He Started His First Business At 13 And Just Sold His Recent Startup For Over $750 Million
Jack Smith has believed in the ability to create your own destiny from a very young age. He has rolled that into raising $25 million for his own startup, helping others raise even more, and going through the full cycle to being an investor himself.
We recently got together for an episode of the Dealmakers podcast. He shared his creative fundraising hacks, persistence, who he thinks makes the best startup hires, how to find product-market fit, what makes a fundable startup, and more.
Jack says he’s never had a real job in his life. Originally from the UK, he studied in London while building his first real company. Since he arrived in Silicon Valley he has built and sold companies and advised other founders in doing the same.
Listen to the full podcast episode and review the transcript here.
Smith’s mother was a school teacher. As young as five years old he remembers asking her to bring home one of those big old computers. She would on the weekends, and he pursued his passion for technology and entrepreneurship.
His parents had been giving him a weekly allowance of around $2.50 a week. When they told him he’d have to start helping out around the house and doing chores to keep earning that money at 13, he decided to quit. He told them they could stop giving him money. He would go out and earn his own.
He discovered outsourcing sites like Upwork. He began to bid on and take on projects for graphic design, websites, and more. We just taught himself as he went.
That worked well, for a year, until a client called his house at 10 pm. His mother said he couldn’t speak as it was a school night. They had no idea they were dealing with a teenager instead of a real tech company or expert.
Even when he went off to university at Kings College in London, he says he spent more time at his own office a few blocks away from the school than on campus and in lectures.
Jack’s startup Mediaroots was providing tutorial videos for common computer programs.
Although very little was coming in, they did have revenues. Yet, when they were out trying to raise money from investors in London, no one was taking this 21-year-old entrepreneur seriously.
Still, he believed in himself. Getting that first break can be hard. Especially with so many investor rejections. Still, he refused to give up and eventually turned Mediaroots into a very successful Vungle.
Jack found an article on Techcrunch about a startup incubator program in San Francisco. Like YCombinator, Thomas Korte’s AngelPad was giving $120,000 in funding to those who got accepted.
Seeing that AngelPad had received 2,000 applications within 24 hours, Jack and his cofounder knew they would have to be creative to stand out and have a chance.
He decided to run LinkedIn ads targeting the executive team. Seven people were the smallest audience he could pick on LinkedIn. So, they ran ads to a landing page video of the cofounders. The next morning they had an email from Thomas Korte wanting to chat. His one catch was that they would have to be willing to permanently relocate to the US. They didn’t hesitate.
One day one of the programs they had to pitch alongside all of the other teams in their cohort. That led them to completely rethink their idea. The first two weeks were spent testing new ones with landing pages and trying to sell. It wasn’t until the sixth that they actually nailed it. Once people were really willing to spend money with them in the test they knew they found product-market fit.
During this time they landed one of the top angel investors, Lee Linden. Then they got Google Ventures to agree to lead their next round.
By Demo Day on week 12, they were able to say they had concreted a new business idea, line up $35k in sales, hire a CTO and pick up top investors.
That drive of not wanting to have to return home as failures with their tails between their legs meant them raising a $2M Seed round.
Vungle raised $25M through a Series B round. They exited through an acquisition for $750M. Their early angels received around a 100x return.
Jack eventually found himself burning out. He was working through the weekends and sleeping in the office. He failed to take any vacations.
Looking back he says he had failed to scale himself as a founder as he grew the business. He was still trying to micromanage, do too much, and not let people do their best work.
One of the investors suggested he hire a new product guy to run that department. Instead of moving further up, Jack just didn’t see a job for him to do anymore. He fired himself, instead of taking a couple of weeks to relax and vacation and think about it.
Of course, that didn’t really slow him down. Two weeks later he was joining the cofounding team of Shyp. It was like the Uber of shipping. He helped them raise $60M in funding before parting ways.
Using The Mom Test to hone your business idea and product · Tips on choosing cofounders · Bootstrapping versus equity fundraising · Why not to invest in the next Uber · Hacks for recruiting your CTO · Who the best employees are for a startup · The benefits of being naive · Why you don’t need to be number one to make a lot of money
