Ben Johnson is the CEO of Particle 41 and a serial entrepreneur who’s raised $35 million over the course of his career.
Ben founded Legal Inc with his co-founder and friend. They’d grown quickly, had an aggressive roadmap and sales coming in. But the investment made into scaling their sales team had left them close to the red zone. They needed funding — fast.
Ben was in danger of needing to “clipping the trees” and scale the business down to survive. But they took the risk anyway.
They had an investor who was willing to take 50% of the $2 million round — already confirmed.
Legal Inc had debt. But their take on the industry was promising.
However, despite that, the investor’s bad experience with previous companies had left a bad taste in his mouth.
It was a risk he wasn’t willing to take. Even if it was written into the contract.
At the last minute — he backed out.
The tree clipping suddenly got a lot closer…
If they didn’t find an alternative in a month, the doors were closed.
The grassroots fundraising pipeline
Ben and his co-founder worked locally. And did their research on investors with a grassroots fundraising approach.
He had built a strong pipeline. Starting with angel investors, Ben had worked his way up to the Fortune 500 around Dallas only. Meeting in person was important to him.
And from this longer, more targeted approach, their investment deck was refined to the requirements of investors in the area.
They’d worked hard to build favourable relationships in this way.
So, although, the situation was critical. They had options.
Ben knew that the product they had at Legal Inc was different. And they were in a position to accelerate.
In an industry where businesses were playing small, they wanted to go big — and that was special.
But they needed this funding to make it happen.
While Ben’s co-founder was booking call after call shaking up cold leads Ben was in survival mode. Deciding what would need to go and how they would operate to keep the business afloat in the worst-case scenario.
In this episode, he discusses
- How the grassroots fundraising approach helped their business to grow
- What the result was and how founders can do the same
- What “clipping the trees” looks like for founders today
Ben goes in-depth about his strategy, pipeline and the finer details of fundraising and investor relationships. Offering valuable information for those in similar positions today — tune in!