears in your eyes for sure. Yeah. And I asked, like, are you crying? And yeah, it was a, it was a big moment. It was something that you really cared about.
So we literally had to pull our video producer in for this one because this morning you were describing to me about how you were looking for a tool that would help you in your business. And what is the general gist of what you were explaining that you're looking for? Yeah. I mean, I went to you because you like this kind of stuff and I was just like, man, I have this problem.
Like I have this idea. Of wanting to like have like almost like a dashboard. I didn't really know the right words to use, like a dashboard of like different clients that I have, like the ones that are currently active clients, the ones that like are hot leads and like maybe they've done this or they have paid, they haven't paid.
That'd be so cool, right? Yeah. And I was just sitting there with the biggest grit and he's just going and going and explaining all this stuff that he wants. And I just had the biggest grin on my face. And then. Finally he stops talking and he's like, okay, so it sounds like you're looking for copper CRM and you're literally looking for the thing that we do for businesses.
And he's like, yeah, but I wanted to like trigger emails to send out a certain types of like, yep, everything you can do that in copper. So you're like, you're literally describing a CRM. So Corey, you're going to go into our description. You're probably going to be putting it down there and, uh, you're going to go check that out, sign up for copper and let us know what you think.
Does it work for what you're looking for? I'm down to try it. Cool.
Andra: So then, I mean, you share, cause I don't know what,
Alex: yeah, we can share. Um, so. We essentially said that we can maybe do something like 50 grand, which also would be the largest single check that we'd ever put into a company. And that is like substantial. Um, also knowing that that's not even like enough in a way.
And he was just kind of trying to gauge interest, um, to see maybe if they could do something, maybe not. Um, so then I went to the point of, well, who do I know? I'm sure I can probably say this. So we were right. We were at a friend's Halloween party here in Austin and there was our good friend there. John from Stonks.
Mm hmm. Hi, John. Hi, John. He, um, Him and his wife, his wife works for Superhuman. We were just geeking out about software as we typically do and we had invested in Stonks. So everything like that, whatever. So it was just cool that we were just talking about all this stuff and then I couldn't help but I'm just like I was Telling everyone about ARK.
I was like, have you guys heard about ARK? Like, no, what's ARC? And I was like, okay, it's a browser. And they're like, oh, okay. And I was like, no, no, no, like hear me out. And then I was just explaining the different profiles and how I could jump between work and personal and how the folders have re architected the way of like bookmarks.
And it's just so much better and process, like being able to build out workflows and processes and things like that and share them. They're kind of intrigued. Um, I showed them parts of the article where I had like gifts that were showing, like jumping between the profiles and how you keep things separate and some of the, the, you know, widgets and things like that, that were kind of baked into it and then explain the vision that I had seen and everything like that.
Um, and I said that, like, you know, we're trying to invest in them, like, and, um, yeah. Yeah, they were both super interested and I was like, I could send you an invite. I get like five invites a month that I can use and like, but you like, of course I'll give you guys one. So she's like, she's interested. She signs up for it.
Uh, he signs up for it. And then I was like, the thing is, I don't know if we can write a big enough check to get in. Like this is just, so he said, Oh, like we're always looking for like good startups to like be on stocks or anything like that. He's like, we could, we could probably do something like we could put in a quarter of a million dollar check.
And I was like, Really?
Andra: Because they would, like, get the, their network to
Alex: invest their stuff. Yeah. They could essentially probably be like, we'll spin up a, a syndicate of, you know, people or whatever else. So then of course, like Josh and I, like we had stuff back and forth and I also don't want to get into the depths of any of this stuff.
But it was just more of like, you know, he didn't know if it was really going to be possible. So then I kind of just like added in like, okay, so spoke to a friend. And if we can get. If I can get you like 300 grand of interest, whatever, like coming from us in some way or whatever else, is that something that could work?
And of course, I was like, that doesn't change anything, like appreciate it, like whatever. But I'm just like, how do I now leverage this conversation that was just had and just been like, we want to get in like whatever we can possibly do. Um, and it was a long shot. It was also, I just know that they're, they're very careful of their cap table.
You could just see it. Like that's something, something of their pride, like their pride full of it and all these things. So you don't want to just take random checks from random people, but I'm like, maybe I can pull the money thing. Cause we can't do that personally. Um, so then it kind of just went into this whole waiting thing and he's like, you know, like I'll, I'll see what I can do and whatever else.
And it ultimately ended up like falling through and in the interim, like what. What we did was we created just like tons of content around arc. Like we literally took these conversations that we were having with people and, you know, recording videos and pushing out these arc videos on Twitter. And they were getting like, in some instances, 10, 15, 000 views, like, or impressions or whatever else.
And some of the videos, like 4, 000 views, like our most viral content in our little space of like software, it was, it was that. And I think it was just like. We were just doing everything we can do to support them. We were creating content around that, literally spending our time doing this stuff, spending tens of hours doing this together and pushing it out.
Um, and then just continually asking them, like if there's ever this opportunity, and I think we were literally just their biggest fans, like in every sense of the word.
Andra: They, did they say no three times? Was there a second? Cause I can't fully recall. Yeah.
Alex: Well, there was, there was, um, it kind of had come up again and it was like, maybe, okay, maybe we can do something.
And yeah, I think it was, it was a third time that went through that. It was like, just, sorry, can't do it. Um, but he did say, you have been such big supporters that like, I promise we will get you into our next round. Like I, like I, like, yeah, that was the second time. I think so. Yeah.
Andra: Okay. Yeah. So then some time goes by and Josh invites us to
Alex: have a call with him.
Wait, wait, wait. So we get an email from him and no subject line and it was just like, Hey, like I, I Just wanted to say that I appreciate you guys. And like, I don't even know who you are, like, let's jump on a call. Yeah. Um, there was something too, like he had sent, you know, uh, uh, Twitter message. Cause of course, like, I'm just like, you know, bummed out that it didn't really work with the investing piece and then, but he's.
There was a point where he didn't respond for a bit and then he then he wrote, he's like, sorry, things have been so hectic. Like, I'm not ignoring you and all these things like that. And whatever. Um, you know, just spending some family time and things like that. And things are obviously busy. So then, of course, I'm just like, that's like, I feel nothing toward like I like you are absolutely busy.
I appreciate that you have like ever sent me any message like that. Like, You don't have to apologize to me. You should spend time with your face. Spending time with your family is more important than talking to me. Anything like you should focus on you and don't in any way feel any amount of anything.
Um, and I think I had said something like, you know, in time, like we'll, we'll develop a friendship. And my mind is like, like three, five, 10 years. Like I think eventually, like, I, I, I just, I don't know. I just kind of feel like I'm fine with being playing the long game, even with you with becoming a friend or just someone that like that can help in some way.
I don't know, just literally very open ended. And, um, yeah, and I almost in that message wrote, like, at some point would be so cool to just like jump on a call to just like talk. I just want to talk about the vision that you have. And just like, I, I, I feel so connected to it and I just wanted to like share in a genuine, like.
There's so much passion and conviction that I have. I just want to share. I just don't even know what, but I just want to like share it. But I didn't, I'm like, no, I'm the same thing. I'm like, I'm respecting your time boundaries. Like I, like if that call happens two years from now, I'm fine with that three years, five years, whatever.
I'm not going to ask for it. I'm just literally going to like you do you. And then this was where like a month later, again, I think like the tears, like I just got an email from him that was just like, you guys have been like self asleep. Supporting our biggest fans. Um, I just need to know who you are.
Would you be open to just jumping in like on a call? So, of course. Yeah, yeah, it was very much like, yes, whenever, wherever, whatever, like, yes.
Andra: Yeah, and I remember, like, saying to you, you know, you've been building the relationship, like, I obviously want to overhear the call, but I don't want to, like, come up and, you know.
Like, I just want you guys to have like a moment to bond and I was kind of like inserting myself out of the picture and you were like, yeah, I guess. And then when we, it was like a phone call that we had with him and he's just like the nicest person like he is. And he was like, is Andre there? And I was like, yeah, I'm here.
And then the three of us ended up having. Most of the chat and he like yeah asked about how we met and
Alex: it was it was very much like in a sense He was like, yeah, like obviously you guys know a lot about me Like I want to know about you Like I don't know who you guys are. Like all I see is you're just like you are literally our biggest fans Who are you?
Hey, Josh. Hey Alex. How's it going? Good, how are you? Is your wife there? Yeah, Andra is here. Hello, how's it going? Hi, Andra. No, I mostly just wanted to say thank you to you both. I, um, I think one of the challenges of the stage right now is just have Uh, an increasing number of things going on, all for good reason, but I didn't, I'm so, I, I, I've, I've reckoned, I've noticed, the team has noticed how, uh, gracious you two have been, how consistent you two have been, you know, just, you're two of the most supportive people, I think, in our corner, and, um, I've been so caught up in everything going on that it's like, you know what, no matter, there's, oh, I'm always going to be busy, we're always going to be busy, you know.
I want to take a moment just to say thank you to the two of you.
Andra: And through that conversation we had, like, I remember he only had 30 minutes and it was like 10 minutes left. And he was like, you know, I don't want to talk about investing. And then we were like, no, no, no, we want to talk about that. And he was like, okay, there might be another opportunity.
Or there might be an opportunity for you guys to invest, um, if we do, like, what kind of round was it?
Alex: Well, I don't know. It's, it's just more of like, we, we, we might do something. It's, it's, again, it was just this thing of like, maybe, possibly, in a way it's like he's fighting to just try and like give back to people.
To like people that he's seen that have like supported them so much because he's like it it was so heartfelt in that like it was so meaningful to him personally it was meaningful to his team it was just like we see you and genuinely you have no idea how much this means to us we see you yeah and i wish that there was more that i can do But also, you know, having a legitimate company and like kick ass board members and all this stuff like that, like you have to run it like a legitimate company.
You can't just be like, cool, random person on Twitter wants to invest. Do we let them invest? Like, that's not how you run a business. Like learnings firsthand from like. Motion and stuff like that through like YC and all these things. It's like you raise when you raise and you frigging build a product.
When you're not raising, you don't dabble in raising while building a product. That's not what you do. You focus. So in a way, I think it was just like, we probably just got to them in the sense of like, just being selfishly supportive. And like, I want to do something for you guys. I just don't know what I can.
And I'm like, I don't get to just make all of these calls because there's a lot of effects that come from this. So, um, There was a point though that it's like, okay, maybe we can put something in. And I think you and me were very much like, I don't even know if you were super on board at that point, but I was just like, I was on board.
Well to the drew, I said, how much are you guys in for? I said, a hundred grand.
Andra: Yeah. I remember I, that's one of my moments where I was like, that's a lot of money. And I went through all my. You know, many crisis moments of what can be done with that money, et cetera, et cetera. And then I came
Alex: around to it, I think I just felt though that like this opportunity was like almost there.
And I think I saw how much time you and I were putting into Tron, like just supporting and all this stuff that I'm like, this is not a normal scenario. Yeah. And if money can make a difference in this, if we can raise this a bit also just wanting more of an upside by putting more in like all these things.
And Yeah. And I, and I think there's this level of taking it seriously to some degree because it's like it, that is a huge percentage of our net worth. Like that's anyone would say that we are crazy for even considering that. But
Andra: yeah. Yeah. Yeah. So it sounded like we were going to be able to invest again and then weeks go by and we don't really hear anything.
And I think you had sold some stock because you thought it was coming
Alex: up. So, okay. So, yeah, there was another thing that had come up. Um, I guess depending on when we release this, I can, I can say this. No, don't say it. But it can bleep out. I can say it. We can bleep it out. Okay. Or. Yeah. Okay. Okay. Let's remember to bleep it out.
That's fine. And we, yeah, we're, we don't even know if we're going to release this. So if you see this, like, I don't know, I'm just, I, it would be really cool to be able to share this. Um, so of course the same week that this potentially came up where it's like, Oh, a hundred grand, uh, well to us, they're like, Hey, we had something come up where, you know,
this is a very long bleep. Okay. Well, no, it would be a cut. It was literally, I'm just picturing like, Thank you. No, no, no, no, no, no, no, so, so
this is not a bleep.
Andra: I'm just picturing the listener being like, what happened? And it's just like
Alex: me. So we said, yes. And that was where I also said, I kind of want to put a hundred grand in. And you're just like, what the fuck is going on? Cause
Andra: this was, well, first of all, you wanted to put a hundred grand into both. So we 200, 000 and that's when I was like, this is actually a down payment.
Like if we did want to buy real estate and yeah, I, it, it, that took me like three days to come around. Yeah. Two. Yeah. But we couldn't put a hundred grand into the other company, we could only put in fifty. So,
Alex: yeah, there was a level where we were, we were kind of eating into like allocation that didn't exist.
Like it was just like, yeah, you know,
Andra: so we, yeah, agreed on the amount. We like stretched our comfort zone. You sold stock because you needed, you needed the cashflow. You needed
Alex: liquidity. I had to. Cause yeah, we literally had to wire the money that like that week. Yeah. And then we, there's just no, there's no liquid cash at that point.
I had to sell a hundred grand of safe. Yeah. Like,
Andra: yeah. And we're feeling like any minute now, because normally when you angel invest, it's not like. Cool. In six months, we're going to need the money. Like you basically find out that you can invest and then normally get like 30 days,
Alex: less than 30. Oh, sometimes it's, it's two weeks time.
It is literally like, we already have the person leading it. Yeah. They're wiring the money on this date. This is where everyone wires the money. We expect to have all the money wired in within three days and then it's closed out. Yeah. So you can't also being a small chat, like. 50 grand, a hundred grand.
It's a tiny check when you're looking at a series B. So this would be ARCs, for example, their series B, like we are tiny checks. And what we learn through some of our friends here, um, they said that angels don't get into series B like that, like that, that's reserved for VC. And often those rounds are fully filled out by the prior investors.
Cause there's, there's pro rata rights, which essentially means. If I invested a million dollars into your company and then you're raising your next round, I say, let's say that I bought, um, half a percentage of your company, say that I want to still own half a percentage of your company. Once they distribute more shares in the next round, everyone gets diluted.
So that half a percent, let's say that, that it turns into like 0. 4 percent instead of 0. 5%, whatever. Um, if you want to keep that 0. 5%, that means you need to buy that like 0. 1 percent of the valuation of the company. So whatever it's raised to, you kind of like that's prorata. You're reserving the same percentage ownership and you're kind of saying this dilution doesn't need to happen, but I'm giving you more money to keep my dilution away from happening.
So. What often happens in these following rounds is there's a lead investor, maybe it's external, maybe it's internal. Um, and then all the other people, cause you had people that sometimes put an 8 million into your a there, they want to keep their pro rata rights. They want to keep their dilution from happening.
So they will put in, in that case, they need to maybe put a million dollars to keep that. So then that's a substantial amount of money. So, so someone might raise like 15 million, the lead might put in like 13 and then you have just like a couple large VCs that are putting in like the 1. 5 to keep their pro rata.
That leaves 500 grand of allocation, which is not a lot of money. So then when you go to your biggest supporting angels and you're like, Hey, um, we didn't give you pro auto rights, but do you want to exercise those or even potentially put more in? That's where things get really difficult. Cause I'm like, cool.
Put a hundred grand in. It's like. We don't have like, we can't let you do that. Also, we want to find a couple more strategic angels, like CEOs of certain companies that are more strategic or something like we're, we're saving some of this tiny allocation that we have for these people. So we can't just give it all to you in a way.
So then that's this level where we're literally being squeezed out to this point where we want to give more money. But what I've learned is even getting access to the series B for people like us does not happen. Yeah. Yeah. And I think that was an eye opening thing. That's like, okay, shit, we should actually put sizable money into this then.
Yeah. In a way. Yeah.
Andra: It's a very interesting turn of, I guess, events from the typical like startup world that you hear about in a way of like you're raising money and you're pitching investors and like a company just should take money. In a way, but we're seeing a very different side of it because this is a company we want to give a substantial amount of money to for us and they're saying no,
Alex: obviously not every deals like this, but the thing that anyone says, especially someone like raising a fund, they're like, yeah, everyone says that there's no room like you, you know,
Andra: yeah, like, you know, some companies when you're Raising money, it's also like you are acting as a salesperson, so you want to create FOMO.
And it's just funny sometimes like listening to, yeah, like people that are trying to create FOMO and then like the companies that are actually like giving like half FOMO because you want to get it. Okay. So to wrap this up, I guess, what are like our learnings from this scenario? I guess we talked
Alex: about some of them.
Yeah, I mean, I think the, the thing that I've done throughout all this in a way, and, and, you know, maybe some of it, it just stems from being in business and I've been told no somewhat like you try to sell a customer, they say no. And when you're, when it's just yourself and you have to deal with that, you deal with a lot of rejection.
So in a way I'm like, cool, like, yeah, I reached out to Josh and I was expecting to get rejected and I'm actually like. You don't, you don't, you know, when, when I got teary eyed, for example, it's like, that doesn't come from you expecting that comes from you expecting to get rejected and not, that is literally like an emotional hit to you.
So. But that doesn't mean that you don't try. So it's like I'm gearing up for rejecting, expecting rejection and still pushing anywhere anyway. Are you saying that
Andra: you were moved that you thought you were going to get rejected and you didn't? So you're moved by like your
Alex: own persistence? Yes. There's, there's a little glimmer of hope that was given out when I was expecting zero.
Andra: And. I guess there's another example with Mercury that comes to mind when we're talking about like being told no and being told what you can do. And I think like, this is, this is what I love about entrepreneurship in a way, because I think like, yeah, there's rules in life when you know that you're like.
Guide it on. Yeah. And then there's like everything else. And I think like if you're entrepreneurial, you normally are living in the everything else world. Yeah. And you're trying to kind of, yeah, like bend and mold what exists. So with Mercury, which is one of your investments, I didn't even know what Mercury was.
I wasn't using it at that point. I didn't have any connection to it. So yeah, it's a. I know they're not supposed to be called a
Alex: bank. Okay, so they are a banking technology. They're essentially a technical, uh, layer atop of a bank. So they have banking partners and they're essentially a business bank. Like you, like if you need business banking services, you can use Mercury or you can use a traditional bank like Chase or something like that.
So Mercury essentially partners with the proper bank and the bank is the custodian of the funds. And Mercury is literally the technology layer on top of it. So I'm, instead of interacting with this really shitty, outdated user interface, that is a traditional bank, I'm dealing with a beautifully modern, amazing integration focused interface that just works so beautifully well.
That's what Mercury is. So. I was using them in this whole myriad, like I'm not going to go to the depths of it, but I, I use almost every single business. Neo bank, neo bank is essentially was the term of like a technology layer, a top of a bank. It's not a bank, that type of thing. I was using all of them, seed.
co then as low, like they had both gone under. Did not lose my money from that. People are so curious about that. I had probably 30 grand sitting in my business bank when as low went under and I didn't lose that money. It's like, cool. We're like, you know, either the acquiring bank gives you an account and then you have your money there or they'll send you a check for that money and you did need to figure out where to send it off to or anything like that.
Yeah. Then I ultimately found, um, bank Novo and then Mercury and I was more impressed with the QuickBooks online integration with Mercury, which is something that's important if you are doing your accounting and you need your bank transactions to reconcile within your, your accounting software. So I was just like, okay, they are a modern bank.
I also didn't, when I first found them, I was kind of like slightly skeptical. Cause I'm like, it didn't feel like there were necessarily people behind it. I didn't know what was going on. Um, so yeah, I use them. I transfer all my funds over to them and I use them for about a year. Um, and then they did a community round, so through this company called WeFunder, they, this is like a crowdsourcing thing.
So you don't necessarily have to be accredited, but there's, you know, to put a certain amount in, you have to be accredited and all these things like that, whatever. But what they did with this twist, so typically a community round means anyone can put money in. What they did was they put it out there, they're like, we're going to raise like 5 million.
But from our customers, only our customers, you can, if you're not a customer, you can't be in it. And then in addition to that, it was literally like you need to sign up to refund or with your business email address so we can verify that you have an account with us, that you've had an account with us. And the amount that you could put in is relative to how much money you have banked with us.
So at that point. I had had about 200 grand that had come through the company. This doesn't mean that it's like money sitting in your bank account. It was like how much money had flown through. So that had put me, I think I'm the lowest tier of what I could put into this refunder, which was like 1, 200. Oh gosh.
So that here I'm coming from this place of like, I believe in it. Like I, it was an immediate, I'm in how much can I put in? And. I'm like, Oh my gosh, I can only put 1, 200 in. So I wrote to them and I was like, is there any way that I could put more money than this in? Like, please. I'm like, whatever. At that point they were already oversubscribed.
They had like more than, I think they had like 8 million of interest or 7 million of interest or like soft commits on the 5 million. So they're like, we actually have to like be not only strict on these, these thresholds. Like our highest, our customers that have banked the most amount of money with us, they're going to get the most allocation up to, I think the most that someone could put in was like 30 grand, but you had to have like tens of millions of dollars that have gone through there.
Um, so I asked them, they said, sorry, like it is, we have like to the point where we're even backing away from that, where we have to give people less than they even asked for. So I said, okay. Um, I noticed when I was trying to transfer money over to. We founder for this though, it said, how much do you want to transfer over?
And I'm like, well, I know they're letting me transfer 1200, but what if I put 10 grand? So I put 10, 000 in and it let me trigger it. And I was, and I literally transferred 10 grand from a bank in to it. And I'm like, it let me do it. There's no way they're going to let me like put that money in though. I know they're over subscribed and all these things like that.
And then just like, obviously time went on and they had to figure these things out whenever else. And then I just got an email like three or four months later that just said like, um, we like, thank you for your 7, 400 investment. And I was like, no shit. They, they like, they took, they took, they did work, they took more money.
And then they sent me back like the three grand or whatever, the 2, 600. They just sent it back. And I'm like, I got in for like, yeah, I wish that I put 10 grand or even more potential in it, but I'm like, I got in for more. Solely because I just tried like I just I literally people humans told me no their terms told me no I the systems let me and Maybe they made a mistake on their end and let me in and I was cool with that.
Andra: You've always gotten along better with software. Anyway,
Alex: yeah, it seems to understand me more
Andra: Yeah, so I think I'm learning from that was like you just like took a little Risk.
Alex: I thought inch. Yeah.
Andra: Yeah, you're being cheeky and then you got more allocation, which is cool. Yeah. So, yeah, we're gonna keep, we're gonna keep working on ARC.
Maybe we're gonna release this. Maybe we won't. Yeah. Uh, episode. We don't know what we... Can release right now. So if you're listening to this, whatever it is, it means we got the thumbs up that we can. And yeah, we, we really hope we do get to invest. We have a verbal commit that we can invest in their series B, but we don't know when that's
Alex: going to be.
What we can put in, like we don't know anything about anything. It's just, I think it's just like, he's yeah. Josh, like Josh has been amazing to the point where he's just like, I, I'm sorry, I've tried and like, I, I've learned a lot through this and yeah.
Andra: So what's the line you send to him? Let's close off with that.
Alex: Oh, um, the deal's not done until the money is transferred. Yeah.
Andra: Yeah. Until the money's wired. Money's wired. Yeah. So we haven't wired the money. We're not technically investors, but we are like still cheering for them. We're using obviously the product every day and I don't think there's going to be a point in the near future where we see ourselves stopping.
Actually, I think they
Alex: just did a release. We should just go look at that. I literally. I literally. Today the 25th. I can't believe we were on. Oh, it's midnight. So today they're releasing something big. Okay. Yeah. All right. Let's go.
Andra: Okay. Okay Bye
Alex: Coming up next
Andra: we're sitting with Corey who is our video producer. I don't remember
Alex: how it came up Yeah, I reached out on Twitter somehow weather came up, right? Yes, and you said there's like a storm or something I was like, oh my gosh, there's a storm here, too. Yeah, and you're like, yeah, Austin's crazy.
I'm like, oh my gosh I'm not far
Andra: from You guys have known each other for a long time.
Alex: I think one way. I've actually been listening to your podcast for years. When did you start listening to that? Probably ten years ago. We can speak the same language. For the most part. I'm not an angel investor. Yet. Oh. Oh snap.
Curious what top SaaS companies are using the software stack mentioned in the video above? We've put together a list (and even tracked the software they used to use)!