Thought Leaders in Online Education: Blake Garrett, CEO of Aceable (Part 3)

Sramana Mitra: I think I understand what your perspective is on online education. What kind of a company are you? Are you bootstrapped?

Blake Garrett: We are funded but we use cash much more effectively than some of our competitors. I founded the company in late 2012 and I frankly didn’t have the development skills to create a product. I needed cash early on. I raised money from angel investors.

Being based in Austin, Texas, there’s a good amount of angel investors but the dollar value per angel investor is not very high. The average check size, at the top end, was around $25,000. I ended up raising, over the course of two and a half years, about $1.7 million from 55 angel investors.

Sramana Mitra: My goodness! Did you do that on Angellist?

Blake Garrett: I did not. It was mostly face-to-face meetings in Austin.

Sramana Mitra: Interesting.

Blake Garrett: Once we demonstrated traction about two years in, we raised institutional money. So far, we’ve raised about $9.7 million.

Sramana Mitra: I was told that you’re above $5 million in revenue. Do you want to give more color on that?

Blake Garrett: We close in the lower eight-figure range. We’re cash flow positive as of two months ago. We’re in a good spot because we’ve been very efficient with our cash spend.

Sramana Mitra: It sounds like you’ve invested about $10 million and you have already generated $10 million worth of revenue, and you’re at that annual run rate?

Blake Garrett: Yes. We still have a lot of cash in the bank too.

Sramana Mitra: The business has turned profitable so it’s a pretty efficient execution regardless. How do you manage 55 angel investors? What’s your strategy for managing so many?

Blake Garrett: The easy way is you beat projections every month and then they don’t really bother you.

Sramana Mitra: You provide them an update every month on what’s happening?

Blake Garrett: Yes, I would send out a monthly investor update. I send it to our team as well. I’m extremely transparent with our team. We let them know what our revenue was against projections and what our burn was as well as milestone and misses for that month. The lesson that I learned is as we did that, the angel investors loved the transparency because I was definitely an anomaly in their portfolios. Most angel investors are in the dark.

There were a couple of times where we missed some numbers. Since I had created that trust through those monthly updates, it became easy to get their support in those times. It’s still something we do today. There’s a little bit less detail today. Now we have 65 investors. They still love the email. It makes them feel like they’re part of the company. As we hire roles, we have 65 people who care about helping the company who are also highly-networked individuals.

Sramana Mitra: There are 65 investors now. Are the next 10 also angels or are institutions involved?

Blake Garrett: We have institutional investors now. We’ve raised money from Silverton and Floodgate and some other smaller funds as well. In the last couple of rounds, we’ve added strategic angel investors as well, which takes it up to about 70.

Sramana Mitra: Great. Thank you for your time.

This segment is part 3 in the series : Thought Leaders in Online Education: Blake Garrett, CEO of Aceable
1 2 3