First Year of Building a Startup and Raising $1.3M

Right after I graduated from UCLA, I joined the edtech startup Everydae. A year later, we raised $1.3 million right when the pandemic hit and left the world in chaos. This is our story.

⚡ To reach out to me: twitter.com/ZaurbekStark

The startup: www.everydae.com/
2nd round of our crowdfunding campaign: wefunder.com/everydae

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▬▬▬▬▬ THE STORY ▬▬▬▬▬
After I graduated from my masters in Electrical and Computer Engineering at UCLA, I joined the founding team of the edtech startup Everydae. It was very early stage, we just had a team with a vision to help students ace high school, but didn't have no product yet. So first thing we did was a lot of brainstorm sessions to find a concrete product idea. We had so many ideas flying around, all the walls in our office were filled with post it notes.

The problem though when you spend too long brainstorming is that ideas just stay in the air. I felt we needed to move. So I proposed a plan to our CEO: give me 1 week, and I will code and design a quick prototype for us. Based on what we discussed before, I already had a rough idea of the app I wanted to built. I did some research on the UI/UX of different apps I liked, and then drew some sketches on a piece of paper. I started building a basic prototype with the minimal features that I can demo to someone and get feedback. This gave us some momentum.

We then started working with a pilot group of students. We took and digested all the feedback they gave us, and decided to completely rebuild our app into a new superior version: Everydae 2.0.

We also understood who our anime villain was for this first arc of the story: the tutoring industry. That's the industry we wanted to disrupt. Prices are through the roof and most families can't afford it, so they fall behind on those competitive college entrance exams. We transformed our app to essentially become an affordable digital tutor in your pocket.

Around 6 month in the story, we were ready to launch our beta to the world. We only had one course at the time, it was SAT Math so we made it free and were marketing it through Instagram ads.

Now we wanted to accelerate our growth so we tried what every startup does: raise capital. We wanted to raise $1M, so we spent 2 months chasing all the VCs we could find, scheduling meetings, pitching our company. But we realized, there was a problem... it won't work. The thing with VCs is that they will only invest in your company if they see traction, like a solid user growth for example. We didn't have that yet.

We had to figure out a different way, and we had to do it fast... and thankfully we did: Equity Crowdfunding. You probably heard about crowdfunding before through platforms like Kickstarter. Equity Crowdfunding is similar, except instead of investing in a project to get a little t-shirt, you are actually investing to get a little piece of the company. So now anyone can become an investor in a startup.

At the same time, an unprecedented event happened... Covid.

Our entire company moved remote overnight, and we hadn't finished running our campaign yet. We were roughly at 50% of the amount we needed to raise and the campaign was about to end. On top of that, the only course we had at the time was preparing students for the SAT exam which got cancelled everywhere. It was supposed to be our beachhead market. At that moment, our story was close to its end.

However, we kept pushing. We doubled down on our marketing efforts, until one day, we saw something change. In the last days of our campaign, things started to catch up. We reached $600k, then $700k, then $800k. It amount kept increasing! The campaign was going viral! We ended up raising $1.3M in equity crowdfunding right when covid hit.

What happened you might ask?

Well paradoxically, covid played in our favor, because even though our current product was preparing students for an exam that was cancelled, our future vision of a digital tutor, that underlying technology we built, made even more sense now that everyone was stuck at home. So more people wanted to invest. Then that extra momentum we got, combined with all the marketing efforts that we were already doing, close to the end date of our campaign, created a natural inertia. As investors saw the amount increasing, they got afraid to miss out on a good deal, so they started investing more, which pushed even more investors to invest.