High Margin was incorporated on December 9, 2024. The idea was to #bootstrap the company to profitability by January 31st, 2025. But the only certainty when launching a #startup is that there is no certainty about anything. It was a long shot that we could close deals and have revenue coming in within 53 days. It’s day 53 and I believe we’re close.
Last weekend I decided that with the #momentum we have building, it wasn’t worth the risk of running out of funds. I decided to start #fundraising to have a safety net: A plan to build our product, even in the unlikely event that all of our potential short-term deals fall through. The immediate interest was greater than I had anticipated.
I asked myself what would I do if we get commitments from investors and then close the deals we have in the pipeline? The conventional response would be “Well you’re not obligated to take the money.” True… but I don’t do “conventional.” I believe that I owe these people for believing in me and for jumping in so quickly. I need to show my gratitude for that.
The day I started High Margin, I reached out to a group of about 20 investors that had invested in a previous venture that I led, and I said some version of the following: “I want to thank you for believing in me, and for investing in me. I am giving you equity in my new venture, High Margin, and I am not asking for anything in return.”
Without exception they were all shocked (in a good way). One said to me “This is highly unorthodox and ‘not in market’. But the fact that you’re doing this is exactly why I invested in you in the first place.” I replied, “Well… I don’t really care what’s ‘in market’. It’s the right thing to do and that’s just the way I do business.”
Unreasonable Hospitality should apply to all aspects of business, including how we treat investors. So I’m going to take care of my supporters. If we close one of the deals in our pipeline, we would no longer need the investment. But I’m going to accept the funds from those that have committed by then anyway to show my #gratitude.
This is a win-win. It gives people an incentive to get in early. It also shows people my commitment to delivering a return on their investment. If we close a deal and find ourselves in a situation where we could #bootstrap, then the investors who committed early get a piece of a much more valuable company.
It’s fun to break rules that were meant to be broken.