Oct. 2, 2024

254. Friends, Family Fools Round, feat. Sunny Han, Founder & CEO of Fulcrum

254. Friends, Family Fools Round, feat. Sunny Han, Founder & CEO of Fulcrum
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Season 4

Text your thoughts directly to Rich.

Sunny leveraged his personal savings and help from family to fund the pivot. 

About Fulcrum
Fulcrum applies modern technology to manufacturing processes, helping makers focus on their craft and grow their businesses. The innovation of American manufacturers is critical to a better world, and Fulcrum aims to revitalize the industry with automation software.

About AVL Growth Partners
AVL Growth Partners, founded in 2009, is the leading fractional Finance and Accounting firm supporting organizations in pivoting from growth to scale. AVL brings an experienced team of CFOs, Controllers, and Accountants to your organization, delivering transparent, strategic actions for short and long-term success. Transform your financial approach affordably with AVL, supporting companies coast to coast - get to know AVL Growth Partners at avlgrowth.com. (Sponsored)

About SpringTime Ventures
SpringTime Ventures seeds high-growth startups in healthcare, fintech & insurtech, and logistics & supply chain. We look for founders with domain expertise, forging a path with a truly transformative technology. We only invest in software-based businesses in the USA. We bring a people-focused approach, work quickly, and reach conviction independently. Our initial check size is $600k. You can learn more about us and our approach.    

Transcript
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The first funder was actually from my bank account.

00:00:03.709 --> 00:00:21.702
In order to facilitate the split, we had a somewhat viable business and there was some value there and we could sell it off for some pieces, but, I had to empty out my 401k, my wife's 401k, borrow money from my in laws and my parents to capitalize the company and to buy my partners out.

00:00:22.397 --> 00:00:24.807
That was a pretty big decision.

00:00:25.243 --> 00:00:29.064
Might sound like it didn't take a lot of time to decide.

00:00:29.123 --> 00:00:31.333
It was one evening of walking.

00:00:31.364 --> 00:00:33.094
There's a bunch of lakes here in Minneapolis.

00:00:33.094 --> 00:00:39.554
I walked around a couple of lakes about eight times and eventually just decided, I think this opportunity is really big.

00:00:39.704 --> 00:00:41.783
I think this team is really valuable.

00:00:41.893 --> 00:00:47.514
I think that what we've already built and the relationships we had are things that I don't want to throw away and I don't want to undervalue.

00:00:48.024 --> 00:00:50.594
So, it's going to be worth it to do this and I'll regret not doing it.

00:00:51.390 --> 00:00:52.359
but it was pretty big decision.

00:00:52.533 --> 00:00:56.872
it was months of thinking about it that culminated into making a decision in one day.

00:00:57.713 --> 00:00:58.950
But that was a lot of money.

00:00:58.950 --> 00:01:00.850
I was essentially more than broke.

00:01:00.850 --> 00:01:04.599
I was in more debt than I've ever been in in my life from a personal perspective.

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I owed family members.

00:01:06.606 --> 00:01:07.816
it wasn't a huge amount of money.

00:01:07.826 --> 00:01:14.206
It wasn't in the millions of dollars, that I borrowed, but it was in the millions of dollars that my net worth went down essentially.

00:01:14.855 --> 00:01:21.641
The company reduced in size, we sold off some of our customers, we repositioned some of our employees.

00:01:22.412 --> 00:01:28.545
But what happened was, November of 2019, we just started to move incredibly quickly.

00:01:28.834 --> 00:01:35.268
I got everybody on a Zoom, I said, this is what's happening, I'm recapitalizing the company, here's what we're going to do, we're going to build this product.

00:01:35.269 --> 00:01:38.548
And I thought everyone was going to leave, of the people that we had left.

00:01:39.203 --> 00:01:43.656
And actually, almost everybody from that era is actually still with the company today.

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And we just moved so much faster.

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We just built and built and built and built.

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We should have probably refactored some bad decisions that we'd made, but the, pull request on the new code base was the last week of November 2019.

00:01:57.420 --> 00:02:01.019
Clearly didn't know that COVID was about to happen, but that's what happened.

00:02:01.019 --> 00:02:05.277
We were a fully remote team, working really quickly, throughout COVID.

00:02:05.647 --> 00:02:09.236
We got a PPP loan that helped us really cash flow until we raised a round.

00:02:09.817 --> 00:02:17.526
But we went from basically no product customers to 13 signed contracts, by August of 2020.