9 lessons I learned from raising 1.5 million for my popcorn startup Popsmith

In December 2022, we closed a friends & family seed round for Popsmith , raising $1.53 million from 84 investors in under 45 days during arguably one of the worst times to raise money since 2008.?

I've founded several companies over the past twenty years and this was my first time raising money.

Here are 9 lessons I learned:

1. Keep Your Pitch Dead Simple?

Our deck opened with one graphic titled “If You Read Nothing Else” where we summarized who we are, what we’re building, what we’re asking for, and why you should consider investing in a simple, straightforward manner.?

2. Branding & Research Matters?

We spent a year coming up with our brand strategy, identity, color palettes, values, and brand promise. We spent hundreds of hours researching our core audience and what motivates them to buy.?

We know who we are, why we exist, who we are selling to, and how to speak to them.?

3. Raise More Than You Think You Need

Marketing, inventory, labor...everything’s expensive. Your money will go a lot quicker than expected.?

Our target was $1 Million but we ended up raising 50% more.?

Yes, it meant further dilution but we ultimately decided it was safer to have excess funds in the bank.

4. Set a Funding Goal That’s Lower Than Your Stretch Goal?

Our stated target raise was $1 million but our? internal stretch goal was $1.5 million.?

When we first opened the round, we had an initial wave of interest but the commitments quickly slowed (and I low-key freaked out).?

I went into full blown sales mode: I took calls and more calls, I pitched, I emailed,? I texted, I followed up and followed up again.?

The first 500k was definitely the toughest; I willed my way through it.?

Once we reached half a mil, I notified my prospect list that we were 50% funded which caused an uptick in participation. I communicated the same at 75, 80, and 90%.?

When we reached $1 million, I notified my entire list that we were now fully subscribed but I decided to extend the round by a week to raise additional funds. The response was swift: $500k came in within days and I ended up turning a few investors away.?

People want to participate in something that other people have validated. FOMO is real.?

5. Say “I don't know” when you don’t know

I took many calls from prospective investors who asked excellent questions. I knew the answers to most, but some questions stumped me. Investors come from various backgrounds, have different approaches to risk, and can see different problems in the market.?

It’s okay to respond with “Great question- I dont have an answer but let me get back to you”.?

Then do exactly that.?

You’ll foster confidence and trust in investors by keeping it real.?

6. Don't Take Rejection Personally (even though I did)?

96% of the invested dollars came from my personal network.?

Having friends bet on you is a magical feeling- one of the best highs I’ve experienced.?

I’m embarrassed to admit it but I was a bit hurt when a few friends said no. My inner dialogue went something like:?

“Dude! You know me well! You know my track record of success! You know I’m going to fucking kill it for you! You’re really passing on this?? C’mon!!”?

After giving myself space to feel my feelings, I reminded myself that I really have no idea what anyone’s financial situation or goals are.?

This opportunity might seem like a winner to me but risky to others. Maybe they have better investment opportunities elsewhere. Maybe they have family obligations. Or maybe they’re in a place in their lives where an investment like this doesn't make sense.

Best to respect their decision, move on, and not take it personally.?

Use that rejection as fuel.?

I’m now more motivated than ever to crush this business for those who bet on me. I’m hellbent on 10x-ing their returns.?

7. Set a Lower Investment Minimum?

I set an abnormally low investment minimum of $2,500. I did this for three reasons:

a) This was the first angel investment for some friends & family (including my and my co-founder David Stickland mothers!) and I wanted to make it as inclusive as possible while minimizing their risk.?

b) Every investor will get a free popper and will be our OG tribe of Popsmith enthusiasts, helping to spread the word through their various socials. Every bit of promotion helps. (same logic applied to our decision to launch on kickstarter)?

c) We gave all of our vendors and contractors an opportunity to convert a portion of their fees into equity. A lower minimum made that decision more palatable. Now we have contractors thinking like owners.?

8. The Quality of Your Relationships Matters?

I’ve been actively involved in various business organizations for nearly 20 years including Entrepreneurs' Organization , Million Dollar Sellers , and eCommerceFuel among others. These groups exposed me to a high concentration of extremely smart, successful, and decent entrepreneurs who were instrumental to my growth and success.??

Community and giving back is important to me.?

I have served on boards, spoken at events, taken hundreds of lunches, thousands of calls, hosted in-person dinners/meetups, and participated in podcast interviews. I lead with curiosity, openness, and vulnerability. I am generous with my time, my most precious commodity.

I’m a deeply caring and involved son, friend, and brother. I show up for people in my world.?

When it came time to raise, I had a strong network to rely on. I’m a known and trusted person among my peers which made their decision to invest in me easier. Several friends told me they would invest blindly in anything I did (brought me to tears!!).?

People bet on integrity and trust above all else.?

Bribery with popcorn helps, too.?

9. Go All In On Yourself?

I came from an uneducated immigrant working class family. We lived in Coney Island government?subsidized housing for the first few years of my life.?

My parents divorced when I was young and we fell into poverty.? We had no health insurance and we shopped with food stamps.?

My mom was left to raise two young boys essentially on her own with very little support.?

She did everything she could to make ends meet, cutting hair during the week and making/selling jewelry on nights and weekends. I spent many late nights alongside her, piecing together earrings and pendants on a folding table in our tiny apartment.? We would wake up pre-dawn every Sunday and drive to the local swap meet to set up our booth and sell our goods until sundown.?

We were homeless for a stretch. My kid brother and I slept in sleeping bags on my mom’s hair salon floor while mom took?the couch. We showered twice a week at a local hostel. Meals were either fast food or cooked in a microwave.?

I had a very low sense of self worth growing up.?

I was overweight and debilitatingly shy. I had few friends and very little guidance. I was bullied and teased incessantly. I was largely ignored, which stung the most.?

I had to learn self reliance early. I discovered a knack for business at a very young age.?

I started selling gumballs at school when I was 12 years old. I traded sports cards, delivered pizza, worked fast food, waited tables, sold used cars, flipped burgers, and ran a vending route. I put myself through school and was the first in my family to earn a college degree (and a high school diploma).?

Work became my salvation and I slowly built myself up, mentally and financially.?

I started Gumballs.com when I was 21 with $2400, my entire savings at the time.?

My kid brother Ron gave me $1700 to help out, nearly everything he had, and against my wishes. I cried when I got that check.?

My initial financial goals were humble: $3k per month profit, enough to cover my basic living expenses including a $10/day food budget and rent for the trailer I was living in at the time.?

My goals (and my self confidence) grew as my business grew. 100 hour work weeks were the norm.?

My new goal was to become a millionaire by the time I was 30. I got there at 26, yet still felt like I had more to prove to myself.?

I went on to found a half dozen additional? businesses, all 100% self funded. Some failed, some succeeded.?

Life and business can beat you up. Developing a tough skin while maintaining a soft heart becomes essential.?

Where I’m at today is the culmination of a lifetime of learnings, pain, therapy, self exploration, coaching, failures and triumphs.?

Many men suffer from imposter syndrome, including myself.??

Through patience and grace, I slowly realized that I am no longer that scared little boy who no one paid attention to, ill-fated to follow in my father’s footsteps and transgressions.

That I’m a competent man, worthy of love and support, and capable of leading a team towards success.?

A few years ago, I divested myself of all of my businesses to go all in on what would eventually become Popsmith, investing millions of my own capital.?

I wouldn't ask my friends and family to bet on something that I’m not willing to make a big bet on myself.??

People have asked me, why raise money??

Between my own capital and debt, I didn't need to.?

I chose to do it, in part, to mitigate risk. But the larger reason was that I was excited to have my closest friends and family alongside me on this journey. I wanted us to win together.?

Can Popsmith fail? Definitely.?

Business is hard. A lot can go wrong.?

But I deeply believe in Popsmith, the incredible team we’re building, and in myself.??

I think we’re stacking the odds heavily in our favor to win.?

And if everything goes to shit, I have my marginal hip-hop dance skills to fall back on. Drizzy if you reading this and need backup, call me ????

Tal Moore

Founder & CEO Popsmith.com

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PS: We launched our Kickstarter this month and its off to a strong start! Please support and share!