Getting Funded: An Interview with Graphic.ly Co-Founder, Micah Baldwin

Micah BaldwinGraphic.ly was conceived by comic lover, Kevin Mann, after becoming frustrated with the lack of selection at his local comic shop. In August 2009, the company attended Techstars and won seed investment of $18,000 and brought Micah Baldwin on board as CEO and Co-Founder.

5 months later, they successfully raised $1.2 million in Series A funding which was led by DFJ Mercury and included various individual investments from the likes of David Cohen and Chris Sacca. I was fortunate to have a chance to chat with Micah and he was kind enough to share some of the details that led to their success and how it could be replicated.


Firstly, you managed to raise $18,000 of seed capital at Techstars, how important was that to Graphic.ly as a startup?

Techstars was invaluable to Graphic.ly. Kevin Mann, who had been working on this idea for a year or so, saw Techstars as his way to take the company to the next level. Kevin came to Boulder, CO from Middlesbrough, UK with his friend and lead developer. Then, and over the course of the summer, he met many new mentors, including myself.

Techstars enabled Kevin to accelerate his business in ways that he would not have been able to do on his own.

Just 5 months later, you succeeded in getting investment from a round of Series A funding, how will the $1.2million help you as a business?

For us, we were able to expand the team quickly, bringing in top talent on both sides of the ocean. In a little over a month, we launched a Windows Beta, were part of Steve Ballmer’s CES keynote, launched a Adobe AIR beta, and an iPhone app. We opened a private beta, and created some interesting partnerships. The funding was able to help accelerate that growth.

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What are the plans for Graphic.ly in the near future – 1 year, 3 years?

Besides providing the best digital platform for comic book publishers, creators and readers? We are focused on just that. What will that mean in 1 year or 3 years? That we will spend a lot of time learning from our community about what its requirements are. We have already learned that the comics community is not a monolith of a certain type of user. Comics are reflected in everyone, and so we are focused on creating the best experience that everyone can enjoy.

That being said, my three year plan is to help creators and publishers understand the potential of the digital platform and truly maximize their efforts. The digital space allows for so many interesting applications of a creators work, I truly believe that creators who dive into digital and embrace the potential, will experience amazing success.

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What’s the most effective way of making fairly-accurate financial projections to prospective investors at such an early stage?

Accurate? Well, thats probably impossible. The truth is that any financial projections you provide are most likely suspect at best, complete misses at worst. Whats important is to show that you have thought about the process. What are your potential revenue streams? How are you going to prioritize them? How do you integrate your financial goals with your business and technological goals? Make sure you are looking at a three year period and make sure your numbers see a sharp increase at some point in year two.

But mostly, just understand all the potential ways you can make money, and think about how you are best going to attack them. Then create a chart. Maybe two. (I like a chart that outlines revenue projections and another one that outlines revenue sources).

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What other advice would you have to budding entrepreneurs about getting seed investment for their startup?

There is a certain allure to raising capital. A young entrepreneur needs to evaluate the needs of their business, especially where in the life cycle the business stands. The longer one can go without seeking institutional funding, the more of the company they will retain, and the more value the company will create.

That being said, there is always a point in the growth of a business where the application of financing is like the addition of kerosene to a small fire. If you time it right, you can use the funding to accelerate the business in ways that a self-funded company just can’t do.

The best advice I can give around getting funding is to research, research, research. Find the firms and partners that are interesting. Then ask, ask, ask. Find everyone you know who might know someone either at that firm or connected to the firm, and with a succinct, well thought out email, ask to be introduced.

Once you get the meeting, make sure to have a solid pitch deck. It should explain the problem you are attempting to solve, why you have the best solution, why you are the best to solve it, and how the investors can see a return on their investment. Use the deck to drive the conversation, but don’t rely on the deck to make the conversation.

You can follow Graphic.ly on Twitter along with Micah Baldwin and Kevin Mann. Micah also recommended reading a post on his blog about his fundraising efforts, it’s in-depth, well worth the read and can be found here. Thanks to Micah for his time and I wish Graphic.ly every success in the future.

Thanks to Reflect7 & The Windows Blog for images.

Matthew Ellis is a Co-Editor of Fuel Your Venture. As an aspiring entrepreneur, he eats, breathes and dreams about business and web startups. You can follow him on Twitter at @mattrepreneur and @fuelyourventure.

 

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