Oodles.com founder Steve Sherlock has set himself the goal of raising a multimillion dollar Series A funding round by the end of January 2010. He plans to document his trials and tribulations and seek feedback from readers on AnthillOnline.com. This is his first post in the series.
Like most online entrepreneurs, when my brother and I launched our company we figured that within two years we’d be popping the champagne and arguing how to spend the millions we’d earned.
It’s a bit disheartening then to find that six years on, after endless hours of brainstorming, debating, arguing, fighting and sometimes even agreeing, we’re still looking for that ‘rich beyond our wildest dreams’ exit strategy.
It’s not the only thing we’re looking for. We also need investors who are willing to help our company – online car rental aggregator Oodles.com – move into the next phase of its development.
Oodles is performing well. We’ve enjoyed sustained growth over the past few years in terms of our visitation and conversion rates, and we recently took top spot in the Hitwise parade for our segment.
Not long ago, however, we saw an opportunity to differentiate ourselves in a crowded market by refocusing the brand to meet the unique needs of frequent travellers. Since then we’ve developed a ground-breaking website that will help these travellers minimise business expenses, maximise frequent flyer point benefits and offer all the convenience of a car rental express pickup service.
Now we want to execute our business model on a global scale, and lift the presence of the Oodles brand in our key markets of Australia, New Zealand, the US and the UK.
All of that requires dollars.
This is not the first time I’ve looked for capital. In fact, over the past six years we’ve raised around $2 million from a combination of private investors, who have taken equity in the company, and government grants (including R&D, COMET and MCC).
This time I want to attract a new type of investor; the sort that would invest in companies like Twitter or Facebook. By that I mean one that will back our efforts to create a unique targeted product relevant to a sufficiently large audience, rather than focus on a short-term return on investment.
So how are we going to get it?
Well, that’s the hard bit. We do have a broad strategy, which we will pursue over the next four months, and it involves identifying and then stalking (I mean pitching to) potential sources of venture capital, as well as strategic investors.
I’ve been lucky enough to meet some successful entrepreneurs who have raised millions in the US, and have access to a list of around 50 VCs based in Menlo Park and Palo Alto, California – so that’s where I’ll start.
I am not discounting Australia as a source of capital, but I have my doubts there are Australian VCs with the appetite to back an online travel or media brand at the level we are seeking. If investment came from Australia it would more likely be an existing media or travel player. However, these are the companies we’d be looking to exit to after we’ve built the value, rather than them getting in on the ground floor.
In essence, I’m stepping into unknown territory. End each week I’ll explain what I’ve been up to, providing opportunities for fellow entrepreneurs to learn from our mistakes and (hopefully) our triumphs. I’ll also use Twitter to provide regular updates throughout the process.
I’m eager for this to be a collaborative process, rather than a spectator sport. So if you believe I’m going off track or you have ideas to contribute, I hope you’ll let me know. Oodles.com is no superliner – we can change direction and tack very quickly if we get good feedback.
The aim is to secure and seal a multimillion-dollar Series A funding deal by the end of January 2010.
Let’s see how we go.
Steve Sherlock is co-founder of Oodles.com, one of Australia’s leading online car rental aggregators.