Non-Technical Founder Building a Tech Startup to over $10m: David Moricca, CEO of Socialive (Part 7)

Sramana Mitra: What is the total amount from friends and family investors to get to $10 million?

David Moricca: Maybe $9 million. $6.5 million was not as Socialive. A lot of companies do pivot. I hear stories about companies who fail for the first time. They just restart. The thing about that is you’re leaving your investors high and dry.

Sramana Mitra: That is correct. If you have professional investors who are accustomed to taking losses and just writing off things, it’s one thing. If it’s personal relationships at stake, you have to honor those. Friends and family investments have pros and cons. What you’re pointing out is that if you leave them high and dry, then you lose the relationship.

David Moricca: You believed in what you were building. They believed in you. You’re tossing that to the wind.

Sramana Mitra: You raised sub-$10 million over a period of 10 years. You have arrived now at $5 million ARR?

David Moricca: North of that – double digit.

Sramana Mitra: You are kind of breakeven.

David Moricca: Correct.

Sramana Mitra: What has been the 2020 to 2021 growth rate?

David Moricca: It’s been north of double. We’re expecting the business grow again in 2022.

Sramana Mitra: Now is a very good time to raise venture financing.

David Moricca: I don’t disagree with you.

Sramana Mitra: Because your friends and family investors have been in the deal for a long time, you could potentially give them exits at this point.

David Moricca: Absolutely. A lot of these folks have been in since the beginning. To deliver some liquidity now would be very interesting. If we can deliver them liquidity but still give them upsign, that’s exciting. The cool thing about where we are is we’re just starting to hit this inflection point. A lot of these investors are high net-worth. They like liquidity, but they’re also willing to let some of it ride.

Sramana Mitra: If they don’t need liquidity, they should ride the whole thing. Great story! One of the questions we get very often is what is the path to technology entrepreneurship for a non-technical founder. You just laid out a path.

David Moricca: As I look back to Breakout Band and Mixify, both were awesome products, but we didn’t look at the market side.

Sramana Mitra: If you were working in 1M1M, I would have made you look at the business side. That’s one of the things I always say to entrepreneurs,

“Don’t write a single line of code until you figure out what business you’re going to build, how you’re going to monetize it, what is the TAM, and what kind of a business are you building.”

David Moricca: I completely agree. We created a great investor deck. We had a really strong sound story of why this was going to be an amazing product. It was an emerging market. We were trying to create something new. I’m sure I would have argued at that time that you can’t assess the market because we were innovating. That’s not true. Even in the DJ community, I could have done the analysis.

Sramana Mitra: You can do an analysis of everything. You can always assess. Thank you for your time!

This segment is part 7 in the series : Non-Technical Founder Building a Tech Startup to over $10m: David Moricca, CEO of Socialive
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