“We have discussed this internally and we would be interested in investing in Cabsguru at a $1 million Pre-Money valuation, you can let us know if you both would like us to be your first investors,” said one of the three guys standing up and shaking our hands while ending our conversation at the Atrium Coffee Shop in DLF Emporio Mall, New Delhi.
On our way out of the mall through its glorious alley, it took us some time for the feeling of those last words to fully sink in. We had just received an offer of investment at a million dollar valuation for a hack that was started as a hobby. Wow! Isn’t It? We had been in discussion with these three gentlemen for the past two months. Seasoned and successful entrepreneurs – all three of them, sharp minds and masters of their fields. Combined, these guys had been entrepreneurs longer than my co-founder and I had been on this planet.
It was a matter of great honour for us to be associated with them. So when were we going to sign the term-sheet then? Well, we didn’t. Strange? Well, maybe! But how can one be so sure? Entrepreneurship like everything else in life is about experimenting. It’s about continuing to throw piles of dirt on a clean wall to see which one sticks, and it’s about not stopping until one pile of dirt actually sticks -- Your One Big Idea. Or it can be about taking a glue stick and trying to make that pile of dirt stick to the wall -- grain by grain -- persistence as the dictionary calls it.
But even after you have managed to get the pile of dirt stick onto this famed metaphorical wall, there comes a time when you can either grab on to what comes your way to grow that pile, or you can decide to wait and discover whether you get what you always wanted. The question you ask yourself now is not whether you want to leave your monotonous job and start your own venture -- you have already taken that leap long time back, you were courageous enough to follow your dreams, and you displayed the self-belief of being able to create something that would change other people’s lives for the better.
The question that bothers you now is whether you should settle for something lower than what you had expected to grow that pile into and make a bigger mark on that metaphorical wall? My co-founder and I were in the middle of a similar discussion on our call that night after coming back from our meeting at DLF Emporio Mall.
We both knew we could fund Cabsguru’s daily operations from our pockets. We were spending $20 per month on Cabsguru to pay for our servers which supported our 500 new users per day who were joining in organically and another 60,000 users who were already using our platform. All this with zero marketing budget. Apart from these 20 dollars, the only money that we guys were spending was on coffee and food that we ordered when we met to discuss our plans.
What we were offering our users was a totally different story. Cabsguru was saving them thousands of rupees and hundreds of hours in cab booking time on a monthly basis. “So what do we do with this million dollar hobby of ours?” was our dilemma. A very rare founders dilemma I must admit -- take what was on offer, or stay hungry and be foolish enough to let the money slip by. My co-founder was involved in a day job which supported his family and I have had a lucrative offer that had been on the table ever since I sold off my stake in my previous venture, an app called Unlockar.
The thing was, time. Time as well as timing. To join or not to join? With both of us getting involved in our day jobs, would Cabsguru continue to remain more than just a hobby? Our idealistic self-beliefs and courage were slowly starting to give way to more realistic actual world realizations which required some tough choices. But these choices were not the one of survival, of course if we could survive the vagaries of Day Zero of our ventures, we could grow much faster in an environment where we had become a million dollar company and had the backing of people who were much more experienced and networked than we were.
This choice was of how we wanted to see ourselves 10 years down the line -- whether in 2025, we wanted to be holding a considerable stake in a billion dollar Unicorn or regretting that we diluted too much equity too soon just because we could not hold on to our baby till the time and valuation was right.
Suffer today to enjoy tomorrow as some would say, but this metamorphic today may not see its dusk for a very long time. The wait for the dawn of this enjoyable tomorrow comes with a risk of getting superseded by our fellow startups’ advancement across the funding stages ladder, while we are stuck in the today trying to figure out whether, of all our million dollar ideas, the choice of holding on to this idea is actually that good an idea?
But there's always the other side of the equation. We don’t know what will happen to Cabsguru tomorrow; whether we will become what we strive for today or would this hobby die down and give way to a new million dollar idea – I will surely keep you updated on the same. But one thing that we know is that you should not undersell yourself.
A lot of things and market conditions have to conspire and come together before magic can happen and you can give birth to a Billion Dollar Unicorn. Your startup is your magic, don't let go of it cheap. Being greedy and protective when it comes to your magic can be a good thing.