Announcing our Series A
Dear Avanoo Family,
On December 31st, Avanoo closed a $5M institutional investment round led by Access Venture Partners valuing our company at ~$40M. We also added to our Board Frank Mendicino, Managing Director of Access and Bob Scott, former Morgan Stanley President.
We had the opportunity to receive more — even much more — investment. But we chose to limit investment because, frankly, we don’t need more money. We’ve grown by 30x in three years, and we’ve done it while being cash flow positive for almost two years.
I want to celebrate this milestone by sharing six important lessons I’ve learned in the last few months — lessons that I hope will honor the people and community who have given us an opportunity to make our dreams come true.
1. Our Clients are everything.
Ava in Finnish means “open” and Noo in Old English means “now”. Our vision is embedded in our name: we exist to help people, teams, and organizations open to our greatest potential… right now. In other words, we help our clients build and sustain great cultures.
I’ve always known that our care and commitment to our clients was unique. Yet I never expected those relationships to have an impact on financing. Yet in the last few months, many of our clients — VPs, C-level execs — volunteered hours of their time for investors.
The result: investors saw excitement from clients that is, apparently, very rare. Frank from Access sent me this after meeting with an very well known client: “Wow! She just gave me one of the best references I’ve ever done… and I’ve done thousands.”
2. Our employees are everything.
Avanoo is pioneering an industry; we are inventing a category. The first part of that journey requires persistent founders. But tripling year-over-year for years while being cashflow positive and even profitable — that requires an aligned and inspired team.
We have one of those teams. No weak links. Talk with any member of our team, and you’ll come away knowing at least two things: 1. They care a lot. They want to make a difference. They are here to make a difference, and 2. They are brilliant and capable.
After meeting with our team, a member of a firm we didn’t end up taking investment from — one of the most prominent Silicon Valley firms — wrote in a note to me: “We all agreed you were probably the most passionate and aligned group we’ve met.”
3. Our investor relationships are everything.
Two weeks after Avanoo raised our Seed financing in 2015 with Storm Ventures, the investor who led the deal left the firm. This was big. When Partners leave VC firms, their portfolio companies are often called “orphans” — they don’t have anyone to vouch for them.
Soon after, I talked with Ryan Floyd, one of Storm’s Managing Directors. “You have my support,” he assured me. For the last three years, that’s exactly what he’s given. He’s shared wisdom and feedback, as we’ve built a relationship based around trust and communication.
When, a few months ago, I let Ryan know Avanoo would be raising another investment round, he worked with me to prepare our pitch and our story. And he let me know, before any other investor expressed interest, that Storm would be co-investing — this time led by him.
4. Our cofounder relationship is everything.
I cofounded Avanoo with Prosper five years ago. We started full-time together four years ago. Every year, our relationship has gotten better. Every year, I value Prosper more. Every year, I remind myself that he is, in my eyes, 51 percent of our founding partnership.
I’ve known many entrepreneurs who’ve started businesses with co-founders; most of them break up. It’s just too hard. The secret to our business relationship and friendship, I think, can be summed up in the top two values that guide our working relationship: love and loyalty.
Embedded in love and loyalty, I think, is profound trust — we have each other’s backs. To raise this investment round while tripling sales and doubling headcount this year, I had to at times hand most of my other responsibilities over to Prosper. Neither of us blinked.
5. Our families are everything.
It’s not just founders or early employees that endure the hardships of a startup journey. Our families experience it all right beside us. When a family supports a dream, a mission… anything is possible. Without that support, it’s usually way too hard.
When I had the idea for Avanoo, I didn’t believe enough in myself to get started. But my wife, Nathalie, believed in me… and so did her family. They sold their car to “lend” us the money to start. My mother did the same — and then she even helped support our first customers.
My stories of family support have only accelerated. When I went to raise this investment round, I also committed to visiting most of our clients. Nathalie shrugged and said, “We’re coming with you.” I was gone 90% of Q4. My wife and daughter were by my side the whole time.
6. We have a long way to go.
Avanoo has grown by 30x in recurring revenue and in impact in the last three years. That seems like a lot; certainly it sounds like reason to celebrate. While I have celebrated with our team (I want to honor them!), I feel we’ve barely begun to open our greatest potential.
We’ve proven that Avanoo can help scale, sustain, and reinforce great cultures (and drive ROI while we’re at it). And today, we work with everyone from medium sized businesses to many of the world’s largest brands (Kaiser, Citi, KPMG, etc.).
But that’s just a beginning. What I’m really interested in — what we’re really interested in — is making an enduring, global impact on humanity. And we see the path; but we aren’t there yet. So today, again, we get to begin. Yet this beginning looks different.
(and back to…) 1. This beginning.
We begin with clients that are everything; a team that is everything; a cofounder relationship that is everything; investors that are everything; family that is everything. In other words, We begin with everything. I couldn’t imagine a more amazing way to begin!
Thank you for being a part of our Avanoo journey. I can’t wait to walk and work with you in this newest beginning.
Co-Founder & CEO, Avanoo
Daniel Jacobs is the CEO and co-founder of Avanoo. Daniel’s work has been featured on Fortune, Inc. BusinessInsider, Apple News, HuffPo, and most major news publications in the United States. His company, Avanoo, uses storytelling, micro-learning, and cutting-edge technology to help many of the world’s most prominent brands drive desired change, performance, and engagement at scale and in just three minutes a day.