Why I Invested in EverTrue

evertrue_logo_stacked_gray

I recently got pitched by a second-year MBA student with a week-old idea, no team, no track record, not even a logo…and he wanted to raise $1mm on a pre-money valuation of $8mm “because that’s where SVB tells me deals are getting done.” I stopped barfing long enough to chew his ass out. And then I thought, why can’t more companies be like EverTrue?

EverTrue is one of 11 companies that came out of the 2011 TechStars Boston class.  When I first heard their story, I was unmoved; I would have been very surprised at the time to learn that I would invest in a company that seemed to have no barrier to entry, no special technology, and no track record of successful startups. But boy, am I happy I took a second look.  This is a story about a team with exemplary execution, follow-up, grit and vision. I’m not going to go into their product, but rather how these guys won my heart and my investment.

Here’s how it happened.

On the first day of each TechStars session, most of the mentors are brought together to meet with the teams. TechStars, unlike most other accelerators, is all about pairing mentors with the new companies.  So what ensues is akin to your first freshman orientation party at college, full of discovery, speed conversations, and beer as people seek out other attractive people of their ilk.  Mentors are encouraged to pair off with one team and dive deep, but I wasn’t finding a perfect fit. However, I saw several companies who I could help, and I figured I would do as many favors as possible—just that there wasn’t necessarily a good fit for me in this crop. Accordingly, I arranged for a bunch of introductions where I could with potential customers, connections, VCs, etc.  Since EverTrue already had a Massachusetts boarding school, Middlesex, as one of its two customers at that time, I made a warm intro to my daughter’s boarding school, and then asked the school to tell me what they thought of the company—the product, service, salesmanship, etc.  Same as I would do with any other lead.

Two days later, I got an email from the Director of Alumni Relations at the school. “I’ll be blunt,” it read. “This is the only useful app I’ve seen.  They seem to really have the user experience in mind and understand the user’s needs and how they would use a tool like this.  Everything else I’ve seen is sold as a tool for a school to push out info without…thoughtfulness for why the user would use the app…. The seamless integration is especially attractive.  I’m genuinely excited about the potential to work with these guys.”  Wow, I thought. That was a strong signal.

The Alumni Director told me it was OK to pass his review along back to EverTrue. When I called Brent Grinna with the positive feedback, he confirmed it was a solid meeting, and he had a request: he knew that I had invested in a company that had been bought by LinkedIn. Could I provide an introduction?  That was a clue to me that Brent was my kind of marketer. In the midst of all of the hubbub of starting the TechStars program and meeting potential mentors, he had done his homework by researching me—and probably the other 79 mentors as well—found out I had a blog, read it, and extracted the right connections (which I hadn’t thought of, even when I was looking to give out intros) that could help his company.  Chalk up another strong sign that this company had some potential. I wondered what they would do with that lead, and then gave him two more school names I had attended, my alma mater as well as my son’s.

On my next visit to Boston the week after, I met up with the two others on the EverTrue team at that point, Eric Carlstrom, (the technical co-founder) and Jesse Bardo (the sales guy, who had excellent connections with boarding schools.) Eric installed a beta app on my phone so I could play with it and get more familiar with the product, while Jesse let me sit in as he was making an initial call to a potential customer. In a good sign of humility and coachability, both asked me for feedback, and when I gave constructive criticism, they thanked me. Jesse additionally asked about my connections to colleges around Burlington. As I began to get a sense of their business, I asked why they weren’t just totally dumping boarding schools, on which they then had a greater focus, instead of going straight to the largest colleges, where there was potential for more revenue.

They respectfully responded by saying they were indeed going to be going after colleges (and had a few irons in the fire), but that instead they were going after boarding schools first, for three reasons: first, Jesse already had strong connections with many of the people in the boarding school circuit. Second, they had access the API for the main provider of IT services for boarding schools, which would make integration much quicker and easier. (Just as my daughter’s alumni director had mentioned.) This meant that they had more capacity to bring boarding school clients online, and they could do it more quickly. Third, installing their product at the high school level meant that they instantly had a product that would seed out via the heaviest users and create demand for a similar product at that user’s college.  What did I take of this? Add up another plus for EverTrue: they had already thought through various target markets, and had taken the one that would bring the quickest growth, even though that was not the obvious one. I also liked that they heard me out to see if I had stumbled across an angle they hadn’t considered. I began to think more about spending more time with these guys, so I started doing a little homework myself.

I talked to Brent to hear his story, and it was a doozie. First member of his family to go to college, recruited to play football. Ended up as captain of the football team at Brown (I noted leadership qualities and past success, in spite of my generally preference for repeat entrepreneurs with a previous win under their belts.) Brent showed his appreciation for his scholarship by raising money for Brown (whose fight song is “Ever True to Brown” hence the company name,) where he encountered first hand the pain of college fundraisers—and for which EverTrue was his solution. (Good first hand experience with the market, like the fact that he was experienced asking for money, since much of what a CEO does is sell to customers and raise money from investors.) Went from Brown to an investment banking job at William Blair, which then led to a job at a private equity firm, Madison Dearborn. (Whoa! So he’s got some experience in finance—he’s developed personal connections for high level rainmaking.) Married his hometown sweetheart from back in Iowa (EverTrue!) and moved back East to Harvard Business School. (OK, I got turned down there, but I love finding guys way smarter than me) and was so driven by his entrepreneurial calling that he didn’t pursue the big paying jobs on Wall Street or private equity that would have been easy for him to land.  That is a big investment from an opportunity cost point of view, especially for someone with student loans. He was committed.

Brent Grinna pitching at DemoDay 2011

The next day Brent called me up to tell me they were pivoting. Why change course when they already had momentum and seemed to be nailing product-market fit? The answer: in the course of their work putting installing their third client, they found a bigger need, with an even bigger market than that for higher education, which by itself is large.

He also had good news: they were among the first companies to get a special access to LinkedIn’s API. “Great!” I said. “Was it my introduction to the CardMunch guys that got you in?” He replied that the CardMunch connection had been terrific, and that Sid had been super-useful in talking through data processing issues, but that actually the connection had resulted from a B-School acquaintance. This time, I was blown away. Not only were these guys executing strongly, but they were taking no chances, approaching business targets from all available angles.

I played ping pong with the guys, and watched their camaraderie. They were fun, they worked their tails off, and I decided to focus on them as a mentor.  But that still didn’t yet convince me to write a check.

That next week I traveled to Cleveland to visit my folks, and stopped by my old high school. The head of development there was a fellow alumnus just two years behind me in school. I asked him about EverTrue and its competitors. Just as before, he confirmed the need in the market and the superiority of the EverTrue’s offering (that is, the v1.0 model.) He was going to be signing the papers the next week.

Calling back to EverTrue, I learned that my alma mater had plenty of company from other schools signing up. Only one school they had talked to had said no, and that was one where they had experimented with a different pricing model. (By the way, that no turned into a yes.) And my son’s school had also signed on. Even better, the average school was saying yes in under 4 weeks, and they had a pipeline getting backed up from schools looking to get going.

This sounded like a case of being careful for what you wished for. How were they going to handle the installs? They were looking to hire new programmers, but for now, Eric was not able to focus on any of the new development, since he was flat out installing the new customers. They were interviewing, and had a few good candidates. The problem was the viciously competitive market for technical people, especially in Boston, where growing powerhouses like Hubspot were offering $10,000 finder’s fees and bonuses for new programmers. It was going to be really hard for a startup to compete for talent, especially a startup that hadn’t even raised money yet.

While my fears were well-founded, they were quickly rendered moot. EverTrue landed their first choice programmer, with all of the background they desired, within a few days, and went on to add another programmer before the three months of TechStars ended. Since the team matters more than anything to me, that ability to recruit was a critical last bit of information for me.

At this point, it no longer was a question if I wanted to invest in them as much as if I would get a chance to invest. In the three months from the start of TechStars, they went from two clients to 20, had established recurring revenue, and got commitments for $750k from accredited investors before they even had made their public debut at DemoDay last Wednesday, and were saying no to VCs (wanted an angel only round) and the press (didn’t want PR before their time.) After DemoDay, they were over-subscribed and could have raised their price dramatically, but they stayed EverTrue to those who had shown early interest.

There’s a bunch more I could tell, but you get the point. Most of the time as an angel investor you hear a story, perhaps get a little due diligence in talking to other investors, and make a decision. As a mentor, I was able to get a ringside seat to give me a better appreciation of the companies than I ever could have gotten via standard routes. (PS—also invested in Kinvey, another awesome team.) To use the overworked marriage metaphor, you have to look deep inside a company to be able to judge whether they are a keeper.

This all happened a year ago. And in that time, EverTrue’s growth has just kept climbing. In 5 years, I’m guessing that they will be one of my best performing investments. The moral of the story: ideas are cheap—it’s execution, execution, execution. Or as Brent knows, blocking and tackling. If you want to win an angel’s heart and wallet, show them performance.


8 thoughts on “Why I Invested in EverTrue

  1. Christopher Mirabile Reply

    Brent had you as soon as he showed that pig photo in his pitch!

  2. Chris Reply

    Great post Ty! I would say there is plenty more to take away from this story than execution, execution, execution. My only question is how did they pivot? Seems like they simply added functionality on the administrator end more than they shifted to an entirely different product.

    1. Ty Danco Reply

      It wasn’t a full pivot, but emphasis went away from servicing the alum–although they still have all the functionality from before, to providing not-for-profits with donor intelligence. First market was big, the new one is enormous.

  3. […] Do your homework on the mentor in advance. In order, I check out LinkedIn, then AngelList if they ar... tydanco.com/2015/06/11/6-points-for-mastering-meetings-with-mentors

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