Q: Can you share with us a bit more about yourself and your business?
A: We’re Ben and Andrew, the co-founders of KANU. KANU is a mobile marketplace platform that allows community organizations and colleges to create dedicated marketplaces. We empower organizations to provide entrepreneurial experiences for their members, from student bodies to entrepreneurial ecosystems.
Q: How did you figure out how much capital do you need to start the business?
Starting KANU from a dorm room forced us to figure out our capital needs right away. Just like you'd budget for textbooks, meals, and social events, we broke down our expenses into necessities and luxuries. We figured out the absolute essentials for starting—like server costs, initial app development, and a bare-minimum marketing budget. We used free tools and student discounts wherever possible. This exercise gave us a realistic idea of how much money we'd need to start and maintain the business before it could become self-sustaining.
Q: How do you turn profitable when so many students have the free version of your app/website? More generally, what is your revenue model and how does it sustain your business operation?
We use a freemium model, where basic features are available for free, but advanced or specialized features are behind a paywall. We also provide classroom features to educators and students to upgrade to premium packages. Additionally, we take a transaction fee from marketplace transactions.
Q: Can you take us through how you financed your business from the start? What worked? what could have been better?
Initially, we bootstrapped the company, reinvesting revenue back into the business. Later, we raised a pre-seed round to accelerate growth and product development. We've also considered various other financing options, such as convertible notes and crowdfunding from friends and family. Looking back, taking the time to build a solid customer base before seeking external funding worked well for us.
Q: Do you have any advice on how a business can maintain strong financials and how to finance a business?
Think of your business finances like your personal budget. Be frugal, prioritize needs over wants, and avoid accumulating unnecessary debt. It's all about being smart with what you have. The same way you might use a budgeting app to manage your personal expenses, get familiar with basic accounting software or even a detailed Excel sheet to keep track of your business income and expenditures. This will not only help you maintain a healthy financial standing but also prepare you for any unexpected expenses or opportunities.
Q: Let's switch gear and talk about your relationship as cofounders. There is a debate on whether one should cofound or not. From your experience, what is good about cofounding? More importantly, what were the issues that you had when cofounding and how to avoid them?
Co-founding has its advantages, such as shared responsibilities and complementary skill sets. However, it's crucial to have clear communication and aligned visions. We faced issues initially with role definitions and decision-making processes. Having a well-documented founders' agreement and open, honest conversations helped us navigate these challenges.
Q: Equity split among cofounders is an issue that we talked about in class. How did you handle equity split among cofounders?
Equity split can be a delicate issue. We decided to handle it by considering various factors like skill sets, responsibilities, and the value each founder brings to the company. We put all of this in writing and reviewed it periodically to ensure it still made sense as the company grew.
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Venture Funding