During his 15-year startup career, Brian Dally has built successful companies from the ground up. With GROUNDFLOOR, a real estate lending marketplace open to non-accredited investors, CEO Dally has been through several rounds of fundraising — first as a seed-stage startup and now as a late-stage enterprise. The startup’s fundraising sources have included investment rounds from friends, angel investors, venture capitalists, including their latest Series A round led by Fintech Ventures.
Shortly after moving the company to Atlanta from Raleigh in 2014, Dally attended Venture Atlanta, the largest investor conference in the southeast, to introduce GROUNDFLOOR. “I felt like I had a really smart startup when I got to Venture Atlanta, after moving to Atlanta two years ago, because it attracts a really good crowd of people, both in number and quality,” says Dally.
This past week, after a great presentation at Venture Atlanta and a funding panel at the Gathering Spot, Dally shared with Hypepotamus about his strategy for pitching for investment, his thoughts on AngelList, and biggest piece of funding advice to founders.
Since this is your second time, what was your strategy going into Venture Atlanta? Did you have similar goals?
First time around we had just moved to Atlanta from Raleigh and our strategy for Venture Atlanta was very different last time compared to this time. Last time, which was 2014, we had just raised about $1M in seed capital and we knew we were going to raise a little bit more. What we wanted to do was participate in Venture Atlanta as a way to introduce ourselves to the startup community. Reach out to investors, potential employees, executives, because we were new and Venture Atlanta is really good for that.
Now this time our strategy was a little different. So this time, we’ve raised institutional capital, now we are a late-stage startup as we have 23 employees and we are making significant revenue. Our strategy was to be introduced to out-of-town venture capital firms that are expressing an interest in Atlanta.
How has the Atlanta community attracted more investors as of late?
There’s a different tone from even two years ago, from the people coming to Atlanta to make deals. With a company like Kabbage starts to bring in investors from out of town who are now involved with Kabbage, they start learning about Atlanta. They visit Atlanta because they are involved in Kabbage. The founders asked their investors to come participate in Venture Atlanta.
Now that they are in business together, the investors want to be supportive about the things Kabbage cares about. As we grow companies like that, and there are probably ten other companies that are like them in our community, we are bringing their investors to Venture Atlanta and the city.
I want to promote Atlanta because then it makes it easier for me to bring capital in my company here from outside.
As a founder, how did AngelList help your company and would you recommend it?
I was really skeptical, but I got on AngelList. I put our video out, I updated our page, and I sat back and waiting on a Friday night. By the time I woke up, on Saturday morning, I got this email from a Hungarian investor. Within a week of setting up my AngelList profile, I had two expert investors for close to half a million dollars.
If you are trying to get angel investors who know about your business and might be interested in your business, it is a good way to network toward the investors you need and want.
It worked for us, it worked for us certainly the first time around with the Hungarian investors. I think it’s cool that our customers had a way to invest in the company, the ones that wanted to. So I’m grateful for that. But it didn’t turn out to be a big part of our capital raising except for meeting a few investors in Hungary, who I wouldn’t have met without AngelList.
What’s the best funding advice you’ve ever received?
Most people have an easy time thinking about the money that they need. The advice that I give people about fundraising is to think about the milestone that they are going to achieve and what that will mean, what that will justify, how that will support your fundraising, so you just hit a revenue target or whatever the metric is that’s important in your business. Then, also raise enough money to not just get to that milestone, but to survive after you’ve done that milestone.
Most people think, ‘I’m going to hit the milestone then I’ll have money’, but that’s not how it works. That’s when the fundraising starts. The fundraising doesn’t start until you hit the milestone and then it will take 6, maybe 9 months, to raise the money after that. They don’t raise enough money to get to the milestone and then survive 6 to 9 months after that and have enough gas in your tank to raise capital.