Having Fun At The Cusp Of Technology And Entertainment: Phunware CEO Alan Knitowski (Part 6)

Sramana: What has your run rate looked like?

Alan Knitowski: We grew 33% sequentially from the third to fourth quarter of last year. That was 15 times higher than our fourth quarter of the prior year. We are maintaining a profitable and debt-free status with money in the bank. That has been wonderful.

Sramana: Would you talk more about the decisions behind your financing strategy? Why did you choose to stay with high net worth angel investors and avoid institutional financing?

Alan Knitowski: We were able to do it. That was the overwhelming piece. We were blessed to be able to raise money in a way that was completely reasonable and fair to all parties involved based on where we were in the life cycle of our company. Usually once you get above a certain amount of angel or seed capital, it almost becomes mandatory to find institutional financing through either venture capitalist, private equity, or corporate strategic investment. As things turned out for our specific example, we were able to syndicate that investment and leverage a global network of contacts. We have investors from the Philippines, China, Mexico, Brazil, Texas, and California. We have a few on the East Coast as well.

The next thing we will look at is whether it makes sense, for the growth phase of our company, to partner with institutional sized investors or continue doing it the way that we are doing it. That is one of the things we hope to answer in the first quarter of this year. Whenever you have the opportunity to raise money in a way that aligns all interest in a friendly situation, it is good. We don’t have strange terms or conditions, nor are our employees and investors interest aligned differently. So far that has been the right strategy for us. I know how unusual this structure is compared to others.

Sramana: Where do you want to go from here?

Alan Knitowski: I have had the luxury of doing a 9-digit deal and a few 8-digit deals. I have not done a 10-digit deal. I am 42, as is one of my co-founders. We are just having a lot of fun right now. We are building something unique and challenging the best devices for the most advanced networks ever deployed. We do have aspirations of becoming the world’s first publicly traded company that specializes in branded mobile infrastructure experiences. I think we are the largest of our type in the United States and potentially the largest in the world. I want to continue to assemble more brands than anyone else in the world and make a small percent of every dollar ever spent on a mobile experience.

You could do everything perfectly right and never make it to the public markets or get through the IPO window. A lot of times, the most likely thing is that at some point someone much bigger wants to own the asset that we have created. At this time we know we have more flexibility than most because we do not have a mandate to raise money. That gives us more flexibility regarding where we invest our resources. Operationally, we just want to execute. We want to expand our footprint to new markets. I just returned from London and we are exploring setting up our operations there. We have investors in Latin America and Asia, and those are clearly markets that we are interested in.

The immediate future holds financial discipline, operational execution, geographic expansion, and a continued desire to have fun.

This segment is part 6 in the series : Having Fun At The Cusp Of Technology And Entertainment: Phunware CEO Alan Knitowski
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