Before you take investment, figure out why you need it.
“Don’t take dumb money,” he said at a panel organized by the Greater Philadelphia Chamber of Commerce during Philly Tech Week, held at Venturef0rth and also featuring a Q&A with investor Gil Beyada.
Omnichoice raised $10 million before its business plan was fully formed, he said. That money, from a unit of Chicago-based Exelon Corp. (which now owns PECO) was pushing them to grow, he said, but “we didn’t know why we were growing.”
Snyder warned of growing your business too fast before validating key parts of your business model. At the time, Omnichoice had a B2C (business to consumer) model and that was expensive.
“It took $1800 to acquire a customer who you could make 50 bucks off,” he said.
Omnichoice eventually pivoted to a B2B (business to business) model and was later bought by Seattle-based CallVision. Snyder, a Safeguard Scientifics board member and Penn professor, is now the president of Mobiquity, a three-year-old mobile consulting firm based in Boston with offices around the world, including in Wayne, Pa. It raised a $12 million Series B round last year, has customers like Wawa, Conde Nast and Merck and aims to employ 600 by 2016.
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