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About the Episode
Today’s guest started his recent company by raising funds through an IPO. I didn’t even think that was possible so I asked him to come on and tell us how he did it. Also, if you’re running an agency, then listen to his story and the key lessons he learned from running two separate agencies of his own.
Raising Funds Throughan IPO
Big Rock’s co-founders had to first raise the initial capital of 300k to meet the requirements of taking the company public and to pay the legal fees. The whole process, from incorporating to having their shares traded to the exchange, took six months to complete due to the paperwork and the approvals but they still went through this route to provide their investors liquidity and to do what they please with their shares. Typically, when you invest in a startup, your funds will be stuck there unless you find someone to buy your shares, but with publicly traded company, your shares can be sold electronically worldwide. Another reason why they didn’t go with traditional fund raising was to gain access to capital markets that may not be typically available to private startups.
After their first year, they were able to raise additional funds which would have not been possible if they stayed private. Karl advises that if you take the same route, you need someone who understands capital markets to lead you through the process, steps and legalities as it is not easy to do.
Key Points in Running Your Own Agency
One of the low points in Karl’s career was running an agency where he was figuring out everything and the key lesson he came out from the experience was to accept the fact that there will be lots of challenges as you are dealing with different personalities. This will affect your business and you will be far from being comfortable but in the end, it is still worth it to go out on your own and see what comes out of it. In addition to this, he shares that what will help you and your client is to ensure transparency and setting right expectations to avoid conflicts down the road.
What advice would you give to anyone looking to build a mobile app?
Start with educating yourself on the process of building an app as it is not easy to do and focus on your business plan and the planning of your actual app as a lot of apps miss these steps just to get the product out.
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