Perfection Before Expansion
Written by Eamon Coughlin, #WakeEntrepreneur and Summer Intern
I once read an extremely compelling quote from Carl Schramm, who was an American economist, entrepreneur, and former President and CEO of the Ewing Marion Kauffman Foundation. Schramm believed that “The single most important contributor to a nation’s economic growth is the number of startups that grow to a billion dollars in revenue within 20 years.” Although there are critics against this line of thinking, Schramm points to the idea that innovation is key in the success of a society and that we cannot just rely on trade and the corporate world. Becoming an entrepreneur allows people to truly follow what they are passionate about, make a career out of it, and help the economy in the process. I believe that Alex Smereczniak (Wake Forest ’14) and Dan D’Aquisto are doing just that in growing 2ULaundry in the $35B laundry and dry cleaning market.
During my time at 2ULaundry I have learned about the process of raising capital for a high-growth startup. Alex has taught me that timing and the personnel of the venture capitalist/private equity firm are some of the important aspects of raising capital at a startup. He has told me that raising capital and growing 2ULaundry at the right time is extremely important because he wants to ensure quality and perfection of the company’s first markets (Charlotte and Atlanta) before expanding into new cities. It is much easier to grow a company successfully with the right model in place, rather than growing a company and figuring out the right model in the process. If a startup were to raise money when market space or the company itself was not ready, it could end up having many pointless conversations with investors, lose focus on the day-to-day activities of the business, see growth/momentum stall, and become exhausted with so much time wasted.
Recently, 2Ulaundry has been getting great traction with some impressive venture capitalists and private equity firms. It has been great to see the progress and connections we have made. I have learned that fundraising for a startup does not involve directly connecting with venture capitalist or private equity firms. It is important to make strong relationships with other successful startups that can make introductions and recommendations to venture capitalists and private equity firms to lead into a conversation about investing. The introduction makes the initial conversation more effective. Once the introduction is made, it is the startups job to effectively communicate the value that it has to offer.
I learned an incredible amount during my experience working for a startup this summer. I had responsibilities to meet in my day to day routine to ensure that I was making a positive impact on the company. The members of 2ULaundry are an amazing group of people, who have a strong drive for success. Going forward, I would like to gain some professional experience in the financial industry before pursuing an entrepreneurial career. I cannot thank the 2ULaundry team enough for being so supportive and helpful this summer. I look forward to watching the company grow in the future.