Jim Cavale (right) with one of his investors (left) after signing their term sheet. (Photo via INFLCR)
*INFLCR is a Proud Partner of FOS.
For those who have started and built successful businesses, being able to take on the ebbs and flows of the process is paramount to seeing success.
Jim Cavale may know this better than anyone else. A multiple time Inc 5000 entrepreneur, Cavale built and sold a sports streaming network, a recruiting technology platform, a national fitness brand, and is now focused on INFLCR, a SaaS company that gives brands the opportunity to store, track and deliver its content assets directly to the mobile devices of the people who are their biggest advocates— what INFLCR refers to as “brand ambassadors”.
An entrepreneur at heart, Cavale has faced ups and downs in both his personal and professional lives, something he credits to building his demeanor he has today.
“My childhood really prepared me well for entrepreneurship,” said Cavale in a sit-down interview with Lars Anderson. “I had a lot of big hurdles to get through as a child.”
Thanks to his previous experience building businesses and a childhood that helped forge his entrepreneurial spirit, Cavale knew exactly what he was looking for in investors when it came time to raise money for INFLCR.
“You are looking for investors who have big connections that can help you grow your user base faster, operations experience in building a company that has created shareholder value and of course, capital,” he said when talking about the balance you need to find between investors who can bring capital to the table or other strategic expertise.
Not only can finding the right investors be a grind, but putting together all of the information together to deliver a compelling offering can be even tougher. A process that Cavale warns can take over your life if you let it.
“The process is intense and if you let it, it will dominate you. It’s already a daily grind to run a business, let alone a startup. Raising money is literally like starting and running a new business at the same time. You have to build the assets of your offering (executive summary, financial model/proforma, term sheet with deal structure, pitch deck, legal documents, etc.) and know them well enough to negotiate with investors who are usually (not always) more experienced than you.”
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For most, raising capital is done to help them build out a team who can help them accelerate their growth, another tricky part founders and CEOs have to navigate while they are raising capital according to Cavale.
“If your capital raise is to bring on talent, you should also be recruiting people simultaneous to raising money. The art of this, is the fact that you’re trying to hire [hopefully] well-experienced folks that you currently can’t afford, so you have to be transparent about the fact that your hiring of them, is contingent upon completing your capital raise. It’s literally a dance.”
While you are dancing, you still have to stay focused on whatever the end goal is that remains. For first-time founders, Cavale recommends looking to a mentor to help guide you through the process of raising funds. No matter how good you may think you might be, or how strong your product might be, having some experience on your side will help you navigate through the sometimes choppy waters.
“Get a mentor who has done it, not only to help you build your assets for the raise, but also to be there as a sounding board as you make decisions and work through negotiations. Be proactive in your mindset.”
“Realize it’s another business and run it like one, with determination, wisdom and perseverance.” – Jim Cavale, CEO, INFLCR
So, where do Cavale and INFLCR go from here now that they are flush with new capital? The plan is to allow the brand to drive increased revenue, build out a team, and take the vision beyond sports into other markets.
“The purpose of this capital raise is to get us from our current revenues to beyond $1M in annual recurring revenue (ARR) and a strong position to raise a Series A growth capital round in mid-2019. Most importantly, we want to evolve our product-market fit and client success processes to a place of sustainability with low-to-no churn (we are in the process of renewing each first-year deal we signed at higher contract values). We also want to start exploring new verticals with exclusive use cases – professional sports, political campaigns, and brands, are all good examples of new verticals we will test.”
Less than a year after beginning the journey that would see him get to this point, Cavale has fond memories of the process, but knows there is so much more to come.
“It took several specific meetings, events, and interactions in the first part of 2017, to get me to a point where I was ready to launch INFLCR in July. At that point, I was confident we could fast-forward to where we are today, but I am also very humbled and thankful that it has actually happened.”
Given the fact that entrepreneurs who have succeeded in a prior venture have a 30% chance of success in their next venture, compared to first-time business owners who have only an 18% chance of succeeding, it would seem as if Cavale and INFLCR are on the path to a solid chance of success.
A former college baseball player, if anyone knows what a 30% success rate means, Cavale has got to like his odds.
“We are doing something very new, and the reality is, to accomplish something that’s never been done, you must be unapologetically determined.”
*INFLCR is a Proud Partner of FOS.
