How Vancouver Tech Startup Shnarped Raised $1 Million Without Venture Capital
By Dustin Sproat for Techvibes
Shnarped is a social platform that connects athletes to their fans across a youth-friendly social media platform.
We started here in Vancouver almost three years ago and recently hit $1 million in total financings to date. Because we did this without any money from venture capital firms, our founder team still owns and controls over 70% of our company. Given around 90% of startups don’t last one year and even fewer raise any significant funding at all, we see this as a pretty big accomplishment.
That stated, we wholly agree that pitching and raising money should not be the primary objective of a tech startup company, as is so oft portrayed in the media (Darryl Kopke and myself have previously debated the pros and cons of pitch-contests and shows like The Dragons’ Den). Every company has different performance metrics, but the old school philosophies of Peter Drucker and the new school lean startup methodologies agree on one important thing: a company’s ability to find and satisfy customers is basically all that matters.
I’m sure there are more efficient ways to raise $1 million, but here is how we did it.
1. Cold, Hard, Cofounder Cash: $35,000 (2011 to mid-2012)
2. Friends and Family: $120,000 of Equity Investment (Summer/Fall 2012)
3. IRAP – National Research Council: $50,000 Grant (Fall 2012)
4. Get Youth Working: $5,800 Grant (Summer 2013)
5. More Friends, Family, and some Friendly Angels: $380,000 Equity Investment (Fall/Winter, 2013)
6. Canada Media Fund – Telefilm: $352,000 Recoupable Investment (January, 2014)
7. SRED – Scientific Research and Experimental Development: $80,000 Tax Credit (Winter, 2014)
Summary: $1,022,800 total financings to date.
Our next financings will involve much bigger numbers and likely require institutional investors, a process that will once again be totally new to us. But, as with any of the crises we encounter every week, we know our passionate and resourceful team will find ways to figure it out.