My name is Dhruv Chopra and I am the co-founder and CEO of Elsewhere. We are a live music company dedicated to building communities around new music across genres.

We host over 600 live events each year.

We had another live music business called PopGun Presents — which was acquired by Elsewhere.

We raised a seed round of $4M at a $10M post-money valuation. It was a rolling raise — we were actively raising from 2014 to 2017.

At the time we intended this to be our one and only raise, like most hospitality businesses. The idea was to build the best NY club for new music and community.

In hospitality they call it a “hospitality flip” model, with a focus on distributions — investors get 80%+ of distributions until their principal is met, and then they get ~40% of distributions thereafter in perpetuity. 

We then decided how many shares the $4M investment would take by backing into a 20% or so annualized cash on cash return for investors based on projections. 

This resulted in an effective $10M valuation.

This looks very similar to a 1x participating preferred structure, which we’ve now converted to as we continue growing and are taking on institutional capital.

At the time we needed money for acquiring the lease, construction costs, permitting, and everything associated with building a music venue.

As the club and brand grew, our company has grown as well; we’re now looking to raise capital to continue expanding. 

The current growth strategy is in three parts: acquire new clubs, create partnerships with other venues and properties, and growing our memberships arm. 

We are an unusual company for venture because we are not a pure tech business.

We are building a business that will be a high cash flowing business when it scales — but it won’t have the exponential returns you see on a software business. 

We had to work with investors who were interested in building that type of asset.

We consciously avoided having a big lead investor along with folks we thought would be overly interested in VIP-style favors from a nightclub investment. 

Elsewhere’s ethos is inclusivity, affordability, and community. There is no VIP at Elsewhere and we wanted our cap table to reflect that.

My partners and I relied heavily on our personal networks — but we were kids and didn’t know many people. 

For every person we spoke to, we asked for two more recommendations of others we should talk to. We then relentlessly followed up.

During our rolling raise we spoke with over 400 people and had at least 900 meetings. We raised a lot of small checks from dozens of people over that time.

We emphasized the founding team and the dedication we have had to this vision. 

In particular, we emphasized my co-founders’ past success of launching PopGun Presents, and then owning / operating Glasslands Gallery, a beloved and seminal venue for the NYC music scene. 

Glasslands hosted artists like MGMT, Vampire Weekend, Lana Del Rey, Disclosure, etc. The list goes on and on. 

That combined with my financial background, and the fact that we have been lifelong friends went a long way. 

We have been playing every role from making grilled cheeses at 3am, to building the software for a marketplace, to liaising with elected officials, and strategizing expansion plans.

When you can show an investor your success is inevitable because you will do anything that needs to be done — this puts them at ease.

We had to adjust our pitch drastically depending on the type of investor we were speaking to.

The metrics that each of these investors care about, and the problems they want to see you de-risk are very different. 

Switching from pitch to pitch can be a challenge.

One unique thing we were able to showcase when we pitched, was the ability to show the number of massive music stars that got their start with our promotion company.

MGMT, Wiz Khalifa, Lana Del Rey, and Vampire Weekend were all part of our community long before entering the mainstream.

Being able to show the cultural resonance that our business has been able to tap into has been a huge advantage. We were also able to show a very analytical approach to risk. 

We had the reporting and analysis structures set up early, which let us show both left and right brain thinking when it comes to operating our businesses.

To really succeed you have to be overly dedicated to making the business work.

I would not advise founders to do this, but for the first few years my partners and I did not pay ourselves.

We put everything into the business and sacrificed our health a bit to do it.

I would do it differently now — I would find a way to pay ourselves sooner.

Start with people you know and trust — and go from there. 

I found that I spent a lot of time trying to meet new investors, but I didn’t realize that I already knew folks who would champion us. 

I love the newsletter Thesis Driven by Brad Hargraves. 

I learned a lot about real estate investing from him and he challenged me to consider searching for capital outside of the traditional areas.