Long Journey To Realize a Vision: Limeade CEO Henry Albrecht (Part 5)

Sramana Mitra: How did you finance the alpha and beta phases?

Henry Albrecht: The first funding came from my life savings of which I put in every dime. Next came friends, family, and mostly Seattle-based angel investors. In 2008 and 2009, we started to accumulate real customers. We started as a 30-person employer. Then, 100 on to 1,500. We charge a per-employee per-month fee for a couple of dollars. Even if you have a core team of five people working on this, we’re still moving a lot of money.

Sramana Mitra: How much did you put in of your own savings?

Henry Albrecht: $250,000.

Sramana Mitra: How much did you raise from friends and family?

Henry Albrecht: Over the whole span of those couple of years, we were constantly raising money. The total amount we raised was $3 million. We closed that round in January of 2010.

Sramana Mitra: You were raising from friends and family along the way before angels came in. I imagine you had to have some customer traction before angels paid attention to you.

Henry Albrecht: Yes, we had customer traction. We started having customer traction in 2008.  It wasn’t until late 2009 when we signed up our first customers. That allowed us to raise the rest of our angel money and close that round in January of 2010.

Sramana Mitra: Essentially, it was more than three years before you could close that angel round.

Henry Albrecht: Yes, that’s correct. It was almost four years total.

Sramana Mitra: When you were raising from friends and family, was that in convertible debt? How were you structuring that money?

Henry Albrecht: It was all convertible debt. When we closed the angel round, it was on a $5 million pre-money valuation.

Sramana Mitra: That’s not bad. That’s pretty good. So in 2010, you had some angel money. There were paying customers in the loop. What happens next?

Henry Albrecht: That’s when I would use the fish metaphor. We went from selling shrimps and herrings to salmons. Then, we got a couple of whales. We signed up our first 10,000 plus employer customers.

Sramana Mitra: Who was that?

Henry Albrecht: One of our first big customers was REI, the retailer.

Sramana Mitra: How did you get to that large account?

Henry Albrecht: We did a lot of cold-calling. We did a lot of showing up on people’s doorsteps. We did everything you could imagine to make sure that we wiggle our way into meetings. We had a really interesting idea that was well-aligned with REI who invested in their people as assets.

This segment is part 5 in the series : Long Journey To Realize a Vision: Limeade CEO Henry Albrecht
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