Ask CrowdTwist founder Irving Fain what led StarVest Partners, with investment from earlier backers, including Fairhaven Capital and SoftBank Capital, to write the check, and he gives his team a lot of the credit.
Background: CrowdTwist provides the most comprehensive omnichannel loyalty and analytics solutions for industry-leading brands like Pepsi, Purina, VIZIO and Zumiez, to name a few. Its software helps marketers build more profitable and active relationships with customers, delivers a deeper understanding of how customers engage across channels, and drives a measurable increase in high value behaviors and spend.
And reaching customers is what it’s all about, after all. We reached out to Fain to get his take on what inspired the investors’ votes of confidence, and what the plan is going forward.
What was the funding process like?
Any funding process is somewhat of a distraction, as it takes you away from running the day-to-day business. That said, it is often an important part of building a company and there is value that you can get from sitting down and talking about your business with people who aren’t in on the details on a daily basis. It provides, at times, a new perspective on how others are thinking about your market and broader trends. It’s incumbent on the entrepreneur to then take that feedback and act on what he or she feels is important.
We were lucky enough to get our funding completed in a relatively short period of time and to meet with a number of great funds and people along the way. I spent plenty of time in planes, trains, and automobiles, but that’s all part of the game!
What are the biggest challenges that you faced while raising capital?
There are two major challenges: the personal and professional. On the professional front, it’s difficult to make sure that you’re staying involved in what’s happening with the company and moving the business forward while at the same time remaining attentive to the fundraising process, which in and of itself is intense. I’m lucky to have a fantastic team, so even while I was on the road and meeting with potential investors, we had great people focusing on CrowdTwist and our clients each day.
The fundraising process requires enormous patience and fortitude (qualities that are critical to being a successful entrepreneur in the first place). As the founder of a company, you spend countless hours building and bleeding for your company. Part of your job in the fundraising process is to find an investor whom you personally match well with and who has equivalent excitement and a shared vision for your company. You have to learn how to hear the word “no,” gain whatever value you can from the conversation, and then keep moving forward.
What factors about your business led your investors to write the check?
There are a number of factors about CrowdTwist that got investors excited during our process. First and foremost, we’ve managed to build a world-class team across the board. That’s the most important foundation you can have as a company. Our growth has been exciting in the last couple of years as well, and it was clear that this is a trend that will continue. That growth wouldn’t be possible without a fantastic product that delivers results that clients are excited about, and a broader market that’s large and only getting bigger.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Raising venture capital isn’t a necessity. Just because a company hasn’t raised any money or any more money doesn’t mean they’re less successful. There are a number of different paths toward building a successful business and it’s important to decide which one is right for you. There are costs and tradeoffs to each approach. Do what’s right for you and your business. Don’t feel pressure from the broader market and what you see and read each day.
Where do you see the company going now over the near term?
CrowdTwist is continuing to grow quickly, so we have quite a bit of hiring in front of us as we scale up our sales and marketing team, along with our product development team. We’re always looking for great people, so we’ll be spending quite a bit of time doing that in the coming months.
At the same time, we have a number of new client launches coming, with some new products that we’re releasing, so it’s going to be an exciting rest of the year!
Did being part of the first TechstarsNYC accelerator help the company and what advice would you give someone considering applying to an accelerator?
Being part of the first New York TechStars program was fantastic. At the time, the energy around technology in New York was electric and the entire community was building quickly and thrilled to have Techstars in the city, with David Tisch at the helm. We were able to come into the program with an existing product and a great team and immediately draft off the energy and enthusiasm that Techstars had created in the community. The ability to meet so many great people in a short, three-month time period certainly helped move CrowdTwist ahead quickly.
If you’re thinking about applying to an accelerator, I’d say the same thing as I did above about financing. Think about what you need personally and what your company needs, and then decide whether or not an accelerator can provide that. These programs aren’t for everyone and every company, but when leveraged effectively they can be extraordinarily valuable. Spend time not just talking to the people who run the program, but also to alumni to get an understanding of what their companies gained from the accelerator. No two companies are the same, but you can learn a lot from talking to others who’ve done it already.