I'm Leo Ramirez. I am the founder of Encast. We aim to elevate influencer success while democratizing social impact.

I studied computer systems engineering while attending Stanford.

I started and ran a previous company called Mini Donations for 6 years. We had to shut it down for a variety of reasons in 2014. 

That was when I started Encast. In December, 2014, I started working on the business plan.

By the summer I was starting to do pitches to angel investors, but at that point in time, they'd been so burned and 1998 and 2001,that, uh, that investors needed more of a basis to invest.

At the time, all I really had was a plan. I had no code written and no demo. So I couldn't raise any money. There was a lot of interest, but I couldn't raise any money. 

As luck would have it, in March of that year, one of my best friends, Brian Acton, sold his company WhatsApp to Facebook.

He was an instant billionaire as his company was acquired for $19B. I called Brian and told him that I was having a hard time raising money.

He said, “why didn't you call me before?” I didn't want to be that friend. I didn’t want to be the guy who has a rich friend and asks him for money. Absolutely not. 

He said, “Leo, I'm one of your best friends. Why wouldn't you ask me?” We had a back and forth conversation and he asked how much I needed.

I told him I needed $750k. He said “fine,” just like that. So that was my seed funding which I got in September of 2015.

As we were growing the team, the following year, I went back to Brian and told him that we rolled out our first version of the product and because we were going to hit a trajectory, I told him that we needed to hire a few more people. 

I asked him if he would be willing to put in $1.5M and he said “okay.” Just like that, within 9 months, I had $2.25M from just one angel investor.

He didn’t care if he lost all the money, it was more about helping out a friend.

He told me to figure it out and experiment with the team and market. He wanted me to experiment with the products, make mistakes, and then learn from the mistakes. God knows I made a ton of mistakes.

We had a sexual harassment accusation that was investigated and we ended up firing the guy. The woman quit, her best friend quit, and it killed my culture. 

I also made mistakes in hiring too soon. I trusted a co-founder too much as it turned out that he was undermining my leadership. So late that year, I had to fire 1 of my co-founders.

When we finally righted the ship, I went back to the well with Brian and he invested another $500k to help us move forward from all of the issues we were having.

We were able to close a couple of businesses as clients, but we never quite recovered because we spent so much money with overhiring, so much money with a domestic engineering team versus a foreign team. So we spent a lot more money than we should have.

When we finally looked like we were going to be doing pretty well, we hit a big snag in the form of the pandemic. I had to make a decision whether to keep the company alive by myself funding it.

By this point, Brian had said that he was done funding us. He said that he was going to help to the point where we had a product and some clients, but then I had to figure it out.

He of course had all the money to help, but it was a lesson that I had to learn the hard way. So I was able to raise another $125k through a few other angels. But I also had to spend some of my own savings to keep the company going.

Back when I was working on Mini Donations, we came up with a concept that's never been done in charitable giving.

It was the idea of being able to invest in a basket of charities with the receiver of funds being able to pick the percentage of which amounts get donated towards different charities.

We reinvented ourselves from a workplace philanthropy platform to an influencer analytics or influencer marketing analytics platform powered by philanthropy. 

The idea is that influencers create portfolios of their favorite causes. 

They pick the best and brightest organizations and tweak those portfolios to ensure that every time a fan donates to the portfolio, their donation is optimized for social outcomes.

And that's what we're doing now. That pivot occurred earlier this year.

Primarily software engineering, marketing, business development, and staff. 

Before I talked to Brian, I had been doing a lot of networking through my work with nonprofits. 

Some of those people that were giving grants were also potentially interested in investing. That was one set of individuals I thought might be a good fit. 

We were also eventually accepted into the Capital Factory Accelerator here in Austin. 

But before we were accepted, I was very engaged in events at Capital Factory. 

I met a lot of investors and everytime I met someone that I felt was a good fit, I'd keep a spreadsheet and make sure I knew who they were so that when I was ready to fundraise I could approach them again.

I also used AngelList as a tool along with NFX’s Signal. 

I easily reached out to 500 investors. My hit rate was really poor because I didn't understand the concept of not wasting investor’s time if they hadn't invested in something similar to my company.

The vast majority of those were just emails and LinkedIn messages that were cut and pasted. My emails were usually really long so I'm sure most of them didn't even read it. 

My hit rate from those was probably 1% to 2%. 

Of the 100 target people that I reached out to, I probably had about a 30% to 40% hit rate in interest for a first meeting. Of those, I probably had a 25% hit rate in getting second meetings.

In total, there's Brian and 5 other investors.

The problem I had with fundraising was that I did not emphasize financial ROI enough. I didn't have a well-fleshed out financial model. I didn't know what my CPC was going to be on my campaigns.

I didn't know what my customer acquisition cost was going to be. I didn't know my lifetime value. I instead focused entirely on heart. I depended on telling a story that would inspire people to give.

I couldn't convince almost anyone. I was wrong. Of the investors that did invest, not a single one of them asked me to show them a business plan. 

The ones that did invest came in from me telling the story well.

After emphasizing the story at the beginning of the deck, the rest of it is very business centric. 

We talked about our GTM strategy, who we expected to have as early customers, how much money we expect to get, and how we expected to grow.

I was the biggest challenge. To this day it kills me to hear the word ‘no.’ Despite all the no's I've gotten, it never sits well and it sets me back. 

Everyone tells me that it's just the nature of the beast and that we were going to get way more no's than yes's. They told me that I needed to get used to it. 

I haven't been able to get used to it and I don't think I ever will. 

Because I'm a highly sensitive person, I tap into other people's energies. Every no is negative energy, which naturally brings an empathic person like me down. 

I've been the limiting factor to the success of my companies. I fully put the blame on me, even when I've had bigger teams. You're going to make a lot of mistakes. 

You don't know what you're doing and you're going to learn.

The primary one is to prepare yourself for a “no”. Every interaction can result in an enhancement and an improvement in your fundraising. 

Take every ‘yes’ as validation, but don’t ever treat it as perfection. Just because someone said yes doesn't mean that you can't learn something from the experience. 

It's really important to be an active listener and to primarily let the investor talk. You need to be curious about what it is that motivates them.

You need to understand the motivations of the person that you're talking to. That weaves into how you shape the conversation. That increases your chances of getting a positive result.

Something else that one of my mentors told me was for every single meeting I had, she wanted me to ask the person I met with, “what can I do for you?” 

It never happens and that’s why it’s so powerful. Everyone is going to an investor asking them for something. When you end with that question, you become remarkable in their mind.

Brett Hurt. He runs a company called Data.World. Out of all the people in my life and all the investors that I've ever met, he is probably the best angel investor that I've ever known.

He's always been an advisor and a mentor and a friend. He's always been open to me, connecting me whenever I ask.

The TLDR newsletter. It’s a perfect way of consuming high-level subjects and summaries. 

In terms of books, Dare to Lead by Brene Brown was outstanding. That really helped me with the vulnerability piece.

Atomic Habits has also been incredibly beneficial. Having ADHD, it's really hard to prioritize because everything is important. It becomes really overwhelming and anxiety- inducing. 

When you're working on a startup and you're working on so many different elements of the business all at once, having a framework like that is really beneficial.

The Purple Cow by Seth Godin. I found that really transformative. 

Running Lean by Ash Maurya. That was outstanding. I’m actively using their demo, sell, build approach to Kyzmet.

Palo Alto by Malcolm Harris is also great. It eviscerates Stanford and the Stanford family, but it gives you a history of the birth of venture capital and how Silicon Valley poisoned how business is done. It was really eye-opening. I had no idea all this was going on.

Lastly, Give and Take by Adam Grant. He opens up with a great paradox and it sets the scene for an incredible book.

Expect it to take twice as long as what you think it will. 

Expect to raise half as much as you think it will.

Expect it to be twice as hard as you think it will. 

Expect it to hurt 10 times as much as you think it will.