Building EatStreet, Raising $55M, and Learning to Let Go
Flexible funding solutions designed for sustainable growth of Wisconsin companies.
Episode Summary
In 2010, EatStreet sent every single order to the restaurant by fax machine. No tablets, no email, and at first no credit cards either, so you paid the driver in cash. Matt Howard started the company as a junior at UW-Madison, bootstrapped it for two and a half years because he didn’t know venture capital existed, then raised more than $55 million and grew it to 350 employees and 4,000 W-2 delivery drivers. Then DoorDash raised almost $2 billion from SoftBank and flooded his markets. Thirteen years in, Matt told his board he’d be gone in six months. He calls leaving the hardest thing and the best thing he’s ever done.
Matt now runs SeriesUp, where he and a team of eight sit in the CFO and COO seat for 14 early-stage companies, joining around the seed round and handing off when they go out for a Series C. This episode is part of our series presented by Valency Fund, with Laura Strong in the host chair. Laura has been on the guest side of our mic too, talking through funding alternatives and growth capital for Wisconsin startups. This episode is for founders weighing a raise, operators trying to grow with a company that keeps changing under them, and anyone who has wondered whether walking away means they failed. Laura and Matt get into raising on a story instead of a spreadsheet, treating dilution as a math problem, the board meeting where Matt’s job was on the line, and why Wisconsin needs a few exits that put real money in early employees’ pockets.
Key Learnings
He Didn’t Know Venture Capital Was an Option
Matt’s dad started a machine shop when Matt was a kid, and watching it grow taught him that you just grow a company. You don’t take money from other people. So for two and a half years, EatStreet was bootstrapped, and Matt wore every hat because there was no money to hire anyone to wear them. By the time he started hiring, he knew every corner of the business. The company did $100,000 in revenue its first year. The person who finally asked if they’d considered raising was Scott Button, a judge at the business plan competition EatStreet won. That $10,000 first prize is why Scott jokes he was technically EatStreet’s first investor.
Matt isn’t romantic about the bootstrapping years, though. Back then, Grubhub was chasing big cities and nobody was doing delivery ordering in smaller markets, so EatStreet had open space and time. Today, if you have a good idea, someone else probably has it too, and Matt doesn’t think a company starting now gets the luxury of two and a half years. Jon Eckhardt made the opposite case, that constraint keeps founders honest, when he laid out the founder forward vision for UW-Madison. Put the two conversations side by side and you get a pretty honest picture of the tradeoff.
Raise on the Story, Not the Spreadsheet
EatStreet raised because the numbers were impossible to argue with. Matt sees that as the problem. In his first Series A pitch, investors wanted every single number, for a $2.5 million round from a company that had only raised $500,000. His view is that Series B is where the model should get ripped apart. Series A should still be about vision, strategy, and whether investors believe this team can pull it off, because waiting for the numbers to come in can be what kills the company.
What he looks for now is founders who are obsessed with their idea, will roll up their sleeves, and know their numbers well enough to answer questions with conviction, even when the projections are guaranteed to be wrong. One early angel investor wrote Matt a $100,000 check after a single 30-minute call, then introduced him to more people who could write checks. That speed let EatStreet move faster. Compare that to the six months some $50,000 checks took, complete with cohort analysis. Matt’s reaction to that kind of diligence at that size: what are we doing here?
Dilution Is Just a Math Problem
Most of that first $2.5 million went to people, and one hire changed how Matt thought about the whole company. The sales team was all 22 to 25 year olds straight out of college. Then EatStreet hired Dave, a 30-year sales veteran in his 50s with a background selling to restaurant owners. Matt was nervous Dave didn’t understand the technology. Dave went out to his first market and set every record. He made the rest of the team look like kids, and Matt admits they were kids. That’s when it clicked that more capital meant more people like Dave.
First-time founders ask Matt all the time whether he worried about dilution. His answer is that it’s a math problem. The next round was $10 million for roughly 20% of the company. Can he make his smaller slice worth more than the bigger slice would have been? If yes, take the money. By the Series B, the model was a formula. EatStreet had done it in 15 markets and had the data to show what another 15 or 20 would look like.
The Board Said His Job Was on the Line
The Series C was a bet on last-mile delivery. In the original model, the restaurant handled delivery, which meant EatStreet could mostly sign pizza places and Chinese restaurants. In Madison, that capped out around 100 restaurants. The market was split on whether doing delivery yourself was smart. Grubhub’s CEO had publicly trashed it as a business model. So EatStreet ran a test in Madison, and the restaurant list went from about 150 to more than 600.
The data said go. The board said it was a mistake, and made it clear that if it didn’t work, Matt would lose his job. Matt’s math was simpler: if he didn’t do it, the business would fail, and he’d lose his job anyway. They raised $30 million and went for it. The lesson Matt takes from it is that the CEO has to own the strategic vision and run with it. EatStreet also reached profitability while paying every driver a W-2 wage, which a lot of people told him couldn’t be done.
Getting Out-Raised
At its peak, EatStreet was processing $25 million a month in transactions and bringing in about $65 million in revenue. It still got out-raised. Marketplaces tend to be winner take all or winner take most, and when DoorDash raised almost $2 billion from SoftBank, it started flooding EatStreet’s markets with capital. More venture money was off the table. EatStreet had to stay profitable on the way down, and it went from 350 employees to 100 over two and a half years. Matt calls that stretch the worst two and a half years of his life.
He does wonder about one what-if. Silicon Valley VCs kept telling him they liked what EatStreet was doing, but they’d only go further if he moved the company out there first. Nobody offered a term sheet with the move as a condition of closing. Could relocating after the Series B have changed things? He’ll never know. He loves Madison, and when EatStreet acquired a company in Philadelphia, seven of its eight people moved to Madison.
Leaving Isn’t the Same as Failing
Matt says EatStreet was his identity for so long that he couldn’t see how miserable he was. He wanted to be there at the end, to get it sold. Then he walked into a board meeting and said, “In six months, I’m done.” Admitting the company would go on without him was brutal. What he wishes he’d heard sooner is that he didn’t have to be there. Now he says it to the founders he works with all the time. You founded it, but you don’t have to run it.
Laura pushed on the words people attach to this: quitting, failure. Matt’s answer was that over 90% of Series A companies don’t make it, and saying that out loud helps founders understand they aren’t failures. The founders he actually worries about are the ones who can’t let go, like the founder putting expenses on a personal credit card after raising a couple million in venture capital. That’s when it’s time to call it. If the identity piece hits close to home, our conversation with founder coach Michael Ceely about helping founders get out of their own way is a good next listen.
Every Stage Needs Different People, Including the CEO
Matt had essentially three different executive teams over 13 years, because the Series A, B, and C versions of EatStreet needed different skills. Some early hires loved scaling with the company. Others didn’t, and Matt wishes he’d had the honest conversation sooner. Some people thrive with no process at all. Others want to know where the playbook is. He learned it about himself too. At peak, EatStreet had about 4,400 people on payroll counting drivers, and Matt never wants to do that again. Zero to 100 people is what gets him out of bed.
That’s what SeriesUp is built around. Early-stage companies didn’t need someone like Matt full time, so he went fractional, hit four clients within three months, and hit capacity. Now it’s eight people serving 14 companies. Matt says the job is more therapist than anything, because he’s been in the CEO’s chair. His pitch to CEOs is simple: you go run go-to-market, and SeriesUp keeps everything else running. He’d rather have a CEO in every Fortune 500 pitch than doing everything okay. A founder who says they don’t need an executive team is a red flag. You need to hire people who are better at those things than you are.
Wisconsin Needs Exits
Every full-time employee at EatStreet had stock, on purpose. What drove Matt was imagining a million dollars landing in an early employee’s bank account, and what they’d do with it. As a broke college student, he wasn’t really taking a risk when he started EatStreet. His early employees now have mortgages and families. A payout would have let them take the risk to start or join a company themselves. Matt thinks that’s a big part of how Silicon Valley became Silicon Valley. Laura added that when early employees make money from an exit, it recirculates into the community. It’s why a story like Nick Myers’ healthcare AI exit with RedFox AI matters beyond the founder.
EatStreet didn’t get that ending, but its people are still feeding the ecosystem. Former employees have gone back to 10-person companies to run the playbook again, started their own, and helped founders at StartingBlock, the hub we covered in evolving the path to entrepreneurship in Madison. Matt is doing the same thing from the CFO seat. He’s proud he built EatStreet in Madison, he’s still there, and he wants the next generation of Madison founders to get the exits his team didn’t.
Transcript
[00:00:00] Matt Howard: One story that I always love, just to, like, put things in perspective, and, like, this was in 2010, which was my junior year of college when we first started getting EatStreet going.
[00:00:11] Matt Howard: And how we would send the order to the restaurant was through a fax machine. That is literally how every order was delivered. It was not an email. It was not a tablet. I mean, tablets weren’t, didn’t exist yet. Like, the i- the iPad wasn’t out yet.
[00:00:25] Jacob Miller: Hey everyone, and welcome back to the Startup Wisconsin Podcast, a show where you can learn about Wisconsin’s growing tech scene through stories of startups, founders, investors, and the talented people making it all happen. This episode is part of our series presented by Valency Fund, and Laura Strong from Valency will be your host today for the interview. Her guest today is Matt Howard.
[00:00:48] Jacob Miller: Matt started EatStreet as a junior at UW-Madison in 2010. Back when ordering food for delivery meant calling a restaurant, reading your credit card number out loud. Back then, EatStreet actually got your order to the kitchen with a fax machine. He bootstrapped it for two and a half years, raised more than $55 million across three rounds, and grew it to 350 employees and 4,000 delivery drivers.
[00:01:16] Jacob Miller: He then watched a competitor with $2 billion from SoftBank flood his markets. 13 years in, he walked into a board meeting and said it was time for him to leave the company and focus on something new. Today, he runs SeriesUp, where he and a team of eight sit in the CFO and COO seat for 14 early-stage companies.
[00:01:38] Jacob Miller: In this discussion, Laura and Matt get into the parts founders don’t usually say out loud. Raising on a story instead of a spreadsheet, telling your board you’re doing the thing they said would cost you your job, and why letting go of the company you built is not the same as failing. All right, folks, let’s get into it.
[00:01:57] Laura Strong: So thanks for joining me, Matt.
[00:01:59] Matt Howard: Of course. I’m excited to be here.
[00:02:00] Laura Strong: I’m excited to talk about a lot of different topics, um, starting with if we could go into the way back machine to you’re a college student, and can you kind of paint the landscape for us for what existed in the world at that point?
[00:02:20] Matt Howard: Yeah. It’s, it’s funny ’cause, like, I mean, the whole creation of EatStreet when I was a college student came out of the idea that at that time I would still call... I- whenever I wanted to order food for delivery, you had to call the restaurant, say what you wanted, give your credit card information over the phone, and then they would deliver it to you.
[00:02:39] Matt Howard: Um, and it’s like, it’s hard to even think that that was a world, uh, back then, but it was like, yeah, no one placed orders online or used a phone to do those things. And I feel so old now talking to people. It’s like, yeah, mobile apps weren’t around when we created EatStreet. ’Cause they’re like, “Oh, I’m assuming it was an app.”
[00:02:56] Matt Howard: It’s like, “No, it was a website to start with.”
[00:02:58] Laura Strong: Oh, my gosh. I didn’t even realize that.
[00:03:01] Matt Howard: It was years later... that we built the mobile app. I think one story that I always love, just to, like, put things in perspective, and, like, this was in 2010, which was my junior year of college when we first started getting EatStreet going.
[00:03:16] Matt Howard: And how we would send the order to the restaurant was through a fax machine. That is literally how every order was delivered. It was not an email. It was not a tablet. I mean, tablets weren’t, didn’t exist yet. Like, the i- the iPad wasn’t out yet. So it’s just funny that, like, looking back, it’s like you place the order online, and we fax the order to the restaurant, and then the restaurant made the food and delivered it to you.
[00:03:39] Matt Howard: But that was a huge step up from calling the order in, you know, over the phone. Um, and now that I even think too, like, we didn’t even have credit card processing set up on the original website. So it, it was cash only, so then you had to pay the driver when it got there. So it’s like, it’s only been, what, 16 years since then, but, like, a lot has changed.
[00:03:59] Laura Strong: A lot has changed. I can’t even imagine, like, having to pick up the phone and call a restaurant. I would probably just be like, “Yeah, let’s order from s- from somewhere else.”
[00:04:09] Matt Howard: Well, I’m assuming if you called a restaurant right now to place an order, they’d be like, “Uh, what are you doing?” Like, just...
[00:04:14] Laura Strong: Can you just do that online?
[00:04:15] Matt Howard: Yeah, like, they don’t wanna do that either, and that’s... Like, that was eventually part of the s- the selling point, was like, your staff should be focusing on making food and fulfilling orders, not on the phone, ’cause it takes a while. What do you want? You know, what, you know, do you want pepperoni on half the pizza, on the full pizza?
[00:04:32] Matt Howard: Like, all those things take time. And then giving the credit card is, like, that takes time too. Also not the, like, safest way to protect your credit card information.
[00:04:41] Laura Strong: Yeah. That’s, that’s so true. Okay. Well, that’s good context. So you are a junior in college. You’re solving a problem that you had.
[00:04:50] Laura Strong: So for folks that don’t know, you went to UW-Madison. You’re a Badger. Woot, woot.
[00:04:54] Matt Howard: Yeah.
[00:04:55] Laura Strong: How did you end up at UW?
[00:04:57] Matt Howard: So I am from very small town Wisconsin. And when I say very small town, like that can be relative. I had 500, there’s 500 people in my hometown.
[00:05:06] Matt Howard: Um, now the, my graduating class in high school was still 140 people, but it was because there was eight cities put together into one.
[00:05:15] Laura Strong: Gotcha.
[00:05:15] Matt Howard: So when I say like rural Wisconsin, like very much rural Wisconsin. But it was nice because it was, I had Oshkosh, Appleton, and Neenah very close to my house.
[00:05:23] Matt Howard: So within 15 minutes I could be in any of those cities. But I knew that when I graduated, I, like state school was the smart financial decision. Um, so I knew state school was where I was gonna go. And then I knew that I wanted to not know everyone’s name. Like, I remember thinking like in high school, like, look, I had a great high school experience, but I was like, I knew everyone.
[00:05:45] Matt Howard: Everything about them. I wanna try something new. Um, so UW just made sense. You know, tuition costs have gone up quite a bit since then, but at the time it was a very good financial decision to go to a state school, getting in-state tuition. I was the first in my family to go to college, so, um...
[00:06:02] Matt Howard: It was a new experience for my family as well. You know, I had to kinda learn what it was to apply for financial aid, you know, g- apply to college. Like n- my parents didn’t go to college, none of my cousins did. So like it was definitely a learning experience, but I knew that I wanted to go to a state school, and I knew that I wanted to go to a, a bigger school.
[00:06:20] Matt Howard: So UW-Madison made sense. So once I got into Madison, it was like, well, I’m for sure going here.
[00:06:24] Matt Howard: So yeah, that’s what brought me to Madison, and then I just fell in love with it. Like, it’s the perfect, for me, it’s the perfect size city. Like, I travel to very large cities all the time. I go to New York every single month right now for a client.
[00:06:35] Matt Howard: And I love going there. I love visiting it, but like Madison to me is like the great middle ground of an awesome city that still has great perks in it. And it just feels accessible to me from being s- in, from such a small town.
[00:06:48] Laura Strong: So when you came to Madison, did you have an idea for where you were headed after Madison in terms of career or geography or anything like that?
[00:06:57] Matt Howard: No. I mean, I, I was the typical student trying to figure out, like, what I was gonna do with my life. You know, I, I think first semester of college if you asked me, I said I was gonna be a doctor.
[00:07:07] Matt Howard: And then that quickly, I think, uh, I think the chemistry classes really convinced me otherwise on that topic. Then it was like, “Okay, let’s go and let’s look at business classes.” So I started taking business classes. And then honestly, before I got the phone call from my co-founder to start EatStreet, I was also the stereotypical, uh, Madisonian thinking, “Well, I’ll just go work at Epic.”
[00:07:26] Matt Howard: You know, that’ll be a great for... and it’s amazing first job right out of college. So that was literally what I think I told myself is like, “I’ll just go work at Epic.” And even once EatStreet got going my junior year of college, like, we didn’t know if it was gonna be going enough to really support.
[00:07:41] Matt Howard: Like, I had student loans to pay for. I had rent to pay for. And so I still applied for Epic. And, and I ended up not doing the final interview and deciding that I was gonna do EatStreet instead. But that was, like, ultimately the path is like, “Well, I’ll just take business classes.
[00:07:55] Matt Howard: I’ll do the business school, and then I’ll go work at Epic, and I’ll figure it out from there.” So that, yeah. Obviously, that didn’t pan out exactly the way it, uh, I had planned, but I think, I think it worked out quite well.
[00:08:05] Laura Strong: It worked out quite well, because you started EatStreet your junior year, and, you know, kind of if people know anything about EatStreet, you know, you had many of the l- letters of the alphabet in terms of fundraising, and certainly scaling was alongside of each of those, those letters.
[00:08:25] Laura Strong: And so you know, and you played a very active role in that company during that entire time period. So you learned a whole lot...
[00:08:34] Matt Howard: So much...
[00:08:35] Laura Strong: at EatStreet. Um...
[00:08:37] Matt Howard: So much. Yeah, I mean, I just... And that’s what I’m always so grateful, is, like, seeing the growth journey from zero to, you know, we got up to about 65 million in revenue, um, about 250 million a year in sales.
[00:08:50] Matt Howard: Like, seeing that whole growth journey, you just learn so much, and that’s what I’m so grateful for, is, like, every stage of the business was so fundamentally different from when I first founded it, and I only could hire my closest friends, ’cause that’s all who would take the risk to working for a startup that...
[00:09:08] Matt Howard: You know, we- when we hired our first people, we hadn’t even raised money at that point. It was all bootstrapped. So it was a huge risk to join the company at the time. And then to think about when I look back, and it’s like my executive team was, by the end of my journey at EatStreet, was just, like, so been there, done that, like, just super professionals.
[00:09:30] Matt Howard: Like, I just, like, pinch myself. Like, I got to work with these people. Um, and it was just, like, such a fun journey throughout, and I could’ve never learned everything that I learned at just a normal corporate job. No offense to Epic, but I learned a lot more doing what I ended up doing.
[00:09:46] Matt Howard: So I’m al- I’ll always be grateful for that.
[00:09:48] Laura Strong: Yeah. So those early founding days, you said, were bootstrapped. So when you think about that, was that a choice, or was it simply like, “Nobody’s gonna give us money, so we better try and bootstrap it to see if we can make it work”?
[00:10:02] Matt Howard: It was even worse than that. It’s, we didn’t even know that venture capital was a thing.
[00:10:07] Matt Howard: Like, we legitimately thought that that’s how you did companies. Like, my, my dad started a machine shop, um, when I was younger, and watching him grow it, like, my assumption was like, oh, you just, you naturally grow a company. You don’t take money from other people.
[00:10:23] Matt Howard: But I, what I love about the first couple years, I mean, it was about two and a half years of bootstrapping the business, is I had to wear every single hat because we didn’t have any money to hire people to wear those hats, and I truly knew everything about my business before I started hiring people to take those roles.
[00:10:40] Matt Howard: And that’s what funding allowed us to do. And I, I’ll never forget, like, the person who actually said, like, “Are you guys looking to raise venture funding?” Is, is Scott Button here in Madison. Who’s been, like, a personal mentor of mine for many, many years because we entered a business plan competition, and he’s like, “You have something here.”
[00:10:56] Matt Howard: Like, we, I mean, they picked u- They, we won the competition, and I’ll never forget what he said. He’s like, “You should look at raising venture capital.” And it was, like, not even a thing that I really understood. It was a cool journey. I’m glad that we bootstrapped it. It’s a little bit harder to do that today, like, in this environment with startups.
[00:11:11] Matt Howard: But at the time it worked out quite well.
[00:11:14] Laura Strong: What do you think is more challenging about it today in terms of bootstrapping?
[00:11:19] Matt Howard: I just think things move a lot faster today. Like, if you have a good idea, someone else probably has the same idea, and they’re gonna come for it.
[00:11:26] Matt Howard: Um, so, like, how I kinda think about it is at, back then, especially in the food delivery space, there was kinda like open field. Like, no one was really doing it in the smaller markets. So, like, Grubhub was going in the bigger cities, but no one was doing it in the smaller cities. So we had, like, open green space.
[00:11:44] Matt Howard: So I didn’t feel like every day like a competitor was coming for me. Now, that did change quite a bit, but at that time, like, I just feel like companies now are, like, the pace is just faster. You’ve gotta move faster, which is what I love about what I’m doing now with consulting, ’cause I can c- I can help them on that journey.
[00:12:00] Matt Howard: I don’t think we’d have the luxury of taking two and a half years to bootstrap it, um...
[00:12:05] Laura Strong: Yeah...
[00:12:05] Matt Howard: like, like if we had started the company today.
[00:12:08] Laura Strong: Yeah, that’s an interesting topic ’cause I think this idea of bootstrapping and kind of like, you know, but then you have to have enough traction, um, to kind of have the investor interest, right?
[00:12:22] Laura Strong: So like it’s that chicken and egg of how much do you need to have built out to have your investors believe versus not ever getting there and, and, um, you know, just constantly pitching an idea that never gets that sort of initial traction to attract that initial investor.
[00:12:41] Matt Howard: 100%. And this is one thing where I am excited that I’m seeing more deals in Madison and Midwest companies not have to necessarily have everything figured out before they raise money.
[00:12:52] Matt Howard: I think that was one thing, like on our journey, in the early journey of EatStreet. The reason we raised money is we had the numbers to raise money. I mean, we were already in our, you know, first year we had $100,000 in revenue to the business. So like we were at a point where it was like, it was, you couldn’t really argue against the numbers.
[00:13:08] Matt Howard: The problem with that is like, again, companies are built fast today and like, you know, ultimately you wanna be able to raise money on the story and the founding team. And we need investors who are willing to make that jump. Um, ’cause like waiting for the numbers to come in could be the death of the company.
[00:13:27] Matt Howard: You know? So like selling them on the vision, the strategy, what you’re building is so important. And like I think we’re getting better at that, where when I was raising money in the very early days, all they cared about was the numbers. And it’s like that shouldn’t be really until about a Series B investment.
[00:13:42] Matt Howard: Like Series A should still be focused on like vision, story, do you believe that we can make this happen?
[00:13:47] Laura Strong: Yeah.
[00:13:48] Matt Howard: And less about the numbers. So like looking back, I’m excited to see the change on investors getting it, investors understanding like those early stages, I am taking a bet on the person and like the overall vision and strategy, not necessarily like they have all their numbers figured out.
[00:14:05] Matt Howard: And that’s what allows companies to move faster. So like, you know, you hear companies in Silicon Valley that raise $50 million pre-revenue, and it’s like, yeah, it’s we need to get better with the idea that you don’t have to have all your numbers figured out in these early stage investments.
[00:14:18] Laura Strong: I agree. And one of the things that I find super interesting about the early-stage team is how you gauge...
[00:14:28] Laura Strong: And this can be like a signal of traction, right? But for an early-stage team, if you think about what are the metrics that you could say are traction in terms of a team, I think on the coasts, a lot of times you get this, “Oh, well, they were, you know, one of the first 10 employees of OpenAI,” or when it, you know, fill in the blank of whatever the exciting technology is.
[00:14:52] Laura Strong: You know, for many of us, it’s, it’s a different kind of metric, and I kind of have some idea of, of what I look for. Do you have any ideas of kind of for those investors, how you would think about picking a team?
[00:15:09] Matt Howard: So now, like with, uh, what I do today with consulting, like I love founders who are very passionate about their idea.
[00:15:15] Matt Howard: And that are gonna roll up their sleeves to get the job done. And then also I would say they know their numbers well. Like look, I don’t think you have to have all of your numbers figured out. Like at these early stage investments, you sh- you shouldn’t. Like, that’s not the stage that you’re raising.
[00:15:27] Matt Howard: At a seed round, you know, again, even to Series A, like you are still figuring things out. Like, you know, I don’t expect you to have your cohort analysis built out perfectly. But I expect you to be able to answer the questions with enthusiasm why you believe you can get there, and like back it up with some type of data of some sort.
[00:15:46] Matt Howard: You know, for, for EatStreet, for instance, it was always like, “Okay, look at what we did in Madison, now we’re gonna go replicate it across more markets.” And, and I think we had a pretty compelling story. Now, we had more data to be able to do that, ’cause we bootstrapped it for a few years. But I just l- I love founders who are passionate about their business, that understand their numbers, and really can say like, “This is how we’re gonna make it happen,” even though we all know i- it’s, their financials are gonna be completely off from what they projected.
[00:16:14] Matt Howard: All of that. But they have to believe in what they’re doing. So like, that’s where if I was an early stage investor, I know that I’m investing in the team and the people. And like, yes, it’s really great. Like, I would love to invest in people who have already worked at a startup. You know, like I’ve...
[00:16:29] Matt Howard: There’s been EatStreet early, EatStreet employees that have now gone on to, to build their own companies, or that have joined other early stage companies. And I know that they’re getting those jobs and those positions because they have that experience.
[00:16:41] Matt Howard: But like for, you gotta give first time founders a shot too.
[00:16:44] Matt Howard: And how I think about it is if they have the passion for the business, they can really talk through how they’re gonna get there, that’s what I’m looking for.
[00:16:50] Laura Strong: And then you bring in your first institutional round.
[00:16:53] Laura Strong: You bring in capital from the outside to really start to scale what you’ve shown here in Madison. Tell us what that looked like.
[00:17:03] Matt Howard: The original funding round, um, which we had called it our, our Series A, but, but ultimately it was a pretty small Series A. It was two and a half million, and what most of that went into was just being able to hire the team to more rapidly expand the business.
[00:17:17] Matt Howard: It was all, I mean, with most technology companies, most of your costs are your people costs. And it allowed us to get the true professionals. Like I’ll n- I’ll never forget one of the first people we hired was like a been there, done that, 30-year career salesperson. And like at that point, everyone else on the sales team was between the ages of 22 and 25, and it was all people directly out of college, no actual sales background experience.
[00:17:42] Matt Howard: And he walked in and he’s like a very close personal friend of mine at this point, but what he, what I learned from that experience was like, he knew how to sell at his core. That was what... He built his career around it. And I... He left to go off, ’cause we would fly people to markets, and they would go from city to city, and they would be on the road for two weeks every single month.
[00:18:00] Matt Howard: And he went off to his first market and I’m like, “I don’t think he fully understands what we do.” Like, I was like a nervous... Like, he, I mean, he was in his 50s and he was like... I was like, “I don’t think he understands the tech- technology enough.” He set every record at his first, at his first market.
[00:18:17] Matt Howard: ’Cause it’s just, he know, he knew how to sell, and he knew how to sell, like, restaurant owners. Or you know, like he, he had a background in working with restaurant owners too. So it’s like finding someone that was like been there, done that, and has built a career around it, and he made us all look like kids.
[00:18:33] Matt Howard: But we were kids. Like we, at that time. It was an eye-opening experience to be like, oh, now if I c- if I raise more money, I can hire more people like Dave. And I need to be able to do that. So I think that’s what that original funding was like, okay, we wanna take this from Madison, you know, to Iowa City, to Minneapolis.
[00:18:50] Matt Howard: We wanna ke- like cookie cutter the model across all these markets, and we’re gonna need the team to be able to do it. And, and that was like my first learning experience is like, you can start hiring people that have done this before. You don’t have to hire only your friends who would be the only people that will take this job.
[00:19:04] Matt Howard: Um, so that’s ultimately what the funding allowed us to do and just invest more in the business. And then, you know, it very, became very clear to me through that, after that first kind of two and a half million into the business, it was like, oh, this is a math equation. Like, I can build the company and the market cap of the company a lot faster if I raise money.
[00:19:23] Matt Howard: And a lot of like first time founders ask me, they’re like, “Well, were you worried about dilution?” And it’s like, again, it’s a math problem. Can I take, you know, the next round was 10 million. Can I take $10 million and take the 20% dilution? So yes, I personally now own 20% less of the company, but can I make my smaller portion worth more in the end?
[00:19:41] Matt Howard: And if the answer’s yes, then why wouldn’t I, you know, take the money. So ultimately it was a really good learning experience. And, and like once we started raising capital, I saw the value of like, oh, we can grow this thing a lot faster with that support and, and get the people that are really qualified to do so.
[00:19:57] Laura Strong: Yeah. So how did you get to the point where you really had such a level of confidence in if I do A, B is gonna happen on the revenue on the sales side?
[00:20:09] Matt Howard: Yeah, and that’s like the post, again, like post-Series A. Like when I always tell founders, like when you’re going out for Series B, the numbers have to be working. Like i- y- your model is going to get ripped to shreds if, if you don’t have it all built out. So I think what was really helpful when we went from A to B, the numbers were very clear on if we put this money into marketing and sales, this is what we’re gonna get out of it.
[00:20:31] Matt Howard: Like it was, it was very much an equation at that point. And like when I say cookie cutter the model across more markets, it was a combination of just saying like, “Okay, we’ve done it now in 15 markets. Let’s bring it to another 15 or 20.” And like we had that really tight for investors. We said, “Here, you know, here’s what we’ve done.”
[00:20:50] Matt Howard: You know, and that was the beauty is like we had so many data points to be like, “We’ve already done this. We’re just gonna do it in more markets, and here’s the data to support why we believe we can hit these numbers.” Um, so ultimately that’s, that’s why we raised more money, um, for the Series B.
[00:21:07] Matt Howard: Now, for the Series C, the main reason for the Series C was we wanted to enter last-mile delivery because a lot of people assumed that we had always done last-mile delivery. Back to the, the original how we started the business, we would just send the order to the restaurant and the restaurant would fulfill the delivery.
[00:21:24] Matt Howard: That’s how the whole industry started. Now, the problem with that model is you could only sign usually Chinese restaurants, pizza shops. You know, it was, there was only a subset of restaurants. So in Madison, we capped out at 100 restaurants.
[00:21:39] Laura Strong: ’Cause you were really reliant on the restaurant to have the infrastructure to deliver the food.
[00:21:45] Matt Howard: Yes. Yeah. And the model was 10 times easier in just being a peer marketplace, ’cause at that point we were a two-sided marketplace. When we added the third side and went into last-mile delivery, um, we did some tests. So like, we never really went all in on anything until we put some data behind it at that stage.
[00:22:02] Matt Howard: So we had the capital and enough of the runway to be able to run our own tests and say, “Let’s launch delivery ourselves, trial it out. Let’s see what the data is saying.” Because there was mixed messaging in the market about last-mile delivery being good or bad at that point. I mean, the CEO of Grubhub was, was quoted saying it was a [bleep] business model.
[00:22:21] Matt Howard: Which I think he probably regrets saying that at, uh, at this point. Um, but you know, so there was a lot of confusion in the market. And, and we said, “Let’s run a test and see if this is something that we wanna make a core part of our business.” And we ran a test, and all the metrics looked amazing.
[00:22:39] Matt Howard: ’Cause what it allowed us to do is sign any restaurant. So, and we ran the test obviously in Madison, the home market, so we could watch it closely. So we brought our restaurant list from, I think at that time it was probably, like, 150 restaurants to over 600 like that. And it was just the, the ability for consumers to get restaurants that typically did not do delivery.
[00:22:59] Matt Howard: Again, like, it’s so easy to say this now, but like, this is not how the world worked 10 years ago. Um, so you know, it unlocked a huge amount of supply. And then being able to control the experience on the driver side. It was really those, you know, those two core premises that really said, “You need to go into last-mile delivery because we can sign every restaurant, and then we can control the quality.”
[00:23:22] Matt Howard: Because Friday night when restaurants get slammed, they don’t have technology to really say, “Okay, how do we batch these orders together? What driver do they go to?” All of that. So ultimately, we knew we could do it better than any individual restaurant. So the test went really well, and I went back to the board, and I remember this.
[00:23:40] Matt Howard: I’ll never forget the conversation, ’cause they really did not wanna go into last-mile delivery. Like they said, “We think this is a mistake.” And they made it clear that my job was on the line. That if we, if we, we mi- went through with this and it didn’t go well, that ef- effectively they said I was gonna lose my job.
[00:23:58] Matt Howard: And, you know, I knew at that point, I was so dedicated to the fact that if I didn’t do it, I was gonna lose my job ’cause the business was gonna fail.
[00:24:07] Matt Howard: So it was, uh, it was one of those learning experiences, like you as the CEO have to decide the strategic vision of the company, and you gotta run with it.
[00:24:16] Matt Howard: And I was very, again, because we were later stage at that point, we could run the test, get the data, and the data said, “Run. Go. Do this.” So that was what the premise of the Series C was, is like, we can acquire a business. We can get into last-mile delivery pretty aggressively. Here’s why it’s a smart decision to go into last-mile delivery.
[00:24:34] Matt Howard: And that’s ultimately where we raised the $30 million. That was our Series C. You know, it’s a growth journey for sure. You know, B was all about the metrics and repeating the model that we already did, and then C was all about let’s go build a really big company, and let’s do it through last-mile delivery.
[00:24:48] Laura Strong: When you think about the people that started the journey with you, and then you’re going through technology changes, you’re going through business model changes, was it difficult to keep people excited about, “Here’s the company we’re building, here’s where we’re headed”?
[00:25:04] Matt Howard: I have learned a lot about not only myself, but also, like, how a company should scale over time with people. And what I mean by that is, like, now today, I know I am meant for earlier stage companies. Like, like, EatStreet at our peak got up to 350 full-time employees, and then we had 4,000 delivery drivers on top of that, ’cause we did W-2 wage for all of our drivers, so they were truly our employees.
[00:25:27] Matt Howard: So, you know, 4,400 employees was where we peaked at, and I know myself well enough now that I don’t ever wanna do that again. Um, and where I really have found my calling is that g- going from 0 to 100 people. Like, to me, that is the most exciting stage. It’s what gets me out of bed every morning. It gets me very passionate about businesses.
[00:25:49] Matt Howard: And I think it’s what I’ve learned about growing a team as well is there’s a lot of people that have the, the, they need to come to that realization themselves. So, like, the, the first employees that I hired were all just rock stars. That’s why we were able to get the business off the ground. But ultimately, some scaled with the company and loved it.
[00:26:08] Matt Howard: Some did not scale with the company and did not like it. And I wish I had known earlier in my career. I mean, I was a very young CEO, so I was still figuring it out. I wish I had realized and been able to have the honest conversations with them of like, “Look, the business has changed a lot since you joined.
[00:26:25] Matt Howard: You don’t seem like you’re liking it anymore. Let’s figure out how you transition out of the company and figure out what’s next for you.”
[00:26:31] Matt Howard: And I think that that is a good sign of a leader to recognize when someone is getting over their skis, because no one likes to be over their skis. No one likes to feel like, “I’m not doing a good job.”
[00:26:43] Matt Howard: But also, like, every stage is different. Like, some people don’t like red tape, corporate structure, policy, process. Like, there’s, there was no process i- in the early days. Like, we just all were working together to figure it out. And some people are really meant for that, and some people are like, “Why don’t I have a playbook?
[00:27:01] Matt Howard: You have to tell me my job.” And it’s like, “No, like, you have to figure out your job.” And, like, they’re very different from Series A to Series B to Series C. Like, I had essentially three different executive teams over the course of 13 years, and it was because the company needed a skill set that was different from the, the prior team.
[00:27:19] Matt Howard: And also the prior team, sometimes they just didn’t want to be there anymore because the business fundamentally changed.
[00:28:31] Laura Strong: So when you think about EatStreet and the progression, so you’ve gone through technological progress. You’ve gone through the addition of, you know, last-mile delivery.
[00:28:42] Laura Strong: Now you’re a very large company. Can you talk about kind of the scale of the organization, where you got to, and then fundamentally, you know, what happened with EatStreet and with you in terms of making a change.
[00:28:59] Matt Howard: Yeah. So I’ll never forget, like, I mean, at our peak, I mean, we were processing $25 million a month in transactions.
[00:29:08] Matt Howard: And I just remember thinking like when we crossed those thresholds, um, it was just like we are, we are really actually making an impact on our restaurant partners. We have, you know, 350 full-time employees at this point. Like, it did get, from my perspective, it got big. 350 for some people is like, that’s a tiny company.
[00:29:26] Matt Howard: For me, that’s a very large company, and I will always probably feel that way ’cause I’m gonna stay at the earlier stage companies kind of from here. But ultimately, I think on that journey, although we had raised over $55 million in venture capital, we got out-raised. And, and although we did some great things, and like I said, we were processing $25 million a month in sales, marketplace businesses are really tough.
[00:29:51] Matt Howard: And a lot of them are winner take all or winner take most, and that’s ultimately where food delivery went down. So, although the journey was, was fast and furious on the upward trend, it was also fast and furious on the downward trend. And so with my journey, I was definitely the CEO that’s like, “I’m gonna be here until the end.
[00:30:10] Matt Howard: I’m gonna figure this out.” Where, you know, our goal was to get, get the business sold. It just did not work out. We tried multiple times, and it just, uh... That we would, uh, we would probably need a beer to have that whole conversation. Um, but ultimately, the competitor started raising billions of dollars in capital.
[00:30:27] Matt Howard: So DoorDash came in, raised over a billion, over almost $2 billion in capital from SoftBank. And before we knew it, they were flooding our markets with, with capital.
[00:30:36] Laura Strong: Mm.
[00:30:37] Matt Howard: And it was very clear at that point that we were gonna have a rough road ahead of ourselves. So, you know, by the time I left EatStreet, we were down to 100 employees.
[00:30:45] Matt Howard: So to go from 350 to 100, and that was over a two-and-a-half-year period, that was the worst two and a half years of my life. And that’s where, like, I can really feel the empathy for founders, you know, if they have to do a RIF or, you know, a lot of times you come on hard times.
[00:30:57] Matt Howard: And it’s like, I’ve been through those hard times. It was not all rosy through the journey. Um, we can talk about how, yes, we raised Series A, Series B, and Series C, but, like, it was a grind to get all of tho- that journey done. And then once we had competition that was just coming for us, it was constantly figuring out how we were gonna survive, ’cause we knew we weren’t gonna raise more money at that point.
[00:31:18] Matt Howard: We knew that raising venture capital was out of the question. So we were a profitable business. I was very proud that we got to profitability. A lot of people told us we couldn’t because we were, um, doing W-2 wages for our drivers. We definitely proved that wrong. So I was very proud of that, but we had to keep it profitable on the downward trend.
[00:31:37] Matt Howard: And I definitely look back and I had too much of my identity in EatStreet at that time that I could not recognize that I was absolutely miserable, and I didn’t want to do it until the end. And I finally, I don’t remember exactly what my breaking point was exactly, but I remember going to the board and just being like, “In six months I’m done.
[00:31:57] Matt Howard: Like, I can’t do this anymore. It’s not what I signed up for.” Um, and I, and I think I just lost the passion. Like, ultimately my, I was only there because I wanted to get it sold and find, you know, the, the end. I wanted to be there on the end. Yeah. And like, it was so hard for me to admit the company was gonna continue without me, and I wasn’t gonna be there at the end.
[00:32:18] Matt Howard: But I’m glad I did. I wish I had a little bit more encouragement from people around me to say like, “Hey, you don’t have to be here. Like, you don’t have to be doing this.” Um, so the, and I remind founders in my consulting all the time, just be like, “To be clear, you don’t have to run this company. You aren’t forced to.
[00:32:37] Matt Howard: Yes, you founded it, but if you’re not happy and you’re not enjoying this, you need to think long and hard about your journey.” And now, like when I sit here today, leaving EatStreet was the hardest thing I’ve ever done, but also the best thing I’ve ever done. Like, I am so much happier. I am, like, it’s, it’s just been a great journey, and now I can take what I learned through that whole journey and apply it to other companies.
[00:33:01] Matt Howard: But it was, boy was it a rough ride. Letting go is very hard.
[00:33:05] Laura Strong: So you’ve mentioned consulting. So tell us a little bit about what you’re doing today.
[00:33:11] Matt Howard: Yeah. And I just never imagined that I would be running a consulting firm.
[00:33:16] Matt Howard: Um, but after my t- time wrapped up at EatStreet, I just knew that I wanted to really go back to early stage companies. But the problem is they didn’t need someone like me full-time in their business. Like, I consider myself like a CFO, COO combination, someone that’s gonna really understand the operations of your business, understand your numbers, be able to run all things finance.
[00:33:37] Matt Howard: Like at EatStreet we didn’t have a CFO. Like, even though I was the CEO, like I was spending a lot of my time as the acting CFO as well. So I knew that I wanted to go to earlier stage companies, and I knew I wanted to be more in like operations finance.
[00:33:49] Matt Howard: But the problem is these early stage companies, like I said, fractional was just made sense.
[00:33:53] Matt Howard: So I signed my first client, and within three months I had four companies. I was the fractional CFO, COO of all four of those companies, and I was at capacity. And what I learned through that journey was there was a lot of founders who really needed kind of that right-hand person on the ops finance side to just help be their partner.
[00:34:13] Matt Howard: I always kinda say, like, I’m more of a therapist than anything. ’Cause I’ve been in their shoes. Like, I know what they’re going through, but I take it more of an operational finance lens, which generally founders are really focused on go-to-market. They- it’s all about sales and marketing. And, like, where I come in and say, “You go run your go-to-market.
[00:34:32] Matt Howard: I’m gonna make sure everything else is run smoothly and that you have the metrics behind the business for your next fundraise and be a partner there.” And then, so it went so well that I was like, “Okay, now I feel like I should need to start repeating this and start bringing on people like myself that have built companies before to do the same thing again and, like, work at more companies.”
[00:34:50] Matt Howard: So now we went from four to 14 companies. It’s not just me. It’s now eight full-time people, and we’re just repeating the process. We’re helping kinda companies get to that next stage of growth. You know, our pitch is, like, we wanna join you when you’re in your seed round, and we wanna leave you when you’re about to, when you’re going out for your Series C.
[00:35:07] Matt Howard: Because we know that you need a full-time person at that point, but we can support you on that journey throughout. And all of us are startup people that have experienced the rollercoaster that is startups. So what I love about building SeriesUp and being a partner to these CEOs is there’s very few things that they can throw our way that we have not already experienced, and most of them are first-time founders.
[00:35:30] Matt Howard: Not all of them, but most of them are. And I think we can just be a really good partner to be like, “Yes, we’ve experienced this. This is a problem. This is how you think about it.”
[00:35:37] Matt Howard: So I’ve really, really enjoyed the work. I wanna kind of treat SeriesUp, like, I, I call it SeriesUp Consulting.
[00:35:43] Matt Howard: I’m trying to drop the word consulting, because we get so embedded in our clients that, like, we want them to feel like we are their full-time CFO. That’s ultimately our goal. Like, I’ve had people and some clients, um, like employees be like, “Oh, I didn’t realize you were fractional. I didn’t know you were part-time.”
[00:35:58] Matt Howard: I’m like, that’s a huge compliment. That’s huge. Like, that’s what I actually want. It’s the best of all worlds. I get to work in, in startups. I get to spread my time across multiple startups. I get to see best practices in one startup and bring it to another. Like, it’s just, it’s been an absolute blast.
[00:36:14] Matt Howard: I’ve really enjoyed it.
[00:36:15] Laura Strong: That’s awesome.
[00:36:16] Laura Strong: A- an interesting part, you said, you know, it’s therapy.
[00:36:18] Laura Strong: I think being able to say something out loud and be in a completely safe space, I hear that a lot from founders. It’s like, “Thank you for just letting me say that and not judging me.” I’m like, “Well, you know, we’re here to build a better company.”
[00:36:33] Matt Howard: Well, and it’s like I can- I have so much empathy for what they’re going through.
[00:36:36] Matt Howard: Because, I mean, look, being a CEO of a startup is very challenging. Uh, managing the board of directors, managing your executive team, figuring out your strategy on a go-forward basis. Like, it is hard. It’s a very hard job. It, it can get very lonely at the top, and they know that I’ve been in their shoes.
[00:36:54] Matt Howard: So the, you know, a lot of times when I say, like, I’m a, essentially a therapist, it’s ’cause they know they can call on me, and I’m not gonna judge them if they s- you know, they’re gonna bring topics that, like, I’ve experienced before, and I understand, and I can, I can take that CEO lens. And they need to focus their efforts on what they, drives their passion.
[00:37:12] Matt Howard: And in the early days of EatStreet, that was go-to-market for me. That was sales and marketing. And then over my journey, I really pivoted pretty hard into operations. And by the time that I left... So when I’m, when I’m talking to a CEO that’s a potential new client for SeriesUp, I always talk about how when I, my last five or six years at EatStreet, what really kept me involved is I got to essentially say, “Okay, go-to-market is gonna be the COO’s responsibility.
[00:37:38] Matt Howard: Everything on finance, HR, legal, and operations is on my responsibility.” And though I always joke that those are the things that most CEOs hate.
[00:37:46] Matt Howard: And that’s where I found, like, that’s what kept me at EatStreet for 13 years, was, like, I was constantly learning, constantly doing new things. And I hir- never hired a CFO, because ultimately I knew that that’s where I wanted to spend my time.
[00:37:58] Matt Howard: And you’re so right, that if I had gone down that path, it wouldn’t have gone well for either end, because I didn’t wanna let, let go of it. I loved financial modeling. I loved running the numbers of the business and understanding them at a very deep level, which I think helped me raise money as well. Like, I think because I knew the numbers so well, that definitely helped me on that journey.
[00:38:17] Matt Howard: But yeah, you’re so right. It’s like y- I love going in and being like, “Hey, CEO, we both know you don’t want to spend time in this area. That’s why you’re bringing me on, so you can focus. Like, I want you in sales pitches.” Like, I work with one company that’s, you know, I, I just told the CEO, I was like, “I want you in every Fortune 500 pitch.
[00:38:35] Matt Howard: When you’re going and pitching these massive companies, like, y- yes, your salesperson could do it, but you’re really good at it. And you’re the CEO. And if you’re in that room, it’s gonna be great.” And he’s like, “Well, I gotta make sure everything else is running smoothly.” I’m like, “Yes, that’s what you pay me for.
[00:38:48] Matt Howard: That’s why I’m here.”
[00:38:49] Laura Strong: Yeah. Which has gotta be a great feeling for both of y’all.
[00:38:53] Matt Howard: For sure. Yeah. We both get to do what we love.
[00:38:55] Laura Strong: Yeah. So, okay. EatStreet. Can you tell us a little bit? We’ve heard a little bit about the found- the founding and the first couple years of bootstrap. Letting go is very hard. I, I have to say, this is one of those topics that comes up, when a founder leaves an organization, something that they built, right? This, there’s words that we associate with it. It’s, you know, it was a failure.
[00:39:20] Laura Strong: It’s quitting. It’s all of those things. And, you know, honestly I think there’s just not enough recognition of... And you mentioned some of it, right? Like, sometimes the founder actually should have left because somebody else could have done a much better job at that particular stage of growth, right? So there’s that.
[00:39:42] Laura Strong: There’s also on a personal level, you know, if you are great at something and then your job turns into something else, even though you’re the founder, again, on a personal level, if you don’t walk away, you don’t give yourself the opportunity to do something that you love, to do something that you’re good at.
[00:40:03] Laura Strong: So, you know, this idea that, that the company has failed or the person has failed or, or the person has quit, I, I, I hate that. I hate that. And I, I think that comes back to the empathy for, you know, founders and, and early stage operators and all of the things. It’s like, yeah, there’s a million reasons why it’s the right decision that have nothing to do with quitting and failure.
[00:40:26] Matt Howard: It’s so true. I mean, look, when you make... I mean, I’m... EatStreet was my identity for a very long time. Um, and to admit that, like, I didn’t believe it was gonna get to the finish line of where I wanted it to go was, in my mind, failure. And like, look, I can now sit here today and say fundamentally, I don’t think we could have changed course much. Like, I think the ship had sailed when our competition had raised so much capital that I think we were gonna get outspent kind of no matter what we were gonna do. Sure, could there have been scenarios where I look back, I’m like, “Oh, if I had pivoted here.
[00:41:00] Matt Howard: If I’d gone into delivery earlier, that could have helped.”
[00:41:03] Matt Howard: Um, so like there are things that we could have changed, but ultimately I knew I gave it my all. And like, I can passionately say, like, I put every ounce of effort, which actually was probably a problem. Uh, like looking back, it’s like probably was putting a little too much into the company at that time.
[00:41:18] Matt Howard: I know that market dynamics you can’t control. And, and I think the... I will say the Midwest has definitely gotten better in this as well. Like, ’cause I agree with you. I think there... When I was raising capital, I remember investors in my pitches saying, like, “Oh, yeah, this company failed. The CEO was terrible.”
[00:41:36] Matt Howard: And I’m just like, that is not... Like, look, maybe that’s the case. Maybe this person was way over their skis, and it was not a good fit or whatever. But ultimately, what I love about venture capital and early-stage startups is these founders are passionate about their businesses, and they put their all into it.
[00:41:53] Matt Howard: And I would never fault someone that shuts down a company or that doesn’t get there. I actually think it’s worse when I see someone who’s like, “You should probably call this.” Like, you are... Like, when I see founders like, “Yeah, I’m putting stuff on my personal credit card,” after they had raised a couple million dollars in venture capital.
[00:42:09] Matt Howard: It’s like, no.
[00:42:10] Matt Howard: It’s time to call it. Like, that’s actually more of my concern when I see the founders who can’t let go, because I think that a... can get... lead down a really scary path. Um, so, like, I think we’ve gotten better at accepting the fact just ’cause a company closes or doesn’t make it to the exit that they want isn’t a failure on a p- on one person or a team or a market or an industry.
[00:42:33] Matt Howard: Like, that’s just part of the game. I mean, let’s be real. Over 90% of Series A companies don’t make it. And, like, I think we have to just keep saying that out loud because it’ll help founders understand that they’re not a failure.
[00:42:45] Laura Strong: If something didn’t work, again, it gives you the oppor- if you walk away, it gives you the opportunity to do it again.
[00:42:51] Laura Strong: And if you hang on too long, sometimes that opportunity isn’t there.
[00:42:56] Matt Howard: Yeah, and that’s what I always tell people too. Like, I’m like, “Don’t feel bad for...” Like, I have had people like, “Oh, I feel so bad. Like, you deserve that exit.” Like, don’t feel bad for me. EatStreet got to 350 full-time employ- I learned so much on my journey.
[00:43:09] Matt Howard: Like, I feel more bad for companies that’s like they capped at 10 people, and they kinda l- they stayed going for five more years, but not, didn’t really get any traction. I mean, we were on this growth arc for 10 years, and in that 10-year journey, you just learn absolutely so much. So, like, you know, I think that’s where I’ll always be grateful that we were able to accomplish that, because every stage of the business I learned so, so much more than I did in the previous stage.
[00:43:36] Matt Howard: So yeah. And now being able to apply those principles to early-stage companies is, like, a dream. I love it.
[00:43:41] Laura Strong: That’s awesome. So you mentioned, um, Scott Button as a mentor. Um, when you think back at your, about your journey, are there key points at which people sort of appeared or you went looking for them, or, uh, you know, what kind of people really contributed to the success along your journey?
[00:44:05] Matt Howard: Yeah, so, um, and I think Scott will say too that he was technically the first investor in the business, because he was the judge that ga- awarded us the $10,000 business plan competition first prize. I love it. Um, which I’m like, “Scott, you get to take all that credit, for sure.” Um, and so I think in that early stage it was, it was people like Scott just around Madison that, you know, they, they were venture capitalists, and they started to educate me on how this worked.
[00:44:33] Matt Howard: That ultimately led me to attend startup conferences, where I did meet my first investor, gener8tor, and they were just getting going at that point. And I literally just sat at a lunch table with Joe Kirgues, and all of a sudden he was like, he’s like, “Wait, what are you doing? How are you doing it? Uh, you haven’t raised any money?”
[00:44:52] Matt Howard: And that’s what, like, spurred that original investment, was just going to the conference. So, like, having the original mentors be like, “Hey, you need to start getting out there. If you have to start thinking about venture capital, here’s a couple conferences you can go to to meet people that are...” ’Cause it’s about networking.
[00:45:06] Matt Howard: You gotta understand, like, who are the players in the venture capital space in, in Wisconsin. So that led to kind of that original investment. And then I would say my mentor today that is always one of my go-to people eventually became my Series A and one of my Series A investors, Troy Henikoff from MATH Venture Partners.
[00:45:24] Matt Howard: It’s funny because I, I don’t know if I’ve... I think I’ve told this story before, but, like, in the beginning, we really struggled to work together because he really, uh, dived into the numbers aggressively. And, and I, and I kinda took it as like a, “Hey, do you not trust me in this?”
[00:45:40] Matt Howard: And I learned very quickly that he had all the right intentions. Like, and I saw it in board meetings. Like, he was always the first person to make an intro to a, you know, a potential, uh, acquisition that we could make or finding a new executive on our team. Like, he was just always so intentional in how he helped us.
[00:45:59] Matt Howard: So it was funny because I like, I had to kinda take a step back, and I was like, “Oh, we just work differently, but that’s not a bad thing.” And now he is the person, like, anytime he says something, I listen because he- I just, over time, I’ve just learned so much from him on this journey. Um, so whenever I have a big problem, like, he’s one of the first people I go to, and he’s always willing to jump on a call and talk through it.
[00:46:18] Matt Howard: And he’s just one example. There are so many people out there that have allowed me and helped kinda coach me along the way that I’m very grateful for, and I think that’s where founders really need to build that network of people that... And that’s where, like, again, back to the consulting thing, I’m loving my position ’cause I can be that person for these early-stage companies.
[00:46:37] Matt Howard: The, I can be the person they call, and I know their business very well ’cause I run all of their finances. So, like, I, I truly know their business. So yeah, getting a network of people that you can just go to to bounce ideas off of or like, “Am I off here?” Another, um, Ramu Sunkara, uh, was kinda my VC.
[00:46:54] Matt Howard: So he’s a Badger as well, and I- he invested simply because I was a Badger. But he started multiple companies, um, uh, sold one of his m- his businesses to Skype. Um, and he j- was just a really, like, great person to bounce ideas off of, but he was in Silicon Valley. So whenever I went out there, I would get coffee with him, and he would tell me, “This is what you have to do in a Silicon Valley pitch.
[00:47:17] Matt Howard: This is what VCs out here are, are expecting.” Like, those are relationships I’ll always be grateful for because without those relationships, it would’ve been very challenging for me to grow the company to the size that we did. And I think founders have to understand they gotta create that network ’cause it’s, it really is important.
[00:47:33] Laura Strong: What, if anything, was really special about building EatStreet in Madison or in Wisconsin?
[00:47:41] Matt Howard: Well, first of all, like I am a very proud Badger. So like, I mean, I’ve stayed in Madison for a reason. Like, I love Madison. So like being able to build a company here was great.
[00:47:50] Matt Howard: And like a lot of our early members were all Badgers. Like, we would go to games together and like... So like it was very much in our DNA that we were a Wisconsin company. And, and we had, uh, we relocated a lot of people. Like, we acquired a business that had an office in Philadelphia, and we- seven of the eight people moved to Madison as part of that acquisition.
[00:48:09] Matt Howard: So I would say it was very special to be like, this is the town that I love. You know, I went to the school here. And like seeing... And then when we started bringing people from outside Wisconsin to Madison, like that was almost like a very special moment to be like, and then watching them see like, oh, this is great here.
[00:48:25] Matt Howard: Like it’s, it’s a really great environment. So, yeah, it was just, it was definitely special to be able to build a company here ’cause we had been told multiple times that we should’ve, that we should relocate. And look, maybe that would’ve helped us in the long run, but in the early days it n- I truly do not believe it would’ve helped us.
[00:48:41] Matt Howard: Um, like I, you know, the cost of living is a lot less. The talent costs are a lot less. Like I, you know, I don’t, you- who knows how it would’ve shaped, but we were very much at our core a Wisconsin-based company that loved Madison, and it was really fun to see that. And, you know, obviously the work from home stuff has changed that environment as well.
[00:48:59] Matt Howard: Um, but I’m glad that we had the office setting, we had the people in Madison. It was a very special environment, for sure.
[00:49:07] Laura Strong: Yeah. What was the biggest challenge in growing in Madison?
[00:49:10] Matt Howard: Raising venture capital.
[00:49:11] Laura Strong: Yeah.
[00:49:12] Matt Howard: Yeah. Without a doubt. I mean, I... And that’s where like, again, like maybe in the end, like I don’t like to say this...
[00:49:18] Matt Howard: But like what would’ve happened if we raised the Series B and immediately moved the, the company out to Silicon Valley? Could we have raised the billion dollars from S- from SoftBank? I don’t know, and we’ll never know. Um, but, you know, uh, so I, I, ven- raising capital was definitely the most. And like, I do think, like again, West Coast investors, investors on the coasts in general just understand when a company fails, it’s not a failure.
[00:49:43] Matt Howard: And like, I think we have a, we still have a lot to learn in the Midwest. Like, you know, it’s back to like the, you know, prove me your numbers first. Like, I remember my first pitch raising like my Series A, and them just being like, “You have to show me every single number.” And it’s like that’s not how Series A really is done.
[00:50:01] Matt Howard: Like Series B, yes. Like you have to really understand your mission and put money in and get money out. But to have that expectation of a company raising two and a half million when they, we had only raised 500,000 at that point, is just the wrong expectation. Like that’s not how it should actually be done.
[00:50:17] Matt Howard: So like I think investors here are, are getting it. Like they understand you’re making a bet on the person. And look, if you don’t wanna make a bet on the person, don’t make the investment. Like that is... But like diving, holding them to a standard that’s not realistic for the stage of their business I think is something that I, that I struggled with. I’m just lucky that we had bootstrapped it for a few years, so we were a little bit ahead of the curve there.
[00:50:38] Matt Howard: But so I think just like the, the VC dynamics was, was definitely challenging, and I had so many VCs in, in Silicon Valley being like, “Hey, to be clear, like we like what you’re doing, but unless you are based here, you move the company here, we’re not gonna take it further.” But they weren’t giving me a term sheet saying, “Move here and we’ll make it a condition of closing.”
[00:51:00] Matt Howard: And I said that to a couple of them. They’re like, “No, we want you just here first.” So maybe that was their way of politely saying we didn’t want to invest. Um, but I n- I didn’t wanna take that leap of faith without knowing the money was coming in. So yeah, it’s definitely challenging. Again, I wouldn’t change anything ’cause ultimately, like Madison’s where I want to be. So I’m glad we built the company here, and I’ve made lifelong friendships from that. And I think we’ve... Some of the early stage employees at EatStreet have gone on to do some amazing things for Madison as well, ’cause they’ve taken what they’ve learned, and now they’re building their own companies or helping earlier stage companies build up, too.
[00:51:34] Matt Howard: So I’m very proud of that fact.
[00:51:36] Laura Strong: Okay. So tell me a little bit about the EatStreet mafia.
[00:51:40] Matt Howard: Yeah, I mean, I work with a couple of them still today. Like, that’s one thing I don’t love about building a consulting business in a specific industry, ’cause there’s so many people that I would love to hire from my early days at EatStreet.
[00:51:51] Matt Howard: Like, I don’t need a marketing person. I don’t need, you know, uh, an ops person. But like, I, there... I have such a network that, of people that I would love to work with again. What I’ve seen so many of them go do is l- repeat the process. It’s like, you know, some of them went through the, almost the whole journey, and now they’re going back to a 10-person company to repeat it again.
[00:52:13] Matt Howard: And that’s, to me, like the best thing. Like, watching them say, “I know how to do this.” No different than that’s how I feel in my consulting business. Like, I know what it takes to build a company at that stage. They’re doing the same thing. So it’s been really fun to watch, you know, and see people, see ex-employees at, at StartingBlock and helping build companies there.
[00:52:33] Matt Howard: It’s, it’s been a joy to watch. I think the thing that I struggled with, candidly, the most about EatStreet not getting to the finish line... Like, don’t get me wrong, I would have loved investors to, to make a big return, and there was moments that it was very close to happening. But the thing that really drove me was knowing that if I put a million dollars into an early employee’s bank account, the good that they would do with that.
[00:52:58] Matt Howard: Like, they would take a risk and go start a company. Like, I look back and I thought at the time I was taking a big risk to start EatStreet. I was a college student. I was already used to being broke. Like, I, I was not taking a risk. Like, there was no risk. And then thinking that I almost still s- wanted to go work at a, at Epic for a full-time job instead of running my company.
[00:53:18] Matt Howard: Like, the, like, I wasn’t taking risk. And like, now, today, it’s like, you know, all these people have mortgages, have families, and if I had put, you know, if they had been able to liquidate their stock, they could have taken that risk to, you know, to join a company or start a company. So I think that’s where I wanna see the Midwest, and Madison specifically.
[00:53:38] Matt Howard: We gotta get a couple exits that make those early-stage employees be able to take that risk and go for it themselves. So that was like the hardest thing is knowing it could, like don’t get me wrong, they’re taking what they learned and applying it to companies, but it would’ve been easier if they had put some money in their bank account to do that.
[00:53:56] Matt Howard: And that’s where I think Silicon Valley has become what it has become is because all these early-stage employees, if you put a million dollars into someone’s pocket, they’re gonna operate differently.
[00:54:05] Laura Strong: And I do think that a big part of that is when early-stage employees make a lot of money from an exit, there’s a recirculation that occurs of that into the community, which is exactly what you just said.
[00:54:21] Matt Howard: 100%.
[00:54:21] Laura Strong: When we don’t have that, we’re reliant on people who often love what we’re doing. They’re champions, they’re advocates, but they don’t have that same level of skin in the game empathy for when you’ve done it yourself.
[00:54:40] Matt Howard: 100%. And, like, just to double down on what you said too is, like, you know, I remember back to the early-stage pitches and how some $50,000 checks, like you said, took six months.
[00:54:49] Matt Howard: You know, Ramu, when he... You know, I mentioned him earlier. I literally had one 30-minute call with him. I don’t think we got into anything super specific, and he’s like, “I’m writing a $100,000 check.” And it’s like, it’s those... And that allowed me to go faster. Now I don’t have to talk to more investors. Like, okay, I have...
[00:55:06] Matt Howard: And then he introduced me to a couple people that could also write checks. So it’s like, those are the things that, look, if you... And I know, like, why he ultimately invested, is he’s just like, “I can see your passion. I see you’re gonna run through walls to make this happen.” And, and that’s what you’re investing in early stage.
[00:55:23] Matt Howard: Like, that’s where it’s like when you’re digging into the numbers and talking about cohort analysis for a $50,000 investment, I’m just kinda like, “What are we doing here?” Like, this is, this is not, this... The company is not at the stage that’s ready to have those conversations. Um, so yeah, it’s, it’s... I think those are a lot easier.
[00:55:39] Matt Howard: Again, like, I, I know that there are some people at EatStreet that would’ve been that, “Okay, here’s 50 grand. Go.” Because they know it. They know what it is to build a company. They know how every, every second matters. So, you know, yes, I, I do think that’s where exits can really play a huge pivotal moment for us.
[00:55:55] Matt Howard: And, and really every full-time employee at EatStreet had stock in the company, and we made that, like, a core part of our mission. ’Cause I knew that some good could come out of it if we ever got it to that finish line.
[00:56:06] Laura Strong: But I wanna unpack passion a little bit, because sometimes you meet a founder and they’re super passionate, and maybe this is, like, the little spidey sense after you’ve met some folks. The passion, you can tell the passion may not actually get them from idea concept to actually executing. So is there some definition of passion that accommodates for that, that like it’s exciting, it’s great, but also you can tell like they are driven to actually execute?
[00:56:40] Matt Howard: Yeah, that’s funny ’cause as you were saying that, I was like, execution is the word that I would use next. It’s like, look, I wanna see that the, the passion is there. I want them to believe in their business model. But then back to what I said before is like, I want them to understand their numbers and I want them to be able to back up my questions.
[00:56:54] Matt Howard: I don’t expect them to have the perfect answer. I don’t necessarily have them, expect them to have the right answer because they’re still building a company and figuring things out every single day. But I want them to know their business inherently to be able to say, “Okay, this is how I think about it.”
[00:57:09] Matt Howard: And then I think also like another thing I would add when it comes to execution phase is then you have to start looking at the executive team. Like, you know, look, the founding team is obviously very, very important in the early days, but who have they started to bring on? And c- does the founder recognize where they wanna spend their time, what they’re good at, and are they surrounding themselves with people who are gonna make them successful?
[00:57:29] Matt Howard: Because founding teams only go so far. Like, you, you have to start bringing in skill sets that are outside of, you know, and, and experience levels. Like, again, like I started this company when I was... I don’t even think I was 20 yet. By the time EatStreet, you know, I left EatStreet, I had executives that had been executives at much larger companies and kind of been there and done that.
[00:57:48] Matt Howard: Like, you have to start surrounding yourself with people that are gonna make you successful. So I personally would wanna see that in a, in a found- in a CEO to be like recognized, like have the passion for the business, understand how they’re gonna get from point A to point B, at least how they think they’re going to get from point A to point B, and then are they starting to surround themselves with the right people to make it happen?
[00:58:09] Laura Strong: So yeah. So passion, an understanding of how to execute, and a willingness to bring on people that they’ll listen to who have more experience or expertise in an area or something that they don’t bring to the table.
[00:58:27] Matt Howard: I l- That’s a great summary. Yeah. And like, again, like, uh, to me, it would be a red flag if a founder’s like, “Oh, I don’t need a person.
[00:58:34] Matt Howard: You know, I don’t need this executive team. I don’t like...” It’s like we, you can’t do it all. And even if you are the best at all of the things, if you do all of it, you’re gonna do all of it okay. Like, you know, again, like back to the CEO, it’s like I want you in the room with a Fortune 500 company selling them on a multi-year package for the platform.
[00:58:53] Matt Howard: Like, that is what is most important right now. Like, go do that. Like, if you don’t surround yourselves with people that can allow you to do that work, you’re not gonna be successful. And like, so I think recognizing, and I always love when I hear founders being like, “Yeah, I was over my head here, so I hired this person, put them in, and they’ve crushed it for me.”
[00:59:12] Matt Howard: Like, you need to hire people that are better at those things than you are. And if you’re not doing that, it’s not gonna work.
[00:59:18] Laura Strong: So Matt, thank you so much. This was awesome. I will take you up on the offer to, to get a beverage, and, you know, have deeper discussions about all of the nitty-gritty details behind EatStreet.
[00:59:30] Laura Strong: But, um, thank you for giving us the start to finish and what you’re doing at SeriesUp, and also tips on entrepreneurship, founding teams. Um, really appreciate it.
[00:59:42] Matt Howard: It’s always fun to relive the journey and talk to someone who I consider a friend, so thank you for doing that.
[00:59:47] Laura Strong: Thank you, Matt.
[00:59:48] Matt Howard: Thanks.
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Show Notes
(00:00)
Introduction
(02:00)
Starting EatStreet as a UW-Madison student
(04:57)
Growing up in rural Wisconsin and choosing Madison
(08:05)
What Matt learned scaling EatStreet
(10:02)
Bootstrapping before discovering venture capital
(12:41)
Raising on the founder and the story, not just the numbers
(15:09)
What Matt looks for in early-stage founders
(17:03)
What EatStreet’s first institutional round unlocked
(20:09)
Using data to scale into new markets
(21:07)
The decision to enter last-mile delivery
(23:40)
Going against the board on a company-defining bet
(24:48)
Why teams need to change as companies grow
(28:31)
Competing when rivals raised billions
(31:18)
Knowing when it was time to leave EatStreet
(33:05)
Building SeriesUp around early-stage founders
(38:55)
Why leaving a company is not the same as failing
(43:41)
The mentors who shaped Matt’s founder journey
(47:33)
What made building EatStreet in Madison special
(49:07)
Wisconsin’s challenge with venture capital
(56:06)
Why passion has to be paired with execution
Related from Startup Wisconsin
Fixing the data problem slowing down life-saving drugs
How Creative Destruction Lab builds startups without taking equity
Show Notes
(00:00)
Introduction
(02:00)
Starting EatStreet as a UW-Madison student
(04:57)
Growing up in rural Wisconsin and choosing Madison
(08:05)
What Matt learned scaling EatStreet
(10:02)
Bootstrapping before discovering venture capital
(12:41)
Raising on the founder and the story, not just the numbers
(15:09)
What Matt looks for in early-stage founders
(17:03)
What EatStreet’s first institutional round unlocked
(20:09)
Using data to scale into new markets
(21:07)
The decision to enter last-mile delivery
(23:40)
Going against the board on a company-defining bet
(24:48)
Why teams need to change as companies grow
(28:31)
Competing when rivals raised billions
(31:18)
Knowing when it was time to leave EatStreet
(33:05)
Building SeriesUp around early-stage founders
(38:55)
Why leaving a company is not the same as failing
(43:41)
The mentors who shaped Matt’s founder journey
(47:33)
What made building EatStreet in Madison special
(49:07)
Wisconsin’s challenge with venture capital
(56:06)
Why passion has to be paired with execution
Related from Startup Wisconsin
Fixing the data problem slowing down life-saving drugs
How Creative Destruction Lab builds startups without taking equity
Listen On
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