January 9, 2015
Avelist Closes $450K Round, Tackles the Big Apple
Raleigh list-making startup readies new plan for revenue and user growth in 2015
Just days after Christmas, the entrepreneur notorious for selling her house to fund her company packed up her car and trekked the 500 miles from Raleigh to New York City.
There, she’d share an apartment with friends and commute back and forth each month between her co-founder, development and marketing team in the Triangle and her growing base of partners and advisors in the Big Apple.
In 2014, the founder of Avelist took the advice of successful Triangle entrepreneurs and mentors and cast her net far beyond the region to grow users and awareness for her site that lets people organize their lives using lists and share them with others.
By doing so, she met investors who helped close her $450,000 round in December and a Charlotte design agency that has begun work on a rebrand and redesign of the site. She grew users above 50,000 and joined New York City networking groups that led to media industry contacts and now, pending partnerships with niche wedding, home decor, parenting and careers publishers willing to use Avelist to distribute content on their sites.
She also discovered an enterprise opportunity for Avelist—an option for companies, academic institutions and social groups to create and share private lists among their employees, clients, students or members. Pilots of the freemium model will begin in January.
It was all that travel to the big city that made it apparent that Avelist needed to do more to compete with the major social media plays around.
“You don’t know how hard it is to get users. You don’t know how hard it is to raise money,” she says. “We’re very fortunate that we have gotten users and it’s enabled us to raise money, but that doesn’t mean it’s easy. We think if we’re able to take a little more control over our own destiny, that’s always a good thing.”
The two big initiatives in the first quarter of 2015 are the redesign and monetization plan. Here’s how Porowski explains those decisions:
Competition. It might not be expensive to start a company, but it is to compete, Porowski says. And her target demographic of women 22-35 want to use a site that is as pretty and modern as it is functional, like Pinterest, Instagram and Facebook. Feedback from that group, investors and content partners was for an experience that looks more professional than startup.
Handling that work is Centerfold, a new agency in Charlotte made up of four designers with a combined 40+ years of experience at reputable agencies designing projects for Fortune 500 companies. Porowski expects to relaunch the site within four months.
Because companies and organizations told Avelist they wanted a way to share lists privately between their employees or members, and the team found a way to implement that offering with minimal changes to the platform. The pilots begin this month and a full version should open to the public by March. Porowski will use the pilot to determine whether pricing will be based on licensing or per user per month.
Monetization is a tough decision for any startup. In many cases, it can distract from doing the things that make exponential growth happen every month and attract the interest of investors. But Porowski hopes it also makes fundraises easier in the future.
“If we can make money and self-sustain, it means we can get better terms in the future—we don’t need investors as much,” she says. It also gives time to decide whether growth is better slow and organic or if she’s willing to sacrifice equity for a faster pace.
“It gives us options we didn’t have before. It would be irresponsible to not at least try,” she says.
Porowski found investors intrigued by the opportunity for revenue—one is funding her travel back and forth between Raleigh and New York City. Lead investor Ron Varol, a retired executive from IBM who lives in Cary, came aboard after reading about Porowski in The News and Observer. He led the round of seven angels, including two from the Northeast. $110K came in December 2014.
Much of Porowski’s learning in 2014 came from taking that step outside of Raleigh. Though Porowski believes consumer Internet startups can be built anywhere and North Carolina is home base, she considers Avelist a media and content company, not a technology play. And the center of media and content is New York City.
“The type of partnerships we think are really going to help our growth—those major media companies—were not in N.C.,” she says. “Each company needs to decide how they want to grow and what realities are there for their industry.”
That said, the enterprise pilot is happening with three North Carolina organizations. And Porowski hopes future hires will happen in her hometown.
She just must spread her wings to ensure it happens.
For more on Jody Porowski, check out her National Women’s Entrepreneurship Day Fireside Chat at American Underground.