Boombotix Raises $4 Million Financing Round

new capital infusion allows company to progress wearable audio technologies

This afternoon marks an incredible milestone for the next phase of Boombotix. Today we announced a $4 million strategic investment from new and existing investors. New investors include The Social+Capital Partnership, Baseline, Red Hills, Great Oaks and Grishin Robotics, while existing investors participating in the round include Walden Venture Capital and David Dolby.

Boombotix has spent the last three years developing the highest-quality audio hardware and software products and solidifying its operations. This new investment will enable us to rapidly expand our presence in the market with our unique audio products that combine hardware and software to create a fresh approach to how people enjoy their music.

Since launching in 2010, Boombotix has seen triple-figure sales growth year-over-year. They have shipped a line of speakers called Boombots into national retailers like T-Mobile, Microsoft and hundreds of specialty retailers in action sports and cycling. Since the launch of the Boombot REX, the company has also seen tremendous growth in their online segment with etailers including Apple.com, Amazon and their own direct eCommerce.

“I’ve had a number of audio devices, but the Boombot design has brought a level of wearability that is unique in a world full of just headphones,” said Ted Maidenberg, partner at The Social+ Capital Partnership. “The Boombotix team continues to show impressive innovation with building an amazing user experience and we are looking forward to amplifying that experience.”

Wearable technology not only has to overcome technical hurtles, but it has to drive trends in fashion and design too. The Boombot REX has been heralded for phenomenal industrial design while blending acoustic performance with software. Boombots have always been a great extension to smartphones. The technologies we are developing are going to continue making mobile audio more accessible and less invasive than ever.

At the end of the 2013, Boombotix launched a mobile app called SYNC on iOS that synchronizes audio content on 4G/LTE networks. This is the first technology that allows users to create synchronized peer-to-peer listening over mobile. This is just part of the new audio listening experience that Boombotix is creating.

The Bluetooth speaker market has seen triple figure growth over the past two years with over 2.2 million units sold domestically in 2012[1]. Boombotix has demonstrated that it has a brand that is commanding strength in strategic verticals that can potentially expand into double-figure market share very quickly.

I’m extremely excited to build out our organization in the upcoming years. We have some challenging execution to perform, but this is truly the opportunity of a lifetime.


[1] http://www.twice.com/magazine-issue-type/current-issue/no-blues-bluetooth-speaker-market/106554

What it’s like at Shark Tank casting

Shark-Tank

the ultimate entrepreneur Hail mary

On Friday morning I headed out at 7:30am to North Hollywood to the Holiday Inn for casting calls for Shark Tank. This move falls under the umbrella of an entrepreneurial “hail mary.” Sometimes you gotta throw it deep and cross your fingers. Right off the bat, lady luck was not looking good. A semi had flipped over on the 405 leaving only two lanes. Fortunately, I planned for a little extra transit time, but I also knew this meant I was going to be pushed farther back in line.


When I got there, I saw people lined up for blocks. It looked more like a refugee camp than a business pitch. This wasn’t the posh venture capital office I was accustomed to. Entrepreneurs of all sorts were waiting patiently on the sidewalk with their inventions proudly on display. Despite everyone competing for a spot on the show, there was an air of curiosity floating about. Everyone here had something in common. We all had an idea we were really proud of that we wanted to share to the world.

They passed out wristbands pretty quickly. I was number 341 out of about 500. They told us that it would take about five hours to get through the first 300 people so we could come back at 3:00 for our 60 second pitch. That was a big relief not having to wait on the sidewalk for hours. Like many entrepreneurs do on a regular basis,, we found the nearest Starbucks for retreat. For the next couple hours, some of us practiced our pitches, shared our ideas, and got some work done. I met a number of interesting entrepreneurs and shared some of my experiences. A lot of people were at an earlier stage so I was hoping that I could at least offer some helpful strategic insight. Either way, we were all in the same boat together trying to get funding for our idea.

other ENTREPRENEURS giving it a shot

I met Ari Zandman-Zeman who had a portable workout device called Rubberbanditz. It was like the ultraportable bow flex. He has some good trailing revenue and I encouraged him to increase his valuation and base it on fantasy (Fantasty valuation is a term we use when the value of the business is primarily based on the market opportunity more than the actual financials). I met Mark Samuel who had a fitness bag company called Fitmark. We shared a taxi back to the airport and I told him about my experience working with manufacturers reps and factoring invoices. We talked about eCommerce website optimization and girls too. He is having a child this fall. Gary from Rapid Impact was developing a promotions platform called Rapid Impact. I’d say we spent our break playing devil’s advocate with each other impersonating sharks and challenging valuations. I also met Gentleman Norman who was basically a cute Boo impostor.

what the pitch was like

We went back at three o’clock and got taken into an auditorium. The producer of the show explained how the whole process worked and let everyone have a Q&A. This was the first stage of many to get on the show. If they liked your pitch here, they would call us next week and ask us to put together a short video. If we passed the video stage, we would get called back for another pitch and they would do some due diligence. If they were still interested after that, you MIGHT have a chance to go on the show. No promises. They also clarified that they had removed the clause that gave the production company an option for equity or royalty on profits. That was reassuring. Now I actually REALLY wanted to be on the show. It was a chance for national TV exposure to 7 million people at one time.

They had two rooms with five people on staff in each room. Each entrepreneur pitched to one-on-one while the staff took notes. They let us run a little bit beyond a minute. My goal was basically to seduce an incredible amount of stoke into this person. The girl I pitched to had the power to decide on whether my pitch was a stand-out or not. I was oddly a little more nervous than I am in typical pitches. Between the odds being stacked so heavily against you and pitching in an event with hundreds of competitors in your face, this was one of the most fierce pitching environments I’d ever experienced.

The pitch went smoothly. I really tried crafting it around my founding story knowing that would probably be the most marketable scrappy entrepreneur story I could put together. My product demo of the Boombot REX wen really smoothly. That thing is always good for giving the WOW reaction from the punchy performance of this speaker design. At the end of my pitch, the girl said, “nice pitch. I want one of those things.” I handed her the demo unit and thanked her for listening to my pitch.

I’m not sure if I’m going to get the chance to be on the show. If anything, I’m glad that I gave it a shot. I was thankful to have met other entrepreneurs along the way, and I wish everyone the best of luck going forward. If anyone has any questions about the casting experience I’m happy to tell you all I know.

 

The Fear and Excitement of Entrepreneurism

Jason Arens Getting PAID

Making it to the top of the podium takes courage and passion. That never changes. (Skier: Boombotix team rider Jason Arens at VT Open)

Most of the press we see around startups thrives around new funding rounds, exits, mergers and acquisitions.  Sometimes we see speckles of bankruptcy, but usually it is only press worthy when a Goliath figure goes down.  When I started Boombotix, I didn’t think about the private equity market.  Actually take that back.  I didn’t give a shit about private equity or banking.  All I wanted to do was make this awesome speaker.  With my friends and family support, I was able to get a business started.  This is the beginning of digging yourself into a hole in hopes of coming out on top.

Naturally, you are rejuvenated with hopes of success and triumph.  Go ahead and pop a bottle of champagne but just know that the bubbles are short lived.  Getting funding is a very challenging thing for a business.  Getting a hardware company funded is even harder.  More than twenty times more money goes into software.  Why?  Well it’s simple.  Hardware requires more cash to scale.  A lot more.  Building a real brand takes even more cash.  Investment funds of $250 million or less might cringe at the thought of pumping $100 million to build a category.  Fail and that fund is hosed.  Hardware exits are also not quite as glamorous as software.  Investors know that they require more cash, so by nature they also get a softer multiple on trailing revenue.  Some investors even refer to hardware as being “dirty.”  This was completely new to me.  I grew up looking at brands like GoPro and Skullcandy with idolatry.

Despite all this, we are here with a mission.  We are building the most technologically sophisticated ultraportable speakers ever.  This is where the brand values have to be engraved into the organization (forward-thinking industrial design, acoustics, mobility, innovation).  This is when you make the tangible become intangible.  Suddenly you transform from being a hardware company to being a brand with purpose and direction.  When you cross this chasm, investors are no longer looked at as sources of growth capital.  You treat investors as partners to help achieve a grand vision.  The goal embodies more than just making money.  It involves driving change in the world.

Products whether they are tangible, web-based, or mobile are all the driving forces behind change.  Without a great product, you cannot have a great business.  Some of the things we want to build take so many resources that we are forced to manage our wish lists, feature sets, and expectations.  As entrepreneurs, we have to swallow the reality of the current always being less ideal than the future.  Just know that no matter how far into the future your propel yourself, that will never change.  Be sure to find just as much pleasure in looking back on the past, or prepare yourself for a world of pain.

What was I getting at here in the first place?  I don’t want to scare anyone off from starting something.  I just wanted to paint a realistic picture at my view on the world of private equity.  Hardware is hard.  But you like a challenge right?