The Founders Who Raised Huge Money Easily
It‘s the dream of every startup to have VCs begging to invest, but how these founders did it are important lessons to learn.
Parker Conrad is the founder of Rippling, a startup which is valued at US$11.25 billion. This is his 3rd attempt. When he started his first company back in 2006, it dragged out for what he called “seven years of slow, grinding failure”.
In an interview with Garry Tan, he spoke about how he approached “70 different investors” and everyone turned him down. Eventually he fell out with his co-founder and left the company.
The day he left the company, he also started a new one called Zenefits. This time, he was so disillusioned with fundraising that he decided he wasn’t going to go through it again.
Instead, he would join Y Combinator, “raise a few hundred thousand dollars”, and then use the cash flow from the business to keep going. His goal was just to become “a reasonably successful tech-enabled insurance broker”.
That was September 2012.
Beating the odds as a solo, non-techie founder
Conrad started Zenefits because of his own experience buying health insurance for his new employees in his previous startup. He had to send an application by fax each time and he saw how backwards the industry was.
Zenefits grew so fast that it became the fastest growing startup of 2014, beating Uber and Airbnb to that title. By mid-2015, it’d already raised more than half a billion dollars.
When Conrad was accepted into Y Combinator, he was also an exceptional candidate because most startup programs prefer founders to come in a team. Not only was he a solo founder, he was also a non-coder trying to build a tech business by himself. Conrad had taught himself just enough Python so that he could build the MVP for Zenefits.
He eventually had to leave Zenefits because of regulatory violations when he was CEO. Conrad then started Rippling, a HR software company. It was again based on his own experience in his first startup. He found it really painful and time consuming to onboard new employees, so he wanted to build a…