Investors invests in founders first, companies second| Aaron Hubbard

I did a round. We've been doing fundraising for the past six months, and my first VC meeting, I had no idea what I was doing. I mean, I did all the research. You know, I did my nice pitch deck. Like it looked awesome. But how can you say you're out to change the world when you're a me too product? You know, I don't consider my company a me too product, but there is there are coffee. shops on every single corner in every area of the country. So it's kind of me too. But investors invest in founders first and then businesses second. Luckily for me, my industry— coffee is the second largest commodity in the world. There's a lot of coffee out there. It's right behind oil. It's traded on crazy levels. So people see value in coffee. There's a big company we all probably know, Blue Bottle coffee. They were just acquired by Nestlé, which is crazy, for a ridiculous value. They started at the Oakland Farmers Market. And I have no idea how they proved to investors that they were worthy of it, but it's happening.

Do you think that in your case, or maybe someone else who are doing similar businesses, when people thinking of investing or being an investor, Yeah. They more see the wedding in person and then, you know, they have a business for a second.

What do you think? I think so. Yeah. I think it's the founder first and the team. I think investors want to invest into the founder, his ideas, her ideas, and then the team that they've built and the traction that they've created. That's what I learned and that's what I'm doing now. You know, it's like When I started my business, I didn't start it for anyone else except for me and my neighborhood. I was like, I want to create an awesome coffee company. We want to serve the best coffee in the neighborhood. We want to build it out to be this beautiful thing. And we did. I mean, we built it by hand. We've got awesome concrete countertops. And so the aesthetic of your brick and mortar is very important to draw people in. But another reason I did it the way I did was to say, hey, look what I did. Like, we built this by hand. I can walk you through my shop and say, we put the concrete mixer here. We built the foundation here. I was in there sanding down floors. And so proving that work ethic. But I didn't start my company to seek out investment. And that's probably something that's a little bit different for a lot of you here, is that I started a company to be small and manageable and—

Personal.

provide fulfillment for me and the people around me and my employees. And so there's different scales of business. And I think that's what is kind of cool. And that's why I accepted the invite to come here was just that I'm probably the lowest impact entrepreneur that you're going to hear from this semester. And that's okay. Because you can start a business for you. And the people around you. It doesn't have to be this global thing. It can be. It totally can be. But little impacts can create ripples that change the world. So in my neighborhood, that's what we try to do. We just try to provide a space. It also kind of doubles as a coworking space. So I have startups that come in, and they do work in my shop. And hopefully it provides them a safe, free space. You know, as opposed to like a WeWork or other coworking spaces to kind of get the idea rolling. You know, kind of brainstorm. It worked out. But then you get to the point, a year and a half in, where you're like, I need to grow this thing. Like, you know, we're paying the bills. We're paying the people. It's going good. But you want more as you go. So, that's what happened to me. So, we decided to seek investment. I had my first investor pitch in May of this year. And I was asking for $1.5 million, which to me is a lot of money. I was like, I built my shop with $125,000 and started my company with $125,000 I borrowed. And 99% of that's paid back already. So I don't have anyone coming to me telling me what hours I need to be open, what I need to be doing, what growth projections I need to be on. I don't have that because I decided to do it independently. And you can too, depending on your business, especially yours. I mean, that's something you can own and work hard at. And it's going to be hard to do. You're going to have to learn how to negotiate a lease and build a team and find the right people. Because to do the impact that you want to do, you're going to need resources. So you are going to need investments. So, yeah. Definitely don't do it the way I did it. Grassroots. But, yeah. So, I had my investor pitch. I was asking for $1.5 million. To me, that's a lot of money. And to this firm, the answer I got was, that's cute. Because it was nothing to them. They invest anywhere from $10 to $20 million.

But literally—

Oh, that's cute, is what I heard my first time. So now we're asking for more. Now we realize there's more money we need and there's reasons for it. I was just ignorant to the needs and how much influx of investment that you need to be successful. So you learn. But definitely there have been failures along the way. And you just have to be ready for that. And life in general is hard enough. Life as an entrepreneur is going to be even harder. So, you know, when bad things happen or when tough— you go through tough times, you know, you just want to be set up and know yourself and be the best you you can be so that when those things happen, you're ready to, you know, get through that struggle. And hopefully you're surrounded by people who care about you and love you and want you to succeed. Luckily for me, I've got a great team of people. I can, you know, I started working 7 days a week. 9 to 5 at the shop and then working later to try to learn how to do different things. Now, I'm lucky enough to where I don't work behind the counter anymore. I started this business because I love coffee. I love making coffee. But I rarely make coffee anymore, which is interesting. Usually more in design and creating new packaging and new things. When I started the business, I just wanted it to be enough for me to sustain my life. Now, I'm hungry. I want to go— I want to get more. I want to build a business. I want to create more jobs. I want to create— our culture in our shop is just awesome. It's not corporate. There is no corporate structure in my shop. Our biggest goal is to make better coffee. And that's what we set out to do.

Great.

And so, with that, you know, goal, it's something you can achieve. But we've been lucky enough to serve coffee to a lot of really important people. So, we've created partnerships with companies like Twitter, NerdWallet. We've brewed coffee at Pandora. All these different tech campuses all around the East Bay. And that's provided opportunity to meet people and create relationships that we can continue forward. Our biggest thing going on right now is we were just accepted into a program called Amazon Launchpad, which is for startups. They basically provide resources for startups like mine who are limited in cash to basically do your marketing for you. It's still up to you as a company to create the content, because content creation is very important. But it sets you up with the tools to succeed. And so we're really excited to jump into that. With that came some challenges as well. We had to do a package redesign in our coffee. When I first created our logo, which is this guy here— it's pretty simple— a friend helped me out. He's a designer at Google.

Oh, cool.

And he's like— he believed in what I was doing. He was a customer of mine. And we get to talking. It's like, oh, it'd be really cool to do this. We spent 4 months going through so many different fonts and colors and all these things to come up with something so simple. But it's created impact. And it's worked out for us. But yeah, basically, you want to just— Work harder. So like maybe 1% talent, the rest of it's perspiration. Like you have to do the work. You have to wake up and do the work. But yeah, basically, I mean, I want to open up any questions to you guys too. Anything I can help you with. If anyone's interested in independent business, starting an independent business, I can definitely help out there.

Global corporate That?

No, I'm not the guy. But if any— if you or anyone else has any questions, feel free to speak out. Thank you.