A Letter to My Investors

For the last several years I have written a monthly traction report for my key stakeholders (employees, current & potential investors, board, etc). It is something I recommend all entrepreneurs do. Typically my report is quick and to the point, includes a KPI update and a few high level strategy items. Basically, it provides a “state of the company” and ensures you keep everyone up to date so there is no surprises.

Below is my last update to BoomBoom Prints stakeholders. This had a far different tone from my normal update. Please keep in mind that everyone receiving this note had received honest updates for the last two years and my employees and current investors had been in more regular communication for several months prior to the shutdown,so this update was not a shock to anyone.

An unfortunate update. We are in the process of winding down BBP. How did we get here? I have thought long and hard about how to answer that question and decided on a timeline with a bit of commentary. I am going to try and be concise in this email even though a lot of questions will likely go unanswered. I am also going to avoid any “looking back” or “learning point” insights here but I am more than happy to chat with you about the process, current situation, or what the future holds. Please just let me know when you are available.

March 2014 – I jumped in as full time CEO, invested personal money along with my co-founders, and brought along a few of my Team members from prior start-ups.
July 2014 – Launch the current version of our production site
August 2014 – Close a small seed round and begin to focus on artist acquisition. We raised enough for a 12 month runway.
January 2015 – Pass 1,000 active artists and begin making small channel tests to try and find a scalable marketing channel that would provide a + ROI.
May 2015 – Pass 2,000 active artists
June 2015 – Run our first truly successful marketing test, a partnership with Citrus Lane that included an in-box promotion made up of a tri-fold brochure with a “mystery” gift card. The promotion converted at a 1.75% rate within the first month and had a positive ROI. It was not scalable with Citrus lane as their subscribers did not turn over fast enough. We believed that the same type of promotion would translate to other brands that ship product to our target market, Zulily became a logical target for a partnership.
June 2015 – Begin Fundraising for the second part of our seed round, the use of capital would be to explore additional marketing channels.
July 2015 – Established a partnership with Zulily to run a 50,000 insert promotion to start and end the first week in November.
August 2015 – Renegotiate supplier deals & add an 25+ new SKU’s
Sept 2015 – Runway is up without any new financing closed. To their credit the team was all in and decided to stick it out, unpaid.
Oct 2015 – Receive ~ $200k in commitments to close at the end of November. This would be enough money for us to scale the Zulily channel. If our numbers had matched the Citrus Lane test we could have scaled Zulily to ~$75k revenue/month by March.
Nov 2015 – The Zulily partnership falls significantly short of expectations. We do not have enough capital committed to truly vet any new channels, nor do we have any proven channels that can drive revenue to a point that would allow us to be self-sustaining or raise enough money to take the company to the next level and my team needs to eat.

In talking with my team, board, and advisers we decided that the best next steps for all of our stakeholders would be to provide some finality on the company prior to the end of 2015.

I am happy to expand more on this with you 1-on-1, please just let me know if you would like to set up a time. We also have three team members that are currently looking for their next position. We have already made some inroads for them but any additional leads would be appreciated. See a quick blurb on each of them below.

I appreciate your support and advice over the last two years. It is obviously an incredibly difficult situation but this is the unfortunate side of what we do.

Onward,

-Brett