How an Underdog Startup Came Out on Top
- Apr 26, 2023
Co-Founder of Yac Jordan Walker got creative when his startup was running out of funds. In this TechTalk episode, Jordan has a conversation with EisnerAmper's East Coast Technology and Life Sciences professional Fritz Spencer about continually getting written off—and then rewriting the playbook to secure funding for the leading productivity app. Jordan also addresses the impact of the collapse of SVB on the startup community and shares valuable advice he received.
Hello, and welcome to TechTalk, an EisnerAmper podcast. I'm your East Coast host, Fritz Spencer, a professional with the technology and life sciences practice at EisnerAmper. And with me today is a very special guest, Jordan Walker, co-founder of Yac. Jordan became a entrepreneur right out of the gate of university and from my own hometown of Jacksonville, Florida. Today, we'll be discussing Jordan's journey of entrepreneurship, the dog and pony show that is fundraising and selling, and current events surrounding the Silicone Valley Bank collapse. Today's conversation may give you a new perspective and influence your next business decision. Jordan, it's great to have you here. Thanks for joining me today.
Yeah, man, I am so pumped to be part of this conversation. It's so good to see you.
Why don't you tell our listeners a little bit about yourself, and how your entrepreneurial journey began, and where it's taken you?
Yeah, for sure. My name's JW. I run a company called Yac, Y-A-C, and it stands for Yelling Across Cubicles. So, that's where we're at today. But I think like Fritz, you just mentioned there, the back story's actually more interesting. I've been an entrepreneur as long as I can remember, even when I was little in first grade trying to sell whatever I could. At one point, I was selling beer on the golf course in first grade to any golfers that came by to try to make a buck. When my mom found out, quickly shut down that operation. I, then, of course, sports cards growing up and everything else in between. But when I got to college, I ended up meeting my co-founder, Hunter, who you know very well as well, and we just instantly jived and click. We started talking about everything from technology to design, to entrepreneurship, to music, and just all these things that we loved.
And at the time, he actually had a company coming into college as a t-shirt company or a clothing company. And so, I helped him with that a little bit. And then, shortly after our freshman year, shortly into our freshman year, I should say, we ended up starting our first company together, which was a design agency. So, we got some local traction in Jacksonville. Fortunately, that sent us into the next realm of clients and customers that we got to take on, even working with really awesome people like Google, Margaritaville, Emirates, Marriott. The list goes on, and on, and on.
Through that actually, we realized that we sucked at marketing in the traditional sense, and so, meaning we were never going to be the ones to go out and be really crafty with how we position this certain thing or do this certain thing. But what we were really good at is being kids on the internet and trying to go viral and gain attention. So, what we would actually do to garner new clients for SoFriendly, the design agency is actually build these products in hopes that they would go viral. So, we would build things like meme generators, other useful products, and really anything else that we thought of at the time that would maybe solve our own problem or it was just funnier interesting to us. So, we had shipped a few of these before, and they'd certainly done the job. People find the product. They wonder who
built it, then they find our agency, and the referral loop works that way or worked that way at the time. The one though that became really different was Yac. Yac was just absolutely wild how it came together.
Yac was one of these side projects that we put out, but when we put it out, the response was different from people. It went bananas. We put it out, these random people from Florida, and I guess too, this was before remote work was cool, so nobody gave a crap about Florida at this point in time as far as the tech world goes. So, we put out this really early, early, early version of Yac. And long story short, it just went bananas. We ended up getting a wait list of 3,000 people, or 3,000 teams, I should say, from folks like CVS, Barstool Sports, Lyft, Uber, Spotify, every company that you could name.
And we're sitting here going, "Oh my gosh, there's like something to this thing." So, we kept pursuing it for a little while longer. And then, lo and behold, one random day on Twitter, the power of being on the internet, one of the users of Yac mentions VC Titan Adam Draper, son of Tim Draper, OG Silicon Valley venture capitalist on Twitter and says, "Hey, I think you would really like what the Yac guys are doing.
Check it out."
Within five minutes, Adam DMs his cell phone number. We get on a call with him, and mind you, we're like little kids on a birthday at this point in time. We've never talked to a venture capitalist before. And here we are talking probably to one of the most powerful biggest VCs, maybe even people in the entire world sitting in our hotel room in Las Vegas. Long story short, Adam says, "Hey, I want to fund this thing." And we haven't looked back, and we can talk more about the fundraising details, but that's our back story in a few minutes, and super grateful to be here.
Great. Thanks. Thanks for sharing that. It's nice to see a fresh new face on the tech world coming out of college and all the new different things that you guys wanted to just take everything and run with it. You mentioned Yac a few times and what you guys were building, but why don't you tell us exactly what it is? Give us the elevator pitch for Yac and its product or services.
So, Yac at its core is an asynchronous voice messaging app for remote teams and freelancers. Imagine you have a team that's distributed even across local time zones here in the US. It's really hard to find common time to meet. If you're on PST and someone's on EST time, there's a three-hour difference. Maybe someone's picking up the kids from school, maybe somebody has an appointment. It's really hard to find that common ground to meet. So, with Yac, you can actually just record a voice message or recording of your screen, send it off to the person, they can watch it at their own time, and then, they can respond back as appropriate.
Awesome. So, it's real time but not real time.
Right. Real time, but not real time. You can think of it like sending a voice message on iMessage on your iPhone or something like that or sending an email. Just has more context to nuance than some other forms of communication might.
Awesome. It's great to know. As you mentioned, you've taken your company and other entrepreneurial journeys through many life cycles, including fundraising. And with no two companies or projects being the same, can you tell us about that process and what it was like, like how you met Mr. Draper and went through that whole fundraising process?
Yeah, for sure. There's a couple stages, and I think you is so unique, and we can talk about each really quick. The first round of funding that we received from Adam Draper was our pre-seed round of funding. In total, that was $275,000, and we raised that from Adam Draper, and then, another fund out of New York called Betaworks Ventures. So, they took that really, really early bet on us. And we were really grateful for that because of the time, like I had mentioned, no one was invested in Florida companies as much as they are now. This was pre-pandemic pre-remote work. Nobody thought anybody was doing anything interested in Florida. And it was even like a negative signal at that point. People saw that you weren't really from New York or Silicon Valley, you instantly got written off.
This was late 2018, early 2019, like Christmas time, if you will. Christmas time, New Year's time is when we got connected with these folks. So, the round ended up coming together, but we were really a needle in the haystack with the how that funding came together. You just never heard of things happening like that. And at that time, there's truly only a handful of companies I could count on one hand that got venture funded, significant venture funding, I should say, from places like that. What gets interesting is actually, our second round of funding, our seed round of funding. We had gotten some momentum and started to get our names out there a little bit by proxy of Betaworks and Adam investing in our company, but still, we still had the Florida thing hanging over our heads, if you will.
And so, fast-forward to December of 2019, we're trying to raise our seed round. We were getting written off by everybody. It was the hardest thing in the entire world. Folks from Silicon Valley weren't giving us the time of day. Folks from New York and even all over the place weren't giving us the time of day because we were these random unknown entities with no sexy backgrounds building a company out of Florida. And obviously, Fritz, we went to the same college, go Ospreys, we love you UNF, but UNF's, not exactly Harvard, or Yale, or Princeton or any of these really prestigious schools that people think you need to attend in order to be successful. So, that was a challenge
that we had to face. But the story gets even crazier. After probably hundreds of calls, and this is at the top of December, 2020, we finally, I should say, think we lock in one VC who's going to lead our seed round.
It's going to be about a 3 million round. They were going to basically take up the whole thing. And about two weeks before Christmas, I'll never forget, we're in the car, a Friday, we're leaving the office. We had a call from the guy. He goes, "Hey, you know guys free to talk for a sec?" And I can just tell by his tone. Everybody knows. You talk to someone, you can just tell from their tone instantly, it's just going to be a bad conversation. He goes, "Yeah, so I got a question for you guys. Are you moving to San Francisco or what's the plan?" And we're like, "Well, no. We're building a remote company and a remote tool. We need to be what we say we are. We're not moving to San Francisco. Also, we're all from the East Coast like that. Nobody has any connections out there to San Francisco."
At the time, we had team members with kids, and wives, and families, and husbands, things like this. It just wasn't easy to go to San Francisco. So, we said no on this call. And then, he goes, "Yeah, that's what I thought. So, with that unfortunately, we're not going to be able to do the deal." So, they backed out. So, mind you, Friday afternoon, two weeks before Christmas, we're basically running out of money at this point, and we're like, "Well, as quickly as Yac came together, it died, and it's gone." So, we're thinking this the whole time. What we actually ended up doing gets crazy. It was either do or die time. It was either find the funding or shut this thing down, and move on, and get on with life, go back to the agency. What we said is, "Well, we're going to give it a real honest effort to find funding."
And so, this is where I got creative, and this is some of the insider knowledge that you don't really hear about, but work really very well. And I would encourage a lot of founders listening to try to emulate themselves is we actually went to Twitter to find these VCs. What I quickly realized is that a lot of venture capitalists get just the most insane pitches in their inbox every day. And it's very much so, ask, ask, ask, ask, ask, and not engaging someone like a real human. But what I learned very quickly is that these VCs, they're all just real people like you and I. They all love sports, they all hang out with their families, they all go do fun things just like you and I do. They're not these people to be revered as like a God, if you were some crazy figure. They're people just like you and I.
And so, what I ended up doing is I would find these VCs on Twitter, and I DM'd as many as I could, something about themselves not related to our company. I would say, "Oh, hey, I like your podcast." Or "Hey, I saw you sneakers. Hey, I saw you just posted about this song. Oh, you're from this state." The one that ended up actually working for us was the guy who ended up eventually leading our seed round. I saw that he was a Virginia Tech football fan, and by random happenstance, one of my friends from high school went to go play football at Virginia Tech. And I am not remotely a Virginia Tech football fan. I don't think I've ever watched one their game or something like that. But I said, "Hey, I see that you like Virginia Tech Football. One of my friends happens to play there. What a small world. That's crazy."
And for two weeks, Fritz, two weeks, we talked about Virginia Tech football before Yac funding or anything like that even came up. Eventually, he said, "Hey, this thing, Yac, that you're working on, that looks really interesting. What is it?" So, we ended up having a conversation about it. We did a call. He flew out to us. We did a round of Topgolf that following weekend, talked, went over deals and things like that. I think I actually won. I have a photo of it on my phone that we'll have to talk about after the fact. So, that was nice too. And from there, then he actually ended up leading the deal, and we ended up doing a $1.5 million seed round. So, that was just great for us because the company was going to die, and it was just this really triumphant story.
And we ended up doing a bunch of press around it, Tech Crunch, and a million other places, and it really set us apart. It was like, "Okay, wow." People were like, "Wow, we should actually start paying attention to this company from Florida." They did something different for their fundraising strategy. It's out of Florida and it's like being written about in the top of the top tech news. This has never happened before, and this is all pre-remote work, pre-COVID, pre-pandemic. So, it was just extra interesting for folks, and we gained a lot of attention that way. And then, next thing that we knew, so we closed the funding, we hired people, finished out the products, got it to
a really good place. And I kid you not, the week before we launched, the world officially was declared a pandemic. Everybody went into lockdown and things like that.
And if you look at our analytics at that time, because everybody started looking for tools for support, remote work, working from home, and things of that nature. Our analytics, we were just, and then, just skyrocketed. Everybody was search for Yac at once. And then, before we knew it, Yac was one of the most popular startups in the entire world at this point. And we're going, "Whoa, okay, we're still these random folks from Florida. What's happening?" We're getting mentioned everywhere. Fast Company at one point, did an article. We were the number one productivity app of 2020 or something crazy like that. So, it was just a skyrocket whirlwind of adventures. And then,
the last piece I mentioned here about funding, sorry, I know I'm going on for a while, but randomly, that summer then, Slack, I guess now, Salesforce, but Slack actually, we got connected with, and they said, "Hey, we want to invest in you guys."
And at the time we weren't fundraising. We had just closed that seed round. A few months later, we didn't need the funding, but when Slack comes to you and says, "Hey, we want to give you a half a million dollars," you don't say no to those guys. So, we ended up taking the additional funding from Slack, did an announcement about that too. And then, I think that just put us into a whole new category of notoriety. That just went ballistics. Slack invested in this company. Who are these people? What's going on? It just broke the internet for a day. And then, from there, we were able to raise a series A, which was about a $10 million round, and we got some of the best investors in the world on our cap table. So, that's my funding story. Kind of long, but little crazy.
Wow. No, you need every second of that story, Jordan. That is an amazing story. You went through all this process, you went through all this funding, you got all this cash, and then, where do you put it? Hopefully, not in SVB, but that's where I want to segue to next. You've got all that financing, and with all the recent events surrounding Silicone Valley Bank and how they focused on startups and startups like yourself, can you speak to how maybe you or some of your colleagues were affected by that?
Yeah, so fortunately, we early on, we divvied up banks. Silicon Valley Bank used to be our primary provider. Shortly or later, we ended up switching over to Brex, and now, have diversified into JP Morgan Chase as well. But we did have a very, very, very small position in SVB. So, we were reflected a little bit there. And it was some worry for a little bit small, but just small position, but still money that you just evaporated, and you were concerned about. What I can speak to more though is that we had some friends who were not diversified in where they hold their assets, and Silicon Valley was their main provider. And I'm talking tens of millions of dollars just evaporated like that. And these folks were truly terrified. People were wondering, how am I going to make payroll? How are people going to pay us? Can the company survive? What is going on?
There was a true panic in the startup world because people just had millions of dollars just gone like that. And even for us, we felt some second and third order effects from it, people not being able to pay their invoices on time, people churning. Because at that point, when you have no money, you're not concerned about, hey, am I going to pay my vendors, my service providers like Yac or BackTrack. They're concerned about, hey, am I going to be able to make payroll? Or just generally, where is the money? Where are these things happening?
And so, that seven to 10 days was really scary for a lot of people because people weren't getting paid, and there was really no resolution during that weekend of just like, hey, what's going to happen? And then, I think maybe even worse in a sense as well is after the fact, everybody's standing on pins and needles wondering, okay, well, what bank's going to collapse next? What's going on next? Is my money safe here? Is my money safe there? Because there was also talk of other of bank runs happening at these other locations. So, I think even now, people are still a little nervous, but at that point in time, it was really, really scary for a lot of people. People weren't getting paid, and it was just the Wild West there for a little bit.
Yeah. It was an absolute fire drill from what I could see on all sides of the table. And I hope that you had some trusted advisors that would've helped you through assessing the risks, even though you didn't have a concentration risk with SVB, some of your friends, as you said, did. Can you maybe shed some light on some of the guidance that you or some of your friends received during
Yeah, so the thing was, also in our case, it was when we talked to our investors, it's, "Hey, let's make sure that our asses are covered and that we have assets not just in one place." The general advice was, "Hey, get your money out and diversified as fast as possible." That was the common advice from the startup plan.
Never keep all your eggs in one basket, that's for sure. Thanks for that, shedding some light on that. Now, I'd like to wrap up with one question that we always include in our TechTalks, and it's because we believe that conversations are the foundation of successful companies. Lastly, I would love to know, what's one conversation that you've had that continues to influence you?
Oh, man, that is such a good question. For what it's worth, I'm stealing this question going forward when I talk to other folks. What's one conversation that really stands with me? There's a couple, but I'm going to talk about one that happened pretty recently. We were actually out in San Francisco seeing Adam Draper, and he gave us three points to really, really focus on. And they're very obvious when you say them out loud, but it really makes you think a little bit. The first point was fear is the dream killer. So, if you're scared of things or you're tentative or you're holding back, that is a way to kill your dreams. You may not go for something, you may not take that risk, and you may not take that chance when it's something that you may need to be doing.
Second point he made was explore the edges of the map. What he meant by that is that there's so many possibilities, so many stones unturned that you should take the time to go turn over these stones. Go explore. Hey, how's somebody using your product? Go check that out. Go try that audience. Or hey, just see what else is out there because there's just so much that we don't know or see on our regular day-to- day basis. And then, third, I really like it and it's very on brand for him. He says, "Be the cockroach." What he means by that is, as a startup, survive by any means. Be resilient, be fast, be stealthy, be out of the way. Do what you got to do to survive because cockroaches, I think, can survive quite literally anything. So, be the cockroach, especially in this environment right now, this bear market that we're in. Keep your cost flow, build a great product, build a great business, and survive. It's the name of the game. So, I'd say that's a conversation that's probably been really on my mind as of recent.
It sounds like you guys have had some several great conversations, and that is such a funny way to end this podcast with be a cockroach. If I could end every podcast with that line, it would be a funny day. Well, listen, Jordan, I want to thank you for taking the time to have this conversation with me today. It was an absolute pleasure having you, and we hope to have you back on some time again.
Absolutely. Thank you for having me. This was a blast, and I will talk to you soon, brother. Thanks, man.
Of course. Of course. And a special thanks to our listeners for tuning into TechTalk. We would love to hear your thoughts and feedback on today's episode. So, please leave us a review, hit the like button, but most importantly, subscribe to stay up today with the latest here at TechTalk. I'm your East Coast host, FS, and I look forward to seeing you next time here on EisnerAmper's TechTalk.
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Fritz Spencer is a Audit Senior with audit and accounting experience serving both public and private entities.
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