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"How I Raised It" goes behind the scenes with startup founders who have raised capital. This episode is with Joshua Fraser of, makers of an online database for real estate and property record information.

DataNerds went through the Techstars program and raised $3 million of Series A venture funding from Foundry Group, Next Big Ventures and Techstars Ventures. also participated in the round.

Read on for the full interview and pick up a few new fundraising hacks. 

Nathan Beckord: Welcome to another episode of How I Raised It, the podcast where we interview startup founders who have successfully raised capital. Today I have Josh Fraser of Data Nerds ( coming to us from beautiful British Columbia. Hello, Josh. So, what does Data Nerds do and why did you start this business?

Josh Fraser: We started out as a digital advertising company in 2014, and we had various different accounts. We were really focused on digital products and CPG stuff. What we realized in 2015, (and it's kind of ironic as most entrepreneurs just scratch their own itch) as I was buying my first house and had worked with Carfax before, I wondered why a Carfax doesn’t exists for houses. So, transition a few years ahead, and we started testing Carfax for houses and it absolutely blew up. We own a website called and which are our two main products. So we started selling Carfaxes for houses. They were 20 or $50, and we almost immediately had revenue, which was a really nice thing, especially when you're going to raise capital. It was very much an arbitrage business and we turned that into a seven-figures-a-year company. And then we realized that there was a much bigger play in real estate in general around the transparency of information and data, and our data really started to grow at that stage once we recognized that there was a much bigger opportunity and how large of a market the real estate industry is. So today, we're really focused on aggregating data from the 3,000 counties in the US and then running analytics on top of that to help businesses via APIs..

Nathan Beckord: Is it a consumer-facing product or are your customers real estate agents, brokers?

Josh Fraser: I come from digital advertising, so for the first few thousand customers I had no idea who they were. They were just coming in. I was on Google Adwords, Bing, Yahoo, Facebook, and that was in 2014 or 2015, 2016. So they were home buyers, sellers, investors, realtors. It didn't really matter to us because our goal was: Are you interested in these specific topics of data that are related to the home and can we get it and then supply it to you? Our focus now is a lot broader. We're working in various different areas, but anyone who's interested in real estate data typically we can get it for you. Like why can't you just go online and look up Zillow and, they're advertising platforms. Yes, they're huge. They have a ton of data, but their goal is not to give you the data. They're very much just trying to get you in front of one of their users and sell you off as a lead.

Nathan Beckord: Yeah. One of my favorite things that my wife and I do is when we're traveling to a new town, we’ll open up Zillow as we're driving around and just kind of poke into the price history of houses around stuff. It's really amazing what you can get out there today. It's crazy.

Josh Fraser: Yeah. It’s kind of where we differentiate ourselves as well. We don't have an app or an $8,000,000,000 public company yet, but it was Zillow that I found fascinating. I was in Malibu over the weekend, you know Malibu has some really amazing houses, and I was just fascinated by the fact that you can go on Zillow and even if they're not on the market, you can't really get anything about it and that's the difference of what our app can do. Even if the house isn't on the market, we can give you a valuation. We can tell you about the financials, we can give you ownership history, and demographic data, and things like that that go into the neighborhoods. So instead of just being focused on homes that are for sale, we're actually focused on every home in America.

Nathan Beckord: Interesting. So let's talk about raising capital. How many rounds have you done and how much in total have you raised? How many rounds does that make up and what's the composition of Angel, VC, accelerator? Give us a little playbook there.

Josh Fraser: Simple. We raised one round. It was $3,000,000. It was lead by Foundry Group in Boulder, Colorado. Jason Mendelson is the CFO over there. Brad Feld is a really big name and then Seth and Ryan, and they've also brought on a few others recently. I'm a part of the syndicate with Techstars Ventures, and then we also had a VC who is a group of men who have all been successful. A couple of CEOs in there. And then we just had one angel who is a friend that sold his company to Pandora and in the music data industry. So that was a little bit more of a strategic play, extremely helpful, and also backed by Foundry. Their company was called Next Big Sound. I'd say the biggest thing that I can tell everyone is that we went through Techstars Boulder 2017, and the relationships that gave us with venture capitalists made raising dramatically easier and I would assume it would be the same if you go through Y Combinator etc.

Nathan Beckord: So you got into Techstars, you're already generating revenue, and it sounds like you've kind of spun out from the ad side of things before. Let's rewind a little bit further. When did you apply to Techstars, and can you share what kind of metrics you had in terms of business?

Josh Fraser: Absolutely. I don't mind being transparent. I didn't take a traditional route. We met Techstars at a conference. I met Nathaniel Zola and Julie Penner, who are the managing directors at Techstars Boulder. It was a startup weekend, which are huge events all over as well as there, and they were pitching Techstars and I started chatting with them. I really liked them and they were really interested in the fact that we had kind of bootstrapped our company to just over $3,000,000 in ARR, which is pretty impressive. We had bootstrapped it, we had no investors, and what we realized was that we were going from this consumer-facing digital product that was kind of like a one-off. It's like, “buy this for $20, and if you want a refund, contact us, etc.” But it wasn't. There weren't a lot of touch points.

Josh Fraser: We were really examining the data side of the business and what selling an API looks like, and we were signing bigger contracts and had a sales team that wasn't focused on strictly search engine marketing and search engine optimization. So we were really fascinated on what Techstars could eventually do for us just by the relationship and the strategic standpoint. And so I was really interested. And then I pretty much accepted it because everyone's like, “This is how much equity you have to give up to join this program.” And I said, “Whoa, our company is valued at way more than that. That's insane.” And I woke up on January first, and I thought, “I'm the worst candidate for Techstars because I would have called them.” Then I was like, “Oh my God, I really want to be a part of your program.” When your intuition calls you as an entrepreneur, as a founder, that's the one voice you really need to listen to. So I called them and said, “Oh my God, I think I screwed up. I'd love to be a part of the program.” And we made things work. I started on January 23rd, and it's been about a year now. That was how that relationship works.

Nathan Beckord:  I'm sorry, do you mean you turned them down and then called them and said, “I changed my mind and why I want to be part of it.” And again, you can pass on any question you want if it's too private, but you were able to negotiate that equity piece so you didn't have to give as much because you are obviously further along than most other accelerator companies?

Josh Fraser:  I think we are one of the biggest to join, but I can tell you that this year I believe there are bigger ones joining, which is a huge testament to what the value that Techstar adds. It's not typical for them to negotiate, but I don't want to give away my personal numbers on it all, which I'm sure you can understand. But they were fantastic to work with, and I told everyone the minute I left that program, and that was the best decision I made for the business, even if it was 10 percent of the business. I would look back now and say, “Wow, the relationships that they give you are unbeatable.” As a founder, you're biggest thing is having mentors and advisors that can help guide you in the right direction and help you from making mistakes. And they have the best network. It's give first, that's the motto of Techstars. So, you can really get a phone call, or a coffee, or an email back from anyone.

Nathan Beckord: That's cool. The standard is seven percent right? Again, you don't have to give me a number, but the standard is seven? How long have you guys been around to get to that point? How many years before getting into Techstars had he been alive?

Josh Fraser:  We started to see traction at end of 2015, early 2016. And then we went into the program in [inaudible], but we were really pushing traffic by the end of 2016, almost selling 50,000 reports a month. We had reports that were only a couple bucks and then we also had reports that were more expensive than that. So that was kind of how our revenue model works. But we were selling a lot of reports at that point. We had a lot of traction. We knew who our users were, and I was really happy with the stage that we were at, and it's still scaling to this day. 2017 was a really big rollercoaster for us, but I wouldn't say we took our foot off the gas. It's hard to change from a lifestyle marketing company where you just have a ton of revenue and you're very profitable to having to completely flip it on its head and be like, “Now you're a venture-backed company, and you're supposed to be burning money every single month.” I've never run a business like that. So we even had our first board meeting last week in Boulder, and I'm still trying to wrap my head around how we're going to turn into a capital-burning business versus a capital-generating business.

Nathan Beckord: Yeah, that'd be a good problem to have. Right?

Josh Fraser:  It is a good problem to have, but it's very much a different mindset.

Nathan Beckord: So, let's go back to Techstars. You're in Techstars and you raised money from Foundry Group there in Boulder, which I'm sure every startup going through Techstars is interested in getting in there and pitching those guys. When you're in Techstars, how much of the time were you spending building your investor funnel? If you have any recollection of how many investors were in your funnel, how many did you talk to, to end up with Foundry Group and and the other folks on your cap table?

Josh Fraser: Techstars is 14 weeks. The first three weeks are very intense. They call it mentor madness. You pick out the mentors you're going to work with on a weekly basis, and you get used to the Techstars cadence. They have their weekly OKR sessions and all sorts of the classroom sessions, et cetera. So the first three or four weeks is just getting used to that cadence. The second month is all about coding and really building out the product and testing it, trying to get NPS scores from potential users, figuring out how much they'll pay for it, et cetera, et cetera. Then the third month is code and sell, code and sell. You're also preparing for the demo day. So, demo day is during week 14 and in the morning you pitch in ten rooms with 15+ investors, so you meet 150+ plus investors that day and then you go that night and you pitch again in front of 1,300 people at Demo Day.

Josh Fraser:  But my company is DataNerds so I tracked my investor funnel and a lot of them did come from Techstars. There were a lot of warm intros. I was very blessed because of that program, and our company just caught wind once we started raising. But I talked to just under 60 investment firms. I had multiple calls with all of them. It took me almost six months. We received three different term sheets. I already knew who exactly I was going to go with, but I think Foundry also wanted to see me in action. I met Foundry earlier and they were already slightly interested, but I know that they also wanted me to go get my feet wet and see what it was like to actually talk to 50 different investment firms.

Josh Fraser:  As you can imagine, I spent almost two, maybe even three months, just pitching. It went by so fast and I was six plus hours a day on phone calls, just pitch, pitch, pitch, pitch. My team's really heavy in engineering, and I didn't have a CFO, I didn't have any sort of operations person. I just sat on my phone all day with my dog, just pitching to investors. I used an Excel sheet and I did a ton of due diligence on every single firm I talked to before I even went in. I always knew of two or three companies that were in my vertical that I was interested in, that they had already put money into. I knew if they were a seed or a series C fund; you need to be aware of those things, especially how big their fund was when it started, etc.

Josh Fraser: I think that there are some templates out there on that. You'll build one for yourself, especially if you're a founder. You'll figure out what your group is and what works best. I talked to nearly 60 investment firms. It was a little over 55 and it was under 60, and I had multiple calls with probably over 20 of them and I traveled all over the US to meet with the ones that I really liked. In 2017 that made it go by fast.

Nathan Beckord:  I love that metric of six hours a day of pitching with your dog at your feet.

Josh Fraser: Yeah just like tons and tons and tons of due diligence goes behind that too. The worst thing do is send them your deck and then just get on a call with them. So I structured all the phone calls very similarly.

Josh Fraser: The first call was always 30 minutes. I'd spend the first five minutes of them introducing their fund. I'd compliment them, shoot the shit for a couple minutes, get their first five minutes of their fund and five to ten minutes on my business. I'd always try and keep it well under ten with some probing questions. Then 15 minutes are left for a Q&A. With that I had a crazy high success rate. I had only two people tell me that they weren't interested, and it was just because I screwed up – they were series B, series C, and we weren’t raising a B or C .

Nathan Beckord:  Interesting. So you would spend roughly 10 minutes on your business for this initial call. Would you be walking through a slide deck? Or would you just be talking about your business?

Josh Fraser:  I'd send the slide deck in advance and then I would always ask for a 30-minute window. Then it was five minutes about their fund, but some would take longer. VCs Love to talk about themselves, and then spend five to ten minutes on my business and I would just judge how much I can talk about Data Nerds depending on the timeframe. And I always wanted to have at least 15 minutes for a Q&A. I also use the Q&A to try and ask them probing questions about what they thought about our industry because that says a lot about who our competition is. I’d ask about my competitors in the space, or where they see data businesses going, or what the most valuable assets that they've seen in previous data businesses.

Josh Fraser: You know, they have their fingers on the pulse, especially when you're talking with Sequoia, Benchmark, and First Round Capital. You can learn so much from them because that's all these people do so they can give you a ton of insight, especially if you're going down a shitty path. You know, a lot of people start bad businesses and a VC, you know, most of them won't be afraid to tell you and if you're willing to ask, you know, they'll give you very good ideas on pivots or changes that you need to make.

Nathan Beckord: Did you pivot or alter course much based on a VC’s opinion. It's dangerous, right? You talk to 10 VCs, you get 15 different opinions sometimes about your business and what you should be doing. Did you actually adjust course?

Josh Fraser: I wish I had that Marc Andreessen quote in front of me. It’s something like, “Strong opinions loosely held?” Your pitch decks are going to be another crazy thing -- every time you send it to someone, every single person will have a different opinion of what you should change, what they liked, didn't like. So you just have to take everything with a grain of salt and trust your instinct. You should always do that. I guess this is probably the perfect audience to say this to: I'm a solo founder. I don't recommend it, at all. If I could go back, that's the one thing I would change. So it's hard work and you've got to have people there that care as much as you do. It's not fun when you're working super long hours and your team isn't, but you're paying their salaries. That can really get under your skin, and just having someone that cares as much as you do is super important.

Nathan Beckord: Very interesting. So you're raising this round, you're talking to 60 investors, and you're pitching six hours a day for a couple months. Foundry Group is kind of your target or your lead, or preferred investor there. Did you drum up interest from other firms to get other terms sheets to give you leverage to negotiate lwith your lead investor? How much negotiating did you have to do on the round?

Josh Fraser: I blew my round out of proportion initially with Foundry. I went in, I asked for a way bigger amount of money in a way higher valuation than they thought, and then I chatted with them about it and they explained to me where their head was at. I agreed with them, but I still believe that they just wanted to test me to see that I was actually going to go and work my butt off and talk to more investors. I knew that I wanted to work with them. They were a part of the network of Techstars. They are very highly regarded in Colorado and in the Valley as being a different, founder friendly firm. I knew that I wanted to work with them. And then the second pitch for me that came from them was that their reputation is everything to them.

Josh Fraser: And that just resonated a lot with me. So I stuck with them, and I felt like I made an amazing decision to work with them. There's a ton of firms out there that were interested, but I knew from having lunch with them multiple times and just by the messages we were sending back and forth about raising capital. Most businesses fail. But this is like a 10-year relationship you're looking at if that's the length of their fund. And the average US marriage is seven years, that’s what Jason told me initially. He's like, “So I'm technically having to marry you, so I better like you.” And then we really started to get into it and there was just a lot of things where I said, “I just want you on my board. I want to work with you. I know because of these ten reasons why I want to work with you.”

Josh Fraser: I didn't get other term sheets to leverage them. I've never raised capital before. It was like how hard am I going to work at this? And that's a good testament for any founder; how hard are you really gonna work at this? I grinded – I put in the hours that were required, and I was tired a lot, but I loved every minute of it. There was a lot of very intelligent people and so it was a lot of fun, but none of it was used to leverage against the people that I wanted to work with.

Nathan Beckord: That's a great answer. How did you confirm your bias that you wanted to work with them? Did you do reference checks with other founders? I mean, they have a great reputation and there's a lot of content on Brad's blog and all that good stuff. But how did you make sure that this was the right firm for you?

Josh Fraser:  Yeah, you hit it. The very first topic you said, I talked to a bunch of founders that had worked with them.

Nathan Beckord: Did you go off the list or did you find the startups that they had invested in and had failed?

Josh Fraser: Yeah, I know a few of them. I also saw the Dropbox IPO happening and saw when the Sendgrid IPO happened. Full Contact is another amazing company that they were in. One of their founders is a part of our round as well. I just talked to a bunch of founders that have worked with them and they're like, “You're in this business, and this is where you plan on taking it is a pretty good option for these reasons.”

Josh Fraser:  It was a very strategic play for us, like we were still cash flow positive. We still haven't even figured out how to burn it and we've hired eight new people since, so we're getting closer to having a real burn rate, but I knew that it was strategic. I want it to be with a Tier One VC, and a lot of the other terms sheets that I had gotten…like I kind of “tiered” the VC's as well. It's like how big is their fund? How many deals have they done? How well known are they? If you say this investment firms name, are people like, “Oh wow,” like a Sequoia, or an Andreessen, or things like that. They're like, “Oh, congratulations!” That's a big deal. And I always look at that as stamps of approval.

Josh Fraser:   I went through this initial accelerator in my home town in British Columbia called Accelerate Oakenoggen. That's a good stamp of approval in my tiny little hometown. We went to Techstars. It's like a stamp of approval because you went through this world-class accelerator in a very competitive marketplace. Stamp of approval. And we just took an investment round from Foundry Group. That's a huge stamp of approval with a gold envelope on it, but I didn't want to. It's a strategic play for us. I want to be able to go and talk to First American or Fannie Mae, and when I asked him to buy data and be like, “I want to get a 50 percent discount because Foundry also believes in me and this is why I'm going to make your life easier.” So that was a big big thing for me that I believed in. Yeah, credentials are huge part of this business. I really want to get with Google Ventures next. I've been practically banging on their door.

Nathan Beckord:  So you’re cashflow positive, but cranking up your burn. Do you anticipate having to raise multiple rounds and are you already starting to work on your next round, which kind of segues into what you just started to say there.

Josh Fraser:  No, we’re not working on the next round yet, but the one thing I did learn is that relationships are everything in this and the good investors that we turned down, I'm still talking to all of them. I have them on a monthly update list. I think as a startup you should do monthly updates. We have over 250 people on our monthly email list, and I'll tell you now that 75 percent of them are investors and that they care, or if they don't care then they just delete it. But I say in the bottom of every single one, and in the top of it, “if you don't want to hear this, just let me know so I can get you off of it.” And no one drops off.

Josh Fraser:  So, no, we are not currently working on round two. We have a couple products on a road map that we think will turn out a lot of revenue as well, just from our experience and what our customers are saying. So once we get those off the ground, we'll probably just think there'll be good wealth events for us to go and raise another round. It's a good time to raise if you have a new big client or a new big product launch and you see it starting to generate revenue. So not right now, but probably in early 2019 to mid 2019. But what I have learned as well is that after this round, we are a very young company and I hate to use the word mature, but we need to add some more mature people that have been through the woes of Startup Land and operations, like having a VP of marketing. So we're hiring a lot right now and I know what it’s that's going to take, I don't want to hire slow, fire fast. So we're taking into consideration how much more time we should spend on hiring the right people. Now that we know we're kind of on this rocket ship now.

Nathan Beckord: Do you have a - feel free to make a plug - URL or a website for your open jobs that you can point people to.

Josh Fraser: There are the jobs on our website, all of our jobs are posted there.

Nathan Beckord:  Okay. A couple more quick questions, then we'll be done. You mentioned that you just had your first board meeting. Any tips on preparing for that first board meeting? Were you in the hot seat the whole time or what was it like?

Josh Fraser: Fantastic. The number one reason I'll put behind that is because my advisors were extremely valuable during that time. One of the partners in the syndicate of our round was extremely helpful and gave me previous information. I sent a board letter and our board package five business days before our meeting, which was extremely helpful. And the board meeting went really well, but I was very nervous for no reason at all. I barely slept the night before and my CTO felt the same way. It was the first time my Garmin watch actually didn't pick up sleep, which is really odd, but I'd say it went really well. Think of it as more of a status update. You have a board to help you solve problems that you're having. They're not like, “We had an uptick in revenue or users last month.” It's more like, “What are you guys doing wrong and how can we help?” And that's how I really wanted to structure our board meetings. So that's kind of where my head's at with it.

Nathan Beckord: Cool. Okay, last question: What one piece of advice would you give yourself if you were to do it all over again? You know, advice related to fundraising or just generic advice for other founders out there that are getting ready to go raise money.

Josh Fraser: If you don't have a cofounder or someone who's like a sidekick that's going to sit with you during all your meetings and take notes, find someone to do that. I found myself recording a lot of the calls and then having to go through them again, which was a nightmare. I would've done more due diligence on every single investor, so that I knew more about them. I would just like give them little tidbits on if their website sucked and things like that.

Josh Fraser: And lastly, I would have set up an Uber conference or a Zoom and have that be the only way to reach them because if you have multiple ways of contact, having a screwed-up phone call in today's day and age is such a nightmare. It's like you can have Skype, you can Zoom, you're going to use Uber Conference, or you can just have a conference line. There's 800 of them. So I'd have like just one way to contact them and make sure that you ask for their phone number first and clarify how you guys are going to communicate during that call. And don't do it the day before. Do that as you set up or when you set up the meeting, and do it then. Don't do it 15 minutes before because that's annoying for everyone.

Nathan Beckord: That's actually a great, solid piece of advice. I've seen many, many startup pitches that spend the first ten minutes trying to configure the Skype call or the Google Hangouts, and everyone gets frustrated and then you're starting off on a frustrated note.

Josh Fraser:  It's so funny. People send a Google invite which automatically comes with the Google Hangout, and then they're like, “But we're going to do this on Zoom.” It's just so frustrating. So actually, yeah, I didn't even think about that. I'm glad that I came up with that, you know, because that's so important. It's like you and I here today; the day before we asked, “What's your Skype ID?” or what's the best way to connect? Luckily we made it work, but that can be a really big deal. We have a couple of sales guys in our office right now, and the most frustrating thing is when I go to jump on a call with someone to help out a client and they're like, “Oh, we don't know what line they’re calling.” I'm like, “No. Come on, step four.”

Nathan Beckord: Awesome! Well, this is great. I appreciate it. And good luck and success for you guys. And if you're looking for a job, check out, and thanks Josh, I appreciate it. Take care.

Josh Fraser:  Okay same, thank you so much.


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Topics: Raising Capital, How I Raised It Interview Series

Nathan Beckord

Written by Nathan Beckord

Nathan Beckord is Founder and CEO of, a venture-backed startup that makes the leading CRM for raising capital. Previously, Nathan ran VentureArchetypes and served as advisor or interim CFO at dozens of startups, including Kickstarter, Clicker, Autonet, Zerply, and many more. Nathan has an MBA and CFA and is a fanatical sailor.

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