A few months ago, we returned a substantial sum of capital back to our investors and here’s why it was the right decision. During the pandemic, we grew rapidly as a Virtual event platform solution selling to event organisers and enterprises by helping them shift their offline events online. We also raised capital across 3 rounds from some of the best Tier 1 funds across the globe and built a stellar team in India, US and Europe. The intention was to become a market leader in this new space as almost $1T is spent on B2B events annually. We believed that a big part of this spend will come online. We became one of the fastest growing startups in this space and hit record revenue in limited time ! That helped us raise a much larger round. However, as the pandemic started to wean off, so did our initial customers. We saw about 60-70% churn in our virtual event customers but were still hopeful that we’d make it up. The only customers who continued with us were associations and corporates who wanted to engage their members and customers online. We saw this trend coming and started building our offline event solution to help event organisers in their physical events and a webinar product to help corporates run an effective digital event strategy. While selling we quickly understood that there is no tailwind that we previously had during covid times and it will take a much longer time to grow into our previous valuation. Investors who came in our last round would have to wait for about 6-7 years to make 1x of their capital. They contributed almost 75% of the total funds that we had raised. As founders we wanted to do the right thing by our investors, customers and employees and decided that the only way we could serve our existing customers and continue in our PMF journey is by returning the capital to our investors even though we had no obligation to. This was a win-win for all the folks involved as investors got about $75M back, which they could redeploy elsewhere. Our ESOPs became much more relevant as we recapped the company to its true valuation. We also awarded more stocks to our employees to show them a wealth creation path within Hubilo. And our customers still have access to the product that they have loved since the past 4 years, giving us a 4.6 rating on G2. We as a company are still strong in terms of our numbers, product, support, growth and innovation. My advice to founders struggling with PMF would be to return capital to investors if that path is not in sight or if the startup isn't venture scale anymore. They trust us with their funds and it’s our fiduciary duty that we do the right thing by either multiplying it ourselves or returning it and letting them redeploy themselves. The capital your startup returns becomes the oxygen for many others!
Glad to hear you taking care of investor’s intrest. On the employee side, Please let me know how can I materialise my ESOPs?
This takes incredible courage and clarity to share so publicly Vaibhav. I am incredibly proud of being a part of the journey. I met some of the smartest, most driven professionals while working there and no news story and sudden PR interest will ever change that fact. Hubilo was not the only startup that faced incredible challenges during the post pandemic changing market, but your sincerity and values were surely the rarest of rare in that time. You tried your best, reflected on the mistakes and believed in the smaller team as you had in the team before (if not more). I wish you and the team the best. You will continue to evolve as a leader and you only will grow stronger.
Rizal A.
1mo
Awesome - so, so, so much better than the recent example set by 2 specific institutions whose public monies (funds) were invested and lost in Fashion Valet, an e-commerce platform somewhere within my vicinity. Hubilo sounds like a company built on a realistic vision encapsulated in ambition, adaptability, hard work, integrity and common sense. Pity that the 2 institutions I’ve mentioned above along with the platform founders, greatly lacked the critical virtue of governance, hence the horrendous losses - nevertheless, transparency didn’t manage to duck its head and take a backseat…pandora’s box eventually surfaced - exposing a ‘rotting corpse’. A token consolation admittedly, but better than the ‘business as usual’ happening(s) - in my opinion 😂🤣 That extremely disappointing episode aside - I wish u all the best, brah! U’ve already shown the makings of a fair and resilient business owner. With your team, the only way to go is up 🤩 Keep on believing and persevering! 👍
Hemant Mohapatra
1mo
Proud investors since day 1. We touched the sky together. What a ride it's been!
Ishan Dua
1mo
Very well said, it’s not always about raising funds. Raising funds should not be the bar, getting a successful business with revenue should always be the bar. You acted very wisely and showed great valour, wish you success ahead. Am sure there must be some run-way left and things were planned before returning.
Nikita Singh
1mo
It takes a lot of guts to even do this. I am thankful to you for putting trust ahead for all in founders. Thinking of all is important even if that means returning investments. And this also speaks about VCs that everytime you invest in a sector that looks great doesn't mean you get returns, a lot depends on founder so believe in them and let them build
Vanshika Mehta
1mo
You’ve reignited my belief in founders caring about investors - lots is said, little is done. This is truly a flip the script moment for you 💜
Ritesh Ambastha
1mo
Really appreciate you sharing this transparent account. Making the decision to return capital isn't easy, but your approach - protecting employee equity, maintaining product quality, and enabling investors to redeploy funds - shows great leadership. More importantly, sharing this experience will help other founders facing similar situations. So proud to read this from you Vaibhav Jain ! Long way to go
Mohit Jain
1mo
This really makes lot of sense. Bold move but a practical one. While this allows investors to look for a better investment opportunity, this move takes the pressure off your company when you are going through PMF cycle once again. It is truly a win-win. Good post.. thanks for sharing. 🙏
Founding Team Member - International Centre for Entrepreneurship and Technology (iCreate)
1moVaibhav Jain as one of your early mentors, I am indeed very proud of what you and your co-founders chose to do! True 'value creation' of a venture is based on the 'values' that its founders cherish....not just displayed on notice boards and company presentations, but truly practiced in day-to-day actions. It is so heartening to see that you have lived the 'spirit' of the 'letter'. This is the most effective medicine for a good night's sleep! The long-term RoI on this ‘gesture investment’ that you and your team has made, will be invaluable to the Venture. This milestone will be etched in the history of the organization and i sincerely hope that such values will be passed on to the next generation of leadership. You will not only earn the goodwill and respect of your investors and the investor community, but also that of fellow entrepreneurs, who you felt for, as beneficiaries of the re-deployment of your returned money. May God bless. Wish you, the team, and the Venture a very bright future!