How I Started A $18K/Year Side Project Collecting VC-Funded Startup Leads

Boring Founder

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Published: October 16th, 2023

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Boring Founder

Founder, VCbacked

$1.5K

revenue/mo

Founders

Employees

VCbacked

vcbacked.co

from Dublin, Ireland

started August 2023

$1,500

revenue/mo

Founders

Employees

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Hello! Who are you and what business did you start?

Hey there, I’m the Boring Founder! You might be asking why I am not using my real name.

Easy. I run another business in a fairly conservative industry and would like to separate my endeavors into the sales enablement software world from my more button-down day-to-day business.

The second question you may ask is: why “Boring” Founder? That’s because I love boring businesses. My superpower is getting incredibly excited about stuff that others would yawn at. I would much rather let others compete over the next cutting-edge AI play or NFT project (is that still a thing?). I’ll always focus on the basic B2B stuff that is not inspiring - but immensely profitable.

Speaking of “boring” businesses, my most recent venture is called VCbacked. In a nutshell, the tool gives my customers access to data on thousands of Venture capital-funded startup founders, including verified email addresses, LinkedIn, and funding data. Think of it as Crunchbase, but with all the extra information, you could need to contact your favorite founder.

And there is one more twist: You can export as many contacts as you’d like. Other databases like Apollo or Zoominfo limit you to e.g. 250 contacts per month. I don’t. Want to download 7,000 contacts your first month? Go ahead.

When trying to identify my ideal customer profile, I found that marketing agencies tend to be the best fit. Other professional service providers that sell to startups will likely be included soon. I have yet to test if actual Venture Capital firms are interested in my solution.

While the business just started, I am currently making $1.5K MRR. Surely, that number will keep growing.

What's your backstory and how did you come up with the idea?

This isn’t my first rodeo. I’ve built a few internet businesses before. One successful, several okay to unsuccessful. Like many founders out there, I started with a moonshot that ended up not working out. From there, I refined my approach and ended up with my “boring” philosophy towards building businesses: B2B, niche, high price, few customers - no thrills but highly profitable. I’m not trying to build the next unicorn or launch something into space.

The idea originally came to me because I kept coming across newsletter businesses like Cyberleads and Who Raised? that sells a monthly lead list of founders who just raised money from VCs.

It is a cool concept and works well, but has one flaw: most professional service companies have an ideal customer profile that is much more narrow than “has money to grow”. Most companies are looking for leads in a specific industry, geography, size, etc.

Creating a searchable database business with these leads makes it much easier to target exactly the right ICP compared to receiving a monthly lead list of which 70% might be irrelevant.

Moreover, I had great support from a guy called Fraser on Twitter. He runs a database SaaS named FindAdvertisers and helped me think through the opportunity.

Though it is a big no-no in the eyes of many lean startup evangelists, I did not sell before building. I went straight to developing an MVP. Getting a few thousand leads took a lot of work, I underestimated how much time that would take. The web app itself took about one day to build.

Take us through the process of building the first version of your product.

First of all, I needed the leads to sell. Initially, I thought it would be as easy as going to Apollo and searching for contacts. Nope. Apollo turns out to be terrible for that kind of stuff. While they have data on a lot of founders, they rarely have valid email addresses on them. They also have no additional data points that my customers would want to see.

Crunchbase is a lot better at surfacing startups that raised capital - but buying contact information from them is pretty expensive. So I had to keep searching.

While I am not going to explain the secret sauce to how exactly I generate my leads, I can tell you that it is a mix of multiple sources regarding both finding startups and discovering contact information. Web scraping is also quite helpful.

Once I had a decent amount of leads (about 6,000), I built the website and web app. As it is an MVP, I kept it very spartan - no images, no bells and whistles, only core functionality. To speed things along, I used no-code tools: Bubble and Algolia.

All in all, I spent around $1,000 on the MVP which was primarily for getting the leads. Building the actual web app was around $150.

Describe the process of launching the business.

To launch VCbacked, I simply started sending cold emails. Cold email is a channel I’m very familiar with from some of my other businesses, so I found success pretty quickly. After a few days, I already managed to have my first few paying customers and a decent pipeline of future subscribers.

Please note, that I am not (yet) treating this as a full-time project. I have dedicated my spare time to VCbacked, but my other business still demands most of my attention. Hence, I am applying more of a “quick and dirty” approach to my launch strategies.

As soon as I had set up a good cold email process, I started testing the next channel. I launched on Product Hunt, got around 140 upvotes… and that’s it. Not a single customer. I am not sure why this was the case (PH has worked pretty well for me in the past) but I assume that the monthly price tag is just a bit too high for most PH fans. I assume that products sub $50/month do a lot better there.

For my tests, I will likely try affiliate marketing (something I have very little experience with) and Google Ads. I’m sure there will be a lot of trial and error, I’d just like to make sure that cold email is not my only distribution channel.

Do one week of product work. Then spend one week on marketing. Rinse and repeat.

Since launch, what has worked to attract and retain customers?

As mentioned, cold email has been great to attract customers. But email has been great at retaining them. Initially, I was quite worried about churn. Why pay for a subscription month after month if you could just export thousands of leads on day one and just use those?

Sending regular emails with updates has been key. I tell my users once a week how many leads have been added to the database and which updates have been made. It is super simple but keeps people engaged. It has also been shown to convert signups into paying customers.

One thing that will likely take a lot of time to pay off is SEO. Given that time is my most limited resource when it comes to growing VCbacked, I would like to get SEO to a point where users come to the site automatically. My goal is to get someone from Fiverr to start writing some content and maybe do some backlink outreach. Testing SEO as a growth strategy is tough since the time lag is so huge, but it would be amazing if it worked.

How are you doing today and what does the future look like?

VCbacked is profitable. I am not yet paying myself out of the business, but most of the $1.5K MRR is profit. In the coming months, I will likely start reinvesting a lot of my revenue back into growth, especially when it comes to running ads and creating content for the site.

My current stack is incredibly cheap. Fortunately, cold email software has come down in price massively over the past few years. I am only spending around $250 a month on this project.

My day-to-day operations are usually spent updating the database (70% of my time) and managing my outreach campaigns (30% of my time). I was going to allocate more time to building new features, but nobody has asked for anything or complained so far. Surprisingly. I will tackle features again once some customers show some real need for them.

Through starting the business, have you learned anything particularly helpful or advantageous?

I have learned that bigger customers are better customers. It’s something that I re-learn with every business I start. Ask a sales manager in a 1,000+ employee company to spend $150 per month. No problem. Ask the founder of a 3-people shop to spend $150. They will argue, haggle, complain once they have access, and demand a refund.

I had a founder write a 1-page email complaining to me about my tool because one of the leads exited the company and was not the right decision maker at the startup anymore. He downloaded 7,000 contacts. He threatened to issue a chargeback.

I love solopreneurs. With this project, I am one myself. But they are terrible customers.

What platform/tools do you use for your business?

First off, Bubble. Bubble is the tool I have built my web app on. I could have spent ages building everything myself in code… But Bubble allows me to build all necessary functionality in a much shorter time frame. Should VCbacked become huge, I might migrate away from Bubble, but not for now.

To search for my web app fast, I use Algolia. It’s pretty intuitive and I am still on the free plan. But the paid plan is also relatively cheap.

For cold emails, I use Smartlead. I have tried many different services over the years, but Smartlead is (for now) the cheapest and has all of the core functionality I could need: master inbox, warmup, A/B testing, etc. Of course, there are others like Instantly, Woodpecker, and Lemlist. All great, I don’t think you can go wrong with any of them.

Once I allocate more time or a freelancer to it, SEMrush will likely be the next tool for me to purchase. It is pretty expensive, but especially to get an SEO strategy setup, it’s invaluable. It allows folks to understand which keywords to target when creating content, how many backlinks are necessary to rank, and much more.

What have been the most influential books, podcasts, or other resources?

I’m much more of a podcast guy than an avid reader. My favorite podcasts are “Invest Like the Best”, “All-in” and “Startups for the Rest of Us”. However, I have to mention that I rarely take actional input away from podcasts. It’s more entertainment with the feeling of getting to learn something than actually learning something.

The best resource to get insights into how to run and scale businesses is YouTube. I don’t have a specific channel to recommend, but when I want to get better at a certain topic I just throw it into the search bar and watch 4 videos. That does the trick. Having people share their screens and talk through the steps is much better than trying to understand some super high-level strategy.

Advice for other entrepreneurs who want to get started or are just starting out?

The biggest piece of advice I can give is “Just get started”. So many people ask me about their business ideas when I am not their target customer, ask me to define a go-to-market strategy before they have nailed down the product, or want me to introduce them to investors without having validated anything.

All of that is noise. Just start talking to potential customers, build an MVP, and go from there. There’s a 90% chance you will pivot into something else anyway. I know this because I started out this way, too. Most founders do. Learn from their mistakes.

The second piece of advice is to split your time somewhat equally between product and distribution. Most first-time founders build great products that nobody ever hears of. If you don’t do marketing, the quality of your product does not matter because nobody will ever find it. If it helps, do one week of product work. Then spend one week on marketing. Rinse and repeat.

Are you looking to hire for certain positions right now?

I’m not hiring anyone yet. That might change soon, but it will likely only be a freelancer in the beginning. As this is still not my full-time project, I am going to take it slow with it. If there is an opportunity for VC-backed to become huge, I’ll post job ads soon. If it turns out to be a profitable side business, that is also fine with me.

Where can we go to learn more?

If you have any questions or comments, drop a comment below!