This is the fifth in the series of posts that outlines the companies I’ve invested in, and why I picked them. My goal is to reach 100 early stage investments by January 1, 2018.
Company #5: Partender
What Does It Do?: Reduces bar inventory from 6 hours to 15 minutes through a smart phone app
Way To Think About It: This is (sort of) like Mint for bars
Year Invested: 2014
Amount Invested: b/t 25k-99k
How I Found The Deal: MicroVentures (their profile is here)
Why I Invested: I grew up in the restaurant business. I know it pretty well, and I know the problems that are inherent in the business, and one of them is inventory. Bar inventory especially is fucking awful. It’s a monthly thing at least, and everything about it SUCKS; it’s long, it’s tedious, it’s stupid, and it is such a waste of time and effort. But it has to be done.
As soon as I saw this company description on MicroVentures, I was sold on the idea. I knew exactly what problem it was designed to solve, I knew it was a big problem that a LOT of companies will pay a lot of money to solve, and the way they are solving it is fucking genius. I could explain, but you’re better off watching the video:
Right now, you may be saying, “So you save 6 hours once a week. OK, that’s a real business, you’ll make some money, but so what? What’s the big deal here?”
There are a few major implications of this. I’ll outline them from least amazing to most amazing:
1. Reduce Shrinkage: By improving and shortening the inventory process, you can increase the number of times you do inventory, and eliminate shrinkage. Meaning, you can stop your bartenders from pouring off the bar to their drunk friends. That is a HUGE cost center in bars.
2. Automate ordering: After every inventory, Partender instantly emails you your Purchase Orders in MS Excel, which you can forward to your reps and be done with inventory AND ordering in 15 mins. This has the potential to completely change the distribution process.
3. Improved Stocking: Cloud-based data analytics online show you what’s selling the best/worst, what your dead stock is, and what you’re low on, so you never run dry and miss a sale. Basically it can help you only stock what your customers want, and not waste money on dead inventory.
4. Improves Liquor Distribution Efficiency: Why is there such a big supply chain problem in liquor distiburion? Because the paper/pen process of inventory takes so long to do, no one does it. So no one knows what they’re running low on or places orders for these items. Consequently, bars constantly run out of product and miss $30 billion/yr in sale opportunities.
5. Changes the ENTIRE inventory process: This doesn’t just have to be used for liquor. In theory, you can inventory ANYTHING with this app.
You starting to see why I freaked out when I saw this company? (There’s actually two other big things, one having to do with data, another with distribution, but I’m not going to write about them, they are very non-obvious, and I don’t want to awake any potential competitors).
So the idea is genius, that’s great, but there is still another big concern if I’m going to invest: the team. Who the hell are these kids? This is super important here, because this idea is not as simple to pull off as it seems, and even if the app is great now and works well, they still are going to need to be able to do a ton of really difficult work to be able to do the things that are necessary to make this a billion dollar company.
I connected with the CEO through their AngelList profile, and after getting on the phone with him, I was pretty confident in his abilities. Or, I should say, there were no red flags. Nic was conscientious, intelligent, diligent, and meticulous. He was definitely young, which for this company I was a tad worried about, but he had none of the major young guy red flags–basically, he was nothing like the arrogant shit bird I was at 24.
They happened to be coming to SXSW, so that made further due diligence easy. So I went to the pitch event they did (that was sponsored by Georgetown Angels, thanks Josh), and was very impressed. Not so much with the presentation–its not fundamentally different than this video–but rather with Nic and his presence. This was not a young dude “playing start-up.” He was serious.
I invited him and his team over to my place later that night for drinks, and ended up hanging out with them until 4am, and that was what sold me. I knew within an hour or less I was going to invest in them and the company.
First off, let me say that neither Nic, nor his co-founder Anj can hold their liquor–and that is a GOOD sign. The last thing I’d want to see in a start-up in the liquor space is partiers. These two are serious about the business, not the party. Nic had two glasses of Deep Eddy, and was hammered.
Second, they were just really great people. Nice, intelligent, perceptive, emotionally intelligent–I’d have hired both in a second for almost any job in my company, even if they weren’t qualified. They’re the type that could learn anything in no time. You can just tell, both from their attitude, their energy, their stories–these two were both thinkers and workers. Even Anj’s boyfriend, who doesn’t work for Partender, was a solid dude, another good sign (who you associate with reflects who you are).
You might think, “who cares what they’re like as people?” That’s the complete wrong approach, in every way. Who you are matters, because who you are guides what you do, what decisions you make, and all the consequences that derive from that. I don’t believe I could invest in a company that was a great idea, but had shit founders–even if they were competent. I just couldn’t trust my money to people I don’t believe in as people.
The best part about this investment (for you): For every company I’ve listed so far, the opportunity to invest was long past. And in fact, for most of the 40+ companies I am invested in to date and will write about over time, the rounds are closed. But Partender is different:
You can invest in Partender if you want to. Right now.
That’s actually why I bumped their write-up to the front of the line, because I am so excited about this company and want to give my readers the chance to get in on this, assuming that you are an accredited investor, etc. Here’s where you can invest:
MicroVentures: I recommend using the MicroVentures platform, because it is just so easy to use. I know these guys and have used them to get in on like 5 or 6 companies (including MeetUp and Twitter pre-IPO) and they are great, I will absolutely vouch for them and their platform in all ways. You’ll have to sign-up for an account and verify your accredited investor status, but once you do that, you’re in and it’ll be easy.
AngelList: I love AngelList too, so if you prefer that, you can use it as well. I think they still use SecondMarket to process their raises, and I don’t like SecondMarket as much as MicroVentures, but they’re perfectly legit.
BTW–their growth numbers on both sites are old. I won’t disclose the current numbers because I’m not sure if they are proprietary or something, but they are WAY higher than the ones listed on the MV and AL profiles.
Also, they are hiring (their jobs are on their AL profile). If you’re a young person and don’t know what to do, you could do way worse than work for this company. They’re going places.
NOTE: I am getting nothing for this recommendation. I make no money, I get no equity, I take no carry, I get no kicker on my stock, etc. In fact, Partender didn’t even ask me to write about this. I just did on my own, mainly to give my readers the chance to get in on something I think is really cool.
The previous posts in the series are listed below:
Why I Invested #1: Deep Eddy Vodka
Why I Invested #2: [Redacted] Restaurant Group
Why I Invested #3: Regalii
Why I Invested #4: Terrafugia