Building a Founding Team Financed Business from Omaha, Nebraska: InfoFree CEO Rakesh Gupta (Part 3)

Sramana Mitra: Let’s go back to when you started this company. What did you do to get this off the ground?

Rakesh Gupta: The first thing was to figure out, with some level of clarity, what space are you going to go after. As our dear friend in Omaha, Warren Buffett, always says, “There has to be a level of clarity in your circle of confidence.” We had to figure out our circle of confidence that we can shine in. The first thing we had to do was define it clearly. That’s the first thing we did. That’s how the three things that I talked about came about.

One of the things that we needed to be good at is having a database of every single business and every single person in the whole country. That’s the sauce that powers all the analytics and cloning that we can do. We had to put a team together of data collection experts. That got the process going. On one hand, we were collecting the data that will power the whole system. On the other hand, we had to go and hire the best talent that we could find of database engineers and analytics folks to start building the parts. Those two things we brought together in 2011.

Sramana Mitra: Did you put any money into the company? You said you hired a team to do it. Were you self-financing the business?

Rakesh Gupta: We were financing it ourselves because the person who founded and sold InfoUSA became a public company. Vin Gupta was also the angel investor in Infofree. Financing wasn’t really that big an issue for us early on.

Sramana Mitra: So you raised money from Vin Gupta on a concept? He financed the angel round. Is that what you’re saying?

Rakesh Gupta: He’s also one of the co-founders.

Sramana Mitra: When you say we, it’s you and Vin Gupta who are doing this together?

Rakesh Gupta: Right and a couple of other people like our CTO Bob Smith and another gentleman Fred Vakili. We had known each other for a long time. We knew each other’s expertise and how we can work together. So, we all got together and got this thing off the ground.

Sramana Mitra: You were all based in Omaha?

Rakesh Gupta: Yes, we were all based in Omaha. We did hire people outside of Omaha, but the kernel of the team was based in Omaha.

Sramana Mitra: Of the total in angel financing, how much money did you put in?

Rakesh Gupta: The total financing that we’ve put in so far in the last four or five years is around $15 million.

Sramana Mitra: Wow! This is an entrepreneur journeys story so you’re going to have to step me through the process. What happened chronologically? What were the milestones? What was the product? What were the customer situations? The blanket numbers, by themselves, are not so interesting in the story.

So in 2011, you got this thing off the ground. You had concept and you had angel financing. What was the amount of angel financing that went into the company in 2011?

Rakesh Gupta: In 2011, we invested around half a million dollars into the company.

Sramana Mitra: With that half million dollars, what did you deliver?

Rakesh Gupta: We ended up hiring the human resource. The second biggest part of financing went towards collecting information on 15 million businesses and 240 million consumers. It’s non-trivial and we wanted to make sure that we were delivering high-quality information to our end customers.

This segment is part 3 in the series : Building a Founding Team Financed Business from Omaha, Nebraska: InfoFree CEO Rakesh Gupta
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