· David Senra, Peter Rahal
[00:00:00] S0: So same situation here. [00:00:00] S1: Yeah, a little bit, yeah. [00:00:00] S0: How many other companies are involved where you're buying the same ingredient? [00:00:00] S1: Three, four. [00:00:00] S0: Okay. So this is like- [00:00:00] S1: Yeah. And their response was like, "Well, I didn't know I couldn't... I didn't know that was an option." It's like, "What the fuck? [speaker 1 chuckling] What are you doing all day?" Like, honestly.
· Peter Rahal, David Senra
[00:00:00] S1: Yeah. And their response was like, "Well, I didn't know I couldn't... I didn't know that was an option." It's like, "What the fuck? [speaker 1 chuckling] What are you doing all day?" Like, honestly. [00:00:00] S0: I found one of my all-time favorite quotes when I was reading the book "Zero to One." The quote says, "The single most powerful pattern I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas." That is exactly what AppLovin has done with their advertising platform. AppLovin connects you with over a billion potential new customers in mobile games. AppLovin allows you to capture undivided attention. AppLovin ads are full-screen videos that are watched for an average of 35 seconds. That is retention that blows other ad platforms out of the water, and you can launch on AppLovin in minutes. You set the goal, and AppLovin achieves it. No complex setup, no expertise needed. And AppLovin scales quickly. They can put your ads in front of over a billion potential customers. Other businesses have seen immediate results, scaled to hundreds of thousands of dollars of spend per day, and increased their revenue by millions. So, you want to get started quickly before all of your competitors are on AppLovin, and you can do that by going to applovin.com. That's applovin.com. Is this why you had to raise money? Because- [00:00:00] S1: Yeah. [00:00:00] S0: So, your first company, you did like a... RXBAR was like a friends and family loan? What was the-
· David Senra, Peter Rahal
[00:00:00] S0: So, your first company, you did like a... RXBAR was like a friends and family loan? What was the- [00:00:00] S1: My dad and my partner's mom guaranteed a line of credit. [00:00:00] S0: A line of credit. [00:00:00] S1: Yeah. [00:00:00] S0: But no typical venture capital? [00:00:00] S1: No. [00:00:00] S0: Okay. What did you start Dave with? Did you raise money right away? Did you put your own money in? What'd you do? [00:00:00] S1: Yeah, I put 2 million of my own in as, like, whatever pre-seed, and then that was enough to get us to launch. And then launch, we raised eight for working capital just to survive. [00:00:00] S0: Why not just put up the eight yourself, since you already got it in your pocket? [00:00:00] S1: Yeah, because I wanted to bring in some people who have been very good to me. So, Valor Equity Partners, Antonio and John have just been really supportive, and I like how they operate. Like, their name's Valor. They're pretty intense. [00:00:00] S0: Outside of Valor, it wasn't like typical investors? [00:00:00] S1: No. [00:00:00] S0: Okay, so friends and things like that? [00:00:00] S1: Yeah, some small friends. [00:00:00] S0: Yeah. [00:00:00] S1: And then I was like, "We're done." Right? Like, we don't- [00:00:00] S0: Why was that your initial reaction?
· David Senra, Peter Rahal
[00:00:00] S0: Why was that your initial reaction? [00:00:00] S1: Because I don't want to spend time talking to investors or fundraising. I think in consumer packaged goods, the P&L should work pretty quickly. Unit economics should make sense. So, you should be really capital-efficient. You should not be raising a lot of money, unless you're going to acquire a company or do what we're doing. So, that wasn't on the table in the beginning, so I'm just focused on the business, not thinking about raising more money. So, I thought that was like, "That's it. That's the only capital in." And then we had product-market fit like crazy, and it got bigger, and then- [00:00:00] S0: And you're like, "I need to raise money to find out how to sell fish online." [00:00:00] S1: Yeah, exactly. Well, that was funny. So, we eventually raised a round to finance the acquisition, and it turned out we did need more money on the balance sheet. [00:00:00] S0: Okay, hold on. Before we get there, you raised how much money to do the acquisition? [00:00:00] S1: We raised 85. [00:00:00] S0: And who'd you raise it from? [00:00:00] S1: Greenoaks and Valor. [00:00:00] S0: Okay. We need to talk about, so Neil Mehta, I'm friends with Neil. I talk to him on the phone all the time. I talked to him about you, I don't know, like two weeks ago, and he's got hilarious stories about you that I'm going to bring up on the podcast, too. But you need to explain, like, why did you choose him? Because- [00:00:00] S1: Right, yeah.
· Peter Rahal, David Senra
[00:00:00] S1: Right, yeah. [00:00:00] S0: ... you said, "I'm not putting any more money in." You're a second-time founder. You made a boatload of money before. You have all these other investors chasing you. You don't even like talking to them. You were kind of like, and this is my own characterization, kind of like, not even rude. You're just like, "Leave me the fuck alone. I'm building my company. Go away." [00:00:00] S1: Yeah. [00:00:00] S0: But Neil's been, and Greenoaks was chasing you, right? So explain how you wind up selecting Neil and Greenoaks.
· Peter Rahal
[00:00:00] S1: The investor class believes they're very, very high status, and they always reach out with an entitlement to take my time. And so, I've always viewed it as like, I'm not giving you my time. I will be respectful, but I don't just take investor calls. I just don't do it. I think it's a bad use of time. And plus, I have my own capital, so I was like, "I'll finance it. Fuck it." That's a great position to be in, by the way. I love it, right? Like, I don't need anything. So anyway, my friend Chad Byers was like, "Hey, my buddy Neil wants to reach out to you." I'm like, "For what?" And he's like- ... he's like, "Oh, he's an investor." And I'm like, "Cool. I'm not taking investor calls right now, with all due respect." So I passed. And then two weeks later, Chad says, "Hey, I think you should take their time." I'm like, "All right. For you, Chad, I'll do that." And then I got on the phone, and I was like, I'm just really focused. So I'm like, "Hey, listen. This is not a tech company. The math should work really quickly. We should be profitable sales. That's how we're going to grow, is profitable sales and then line of credit." And they're like, "Great. Well, if there's any opportunity that comes along, let us know." I'm like, "Great. Will do." So, time goes on. We're just heads down. And then I start getting messages from former RXBAR employees where a firm was soliciting them for, like, offering them to pay them for reviewing or reviewing me. And it's not just one. It's like 20 people I haven't talked to in five years being like, "Hey, Peter, should I take the call?" And I'm like, "Yeah, take the call."