‘How I Did It’ is a periodic feature in which people share how they reached a milestone with their venture.
Kurt Heinrich (@kurtjheinrich) and the eCommHub (@eCommHub) is leveling the ecommerce playing field and drawing the attention of big time investors in the process. Heinrich launched eCommHub when he was 18, and three years later it has attracted $2.6 million from Atlanta-based United Parcel Service Inc., Boston-based venture firm Sigma Prime Ventures, and Atlanta-based Mosley Ventures.
eCommHub assists online retailers with monitoring and synchronizing their inventory stock. The platform helps to automate order routing, track shipments, and customize vendor data integration. These core functions allow smaller retailers to process more orders and compete with online retail giants, stated the Atlanta Business Chronicle. eCommHub will invest the $2.6 million in product development, adding shopping cart partners, and hiring marketing and technology talent.
How I Raised $2.6 Million as shared by Kurt Heinrich
What’s your venture and what makes it stand out?
eCommHub is and order management and inventory platform, that as we like to say, “puts your store on autopilot™”. We’re sort of doing for ecommerce what direct deposit did to paychecks. eCommHub works with all the major shopping cart platforms like Shopify, Magento, and Bigcommerce.
How did you decide to pursue funding?
Well, if you had asked me 6 months ago if we’d consider raising venture money, I’d probably have said no. Up to then, I had taken a passive approach to raising money, because as a 19 year old entrepreneur, first startup, in Atlanta, it’s close to impossible to raise money. I knew my best bet was to just build traction and let that speak for itself.
With that passive approach, we basically attracted an angel that approached us to “lead” an angel round. Then a local VC swooped in to lead our round, who then introduced us to another VC, who decided to lead, which led to…well, you know.
When did you start the process?
In the summer. It was thankfully a pretty quick process thanks to our traction and momentum.
What was the biggest challenge of raising a round?
It’s a humongous time sink that takes away from the time needed to just keep your business running. We were already busy fielding customer questions and managing a development roadmap – when you add meetings and legal work to it, it just becomes hard to do everything.
Did you encounter any surprises?
Our round grew far beyond what we initially anticipated. It’s definitely a good thing. Most people wait until they raise money to build out a product that has paying customers but it was backwards in our case, and that’s when you get the most favorable terms. I would not recommend any company to raise money too early.
What was the best advice you received?
I’ve always maintained a personal motto of, “You don’t need as much advice as you think you do — just start doing.” That said, I very much value experience and try to surround myself with the best, most talented people I can find (especially if they’re older than me). I’m just saying that a lot of times, young people especially, assume they need the “validation” or look for other people to answer their questions, when really they know all they need to know and just need to start doing.
What was the worst?
“Get a cofounder.” It was bad advice because it led me down a path where I was looking for the wrong thing. The most important thing is to build traction, by identifying a market and getting customers. Then a lot of the other things, like attracting amazing people and money fall into place.
How did you balance raising the round and running your business?
I didn’t really. It pretty much cut into sleeping and eating, which was already minimized. Really, it was my awesome team that helped keep the business going while all these “distractions” (aka fundraising) were going on.
What advice would you give anyone thinking about raising a round?
1) Have traction. This is the best way to attract investment to begin with. It lets you attract the kinds of investors you really want and it makes raising the round much easier.
2) Going off the above answer…be picky about who your investors are. Do they have a good reputation? Who is your partner and is that a person someone you see yourself working with? Are they just investing money or are they also adding value to your business through their network and connections? These things really matter in the long run because you want investors who will truly accelerate your growth. Think about it as a long-term partnership or marriage. Don’t just jump in bed with the most attractive offer.
Now what? How do you put that round to the best use?
Building the team to keep up with our customer growth. We’re at a unique point in our growth where our team size is relatively small to the amount of traction we have. So it’s a unique opportunity for new team members coming on now. Just like with picking investors, we value our team culture highly. If you want to be part of something big, shaping the future of e-commerce, then apply at our website: http://ecommhub.com/careers/