#117 Lotus: Hardware Hail Mary

Beck: Pitch 3, day 1 [clap]

Hardware. It’s notoriously…well…. Hard. It’s expensive to get started, you’ve got to build all these prototypes… it takes longer than you think to get to market… and when it’s time to scale, well, that’s hard too.

A lot of investors flat out won’t invest in hardware. Which is why we’ve been hesitant to bring those companies on the show.

But then…I met Dhaval. A founder who wants to turn every home into a smart home…without using any smart tech. Making it so easy even great grandpa can do it. It’s the moonshot hardware company I’ve been looking for.

Hey Alexa, will Dhaval get money on this pitch?

Alexa: Sorry Josh. You will have to listen to find out.

AGH ALEXA YOU’RE WORTHLESS. I’m Josh Muccio, and this is The Pitch, where real entrepreneurs pitch real investors, for real money.

Paige: Hi I’m Paige Finn Doherty, founding partner Behind Genius Ventures and welcome to San Diego.

Neal: Hey, I’m Neal Bloom, managing partner at Interlock Capital

Elizabeth: Hi, I’m Elizabeth Yin, general partner at Hustle Fund

Mark: I’m Mark Phillips, founder of 11 Tribes Ventures

Charles: Hi I’m Charles Hudson, managing partner, Precursor Ventures

The pitch for Lotus is coming up AFTER THIS. And if you want to watch the video of this pitch, go to pitch.show/youtube. New episodes premiere on YouTube, Wednesdays at 7pm eastern.

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The information provided on this show is not intended to be investment advice and should not be relied upon as such. The investors on today’s episode are providing their opinions based on their own assessment of the business presented. Those opinions should not be considered professional investment advice. 

Mark: Alright

Dhaval: Hey. Dhaval.

Neal: Hey. Neal.

Elizabeth: Hey Dhaval. Elizabeth. Nice to meet you.

Mark: Hey Dhaval, I'm Mark.

Dhaval: Nice to meet you, Mark.

Mark: Nice to meet you too.

Charles: Hey. Charles. Nice to meet you, Dhaval. [walking]

Dhaval: So, the story starts with me. I was born with twisted knees, and over the years, I've been on and off crutches. Now one night, a few years ago, I got into bed having left the hallway lights on. But I was too tired to get out of bed, hop on to my crutches, hobble ten feet, turn off the light, hobble back ten feet, and get back into bed. So, I slept with the lights on. The entire night. And woke up in the morning thinking, if someone like me, an engineer, having managed a division at Apple, with 37 patents, if I don't even have smart home tech, who does? 91% of US homes were built before smart homes. Even getting an Alexa means rewriting every wall switch to connect to the internet, and pairing every switch one by one through another app. And this disproportionately affects the 27 million people with limited mobility. Soldiers, older adults, disabled persons. So at Lotus, we've built this. 

Charles: That’s cool

Mark: Nice.

Dhaval: A patented wearable ring that controls objects at home by pointing. No apps, no rewiring, no internet. Infrared eliminates the need for apps, smartphones, even internet. Today, we can control anything a wall switch controls. Lights, fans, appliances. This is a $335 billion market that's been over 80% untapped, even after a decade. And with Lotus, you can go from home to smart home in seconds. And that combination is really resonating with people. We've got 14 pilots in just 30 days. We're here to raise 2 million to go from prototype to product in production, to build a future where there will be a universe of ring-controllable objects, where any person, younger or older, disabled or not-disabled, can stay at home with autonomy and dignity. This is Lotus.

Elizabeth: Very cool. So how do you install the sensors for -

Dhaval: If I may?

Elizabeth: Yeah. Please. 

Dhaval: And so these are the rings. This is an existing wall switch. 

Elizabeth: uh huh

Dhaval: You can attach a switch cover like this, magnetically.

Elizabeth: Yep. 

Dhaval: Step one, you put on the ring. There's a little button up here. And so all you do is that.

Paige: That's super cool.

Dhaval: Step two, snap on. Step three, point and click. I’ll pass this on.

Mark: I feel like Iron Man. 

Elizabeth: Clever.

Charles: Do you have to charge the ring?

Dhaval: Yeah. So the nice thing about this technology is as opposed to internet of things, you have to be connected to the network all the time, which is why it draws power all the time. With infrared, it's like your TV remote. It's only drawing power for the 50 milliseconds that you push the button. 

Mark: Huh

Dhaval: And so instead of charging it every day like an Apple watch, or every three days like an Oura Ring, you only need to charge once every 90 days. 

Mark: So one ring - talk to me

Dhaval: To rule them all.

Mark: Yeah. Exactly. So the ring will be connected to all of the devices like this, which could be connected to the television or to the light switch or to - I mean, you name it. The fan. 

Dhaval: Correct.

Mark: And so a house would have this all throughout any room that they want and it's simply a point and click and it's gonna adjust -

Dhaval: Correct. So in our pack, we're planning on giving one ring and four switches.

Mark: Okay.

Dhaval: For the same price that you get an Amazon Echo Show today. 

Mark: In your user interviews, what's the perspective on wearing the ring constantly versus making it something that's kind of like a television remote?

Dhaval: To level with you, I originally thought this was a stupid idea. The bar at Apple is does your device deserve to exist? So we interviewed people for nine months. These are detailed interviews. Nine hours long over three days. And we didn't tell them about the idea until the very last hour. And so the first eight hours, we would ask them - what types of devices do you use today? There were three pieces of feedback we got. One, we don't tend to wear watches, and we certainly don't wear it at night. Either because we have to charge it or we take it out, out of habit. Or, and this is true, it gets caught in my significant other's hair. It was a real comment. And so people don't wear it at night, which is a problem because you're in this catch-22 at night. So in a typical situation, either you have to turn off the light switch and then in the dark you're walking to your bed. Or vice versa, where if you get up in the middle of the night to go to the bathroom, you're looking for the light switch in the dark. And for older adults, one third of all falls happen in that situation. So if all the ring did was only do lights and nothing else, we would still eliminate one-third of falls in 33% of older adults. Which is why our - one of our B2B segments is actually senior living because if anyone falls in the facility, they get fined by the state, they get sued by the family, and they dinged on their star rating by CMS, by Medicare and Medicaid, so their reimbursement rates drop. So it's a big problem for them. 

Mark: So on the B2B side, you're targeting retirement homes, and the value prop to them is, hey, we'll install this ring in all of your rooms, thereby reducing your risk of falling and failure by some dramatic percentage.

Dhaval: Correct. Yeah. 

Elizabeth: - I remember when I was a kid watching TV, there was this ad for clap on, clap off.

Charles: Clapper. Yeah.

Elizabeth: But I never knew anybody who had it.

Dhaval: Yep.

Elizabeth: What do you think is wrong that product? 

Dhaval: Too many false positives is the shortest answer. Which is, any noise would set it off.

Paige: Oh.

Dhaval: Any noise.

Mark: I actually bought one once. 

Elizabeth: Oh you -

Mark: Yeah. Not gonna lie to you. I totally bought one. It didn't - it just didn't work well. And then you would try to - you would clap and it wouldn't hear it. It's not good.

Elizabeth: Oh, so it just like, doesn't work well.

Mark: It just did not function well.

Dhaval: It doesn't work well. The other problem is it's only for plug-in appliances. The biggest problem with the age tech category's products, is the end user doesn't want them. Nobody wants to use diapers. Nobody wants to wear a life alert. They do it out of need, but nobody wants to. The benefit here is, and we've been told this directly from our end users, they just like it. It gives them more agency, more autonomy, more independence, which is really dignity is all they wanted. 

Mark: What can be learned from a company like Oura, right, that has tried this form factor, they've done all right, I think maybe it has tapered off a little bit.

Dhaval: Yeah.

Mark: No one here is wearing an Oura Ring. What are your lessons learned from a company like that?

Dhaval: Two or three. Do you have an Oura?

Neal: No. Just a Fitbit.

Dhaval: Okay. Couple of lessons. One, I think the hardest problem that Oura's had is that it's a little bit of a vitamin and not a painkiller per se. Because it's preventive health, The second, their price point is really high. And part of the reason for that is going direct to consumer is very, very difficult. There were about 30 other companies that tried doing something similar. Oura is the only survivor. Because all of them tried to go direct to consumer. And so that's why B2B2C is great. It's a one-stop shop that ends up with a lot of consumers.

Neal: You - coming from Apple, like the big question in a lot of these other spaces is but why couldn't Apple just do this from the watch, right? Why aren't they getting into this space?

Dhaval: Yeah. There's sort of three moats, if you will. Lowest hanging fruit, I'll say table stakes, is just patents. The second is the first mover advantage. You actually want to move into this space early, because those people do not - even when new products come out - they don't change. And the third is the secret sauce, where it's not trivial to figure out the infrared beam intensity that is strong enough to get long range, but not so strong that you get false reflections in the same room. It's not an impossible task, but it's not trivial. 

Elizabeth: Yeah. Especially in a room where maybe you have multiple switches.

Dhaval: Oh yeah. Which is every room, practically.

Elizabeth: I mean, that would be an interesting test in this room - 

Dhaval: Yeah, so I mean, the way to - one way to test it is to basically point in other directions, and if there were reflections it would actually turn the, turn it on.

Elizabeth: Yeah. Right. Right. Yeah. And can you talk a little bit about your 14 pilots? 

Dhaval: Yeah

Elizabeth: What is the nature of them? Are they paying you? Who are they?

Dhaval: So the bulk of them are paid. The largest one is Veterans Affairs. The second is the State of New York. They actually want 10,000 units but we have ten. And so we're really early stage. They're planning on paying for somewhere between 50 and 100 pilot devices, and then they wanna put a pre-order for a hundred - 10,000 units. And then the remaining ones are a combination of disability organizations all throughout the country and senior living organizations all throughout the country. Those are the 14. 

Elizabeth: But it sounds like they are not yet signed. Or where are you in that process?

Dhaval: So we have one signed customer. Actually, they've even given us a 50% deposit. 

Elizabeth: mhm

Dhaval: And so we have some booked revenue, but primarily we're pre-product, pre-revenue. 

Elizabeth: I see. How much was that for? 

Dhaval: This particular customer that I'm talking about, it was 20 units, $300 a pack, so 6 grand. And so they paid us 50% up front, so 3 grand. 

Elizabeth: Mhm. 

Neal: Elizabeth, I feel like we're trying to understand, where are they really right now. Like in terms of pilots. I feel like the answer is zero current pilots.

Dhaval: Yeah. So we haven't started any pilots yet. Like I said, we have 10 units. 

Neal: Okay. So zero deployed, zero pilots. But I feel like at times you were talking about like it already is happening.

Dhaval: No. So yeah, I should say, they've given us verbal commitments for these. But the clear answer is no pilots have begun. In fact, we don't want them to start for another two months until we have done testing, finished testing all of these ten devices.

Elizabeth: A sort of - a piece of feedback for you. When you came in and you said you had 14 pilots, I think the nuance, I would say is we have 14 verbal commitments on pilots.

Dhaval: Oh got it. Got it. Thank you.

Neal: Or just 14 in our pipeline.

Dhaval: Got it. Okay. Thank you.

Elizabeth: Because I think verbal commitments are something. But it's not signed

Paige: Yeah but definitely very different.

Elizabeth: They haven't sent you the money, and you're not working with them.

Dhaval: Yeah, yeah. Got it. Thank you. I appreciate that feedback. My apologies. 

Neal: All good 

Paige: We've invested in three different connected hardware companies. I think like one of the challenges that we've seen across them is like manufacturing and supply chain. I'd be curious to understand more about how you're thinking from - about going from 10 to 10,000 to like 100,000 devices.

Dhaval: Yeah. Actually, that's the part that concerns me least. That's actually all I did at Apple. And so we have consistent supply chains both here, locally, so the plan is if we're building less than 1000, we'll do here locally.

Paige: Okay.

Dhaval: Then we plan to do either a Mexico or Philippines, and then for 10,000 units or more we do China. And so that's actually - our supply chain right now, timing is about a month and a half.

Paige: So it's a month and a half to build a full unit from start to finish? 

Dhaval: No, no. To go from complete design on paper to end units in hand. 

Paige: That's pretty fast.

Dhaval: Yeah, it's relatively - 

Paige: Yeah

Dhaval: - small. 

Charles: What's the cost profile? 

Dhaval: So one unit and four switches, we think we're gonna retail for 270.

harles: Okay. 

Dhaval: At that price point, if we only built a thousand units, our gross margin is 64%. And if we build 10,000 units, which is actually what the State of New York wants, it's 75%. And the higher you go, the more economics of scale you get. Essentially, because we're using old technology in a new way, and we joke about this all the time, it's pretty inexpensive, small and power efficient. 

Mark: Can you unpack for a moment the nature of the round. So $2 million you're raising, valuation and then what are the milestones you wanna accomplish?

Dhaval: Yeah. Basically, we want to go from prototype to product in market, so we can - the biggest thing that's holding me back right now, all these customers usually assume that it's ready and available and they wanna buy in bulk, which I can't do. And so the 2 million split breaks down into 1.2 for salaries for 24 months, .5 for the actual builds, meaning the hardware cycles, and then a little bit buffer just time, in case something else happens. 

Paige: Do you have any of that committed already? Are you opening your round now?

Dhaval: Yeah, so - yeah. The total we've raised to date is 425. In this specific round, in just the past couple of weeks, we raised 225k.

Paige: Okay.

Dhaval: That money was an offer that we got. That came in at a 14 million post money valuation cap Having said that, I am flexible on terms.

Mark: That's great. So Dhaval I'm really impressed with your control of this business. I really like it. It's gonna be too early for us. We want to see a little bit more progress on the product. I really want to stay in touch. So it's a no for us today. I think when you do go to market, this could catch on like wildfire, and when there's another round, that might be interesting for us. But for today, it's gonna be a pass. 

Dhaval: Thank you. 

So that’s one pass, no surprise there. Hardware is… Say it with me:

Alexa: Hard

When we come back. Dhaval tries to ring the rest of ‘em. Clap clap

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Welcome back to the moonshot pitch. Here’s Paige with a zinger. Or in this case, a ringer.

Paige: What keeps you up at night as a founder?

Dhaval: Yeah. It's part of the reason I'm here. It's actually all the skills you have that I don't have. And I mean that in a very real way. I actually keep waking up in the middle of the night for that reason. I know the engineering really well. And so, yeah, sure everything's not perfectly figured out, but these are all solvable problems and I've done that for over a decade. The engineering doesn't keep me up. It's where I would say I don't have expertise, so I'm not sort of gifted in sales, like you Charles. Or with marketing, like you Paige. And the hardware and software given your own background, Elizabeth. But those are the skills that I don't have, and I would love to not just get capital, but intellectual capital so I know how to deploy the capital well, most efficiently. And so that's the stuff that keeps me up at night. That and the actual capital where - you know, we've been working together for close to a year. Not doing right by my team does keep me up at night. At some point, if any one of them gets sick, no one's getting paid right now. And so I wanna make sure they can keep their lights on. 

Neal: Can you talk more about what you did at Apple and your other cofounding team.

Dhaval: Yeah. Yeah I worked on everything from the trackpads on the laptops, to 3D touch on the phones, to then finally managing an organization for wireless charging for iPhone, watch, air pods, and some special projects. So my specialty I would say is sensing, haptics, and power. 

Neal: And do you have cofounders?

Dhaval: No. So it's just me right now. But the founding team, the first engineer, ex-Amazon, ex-Blackberry, he's a PD engineer, mechanical engineer. Our head of disability, she's deaf blind herself. So sales, this person used to actually do biz dev for the New Yorker magazine. For marketing, we actually have a person, Natalie, she's actually a copywriter by trade, and so she's been helping with the marketing. We doubled our team size since we got into Tech Stars. So now we're seven full time people, 12 total. 

Charles: Is there any way to get to meaningful revenue on the 2 million without a big lumpy contract like NYC?

Dhaval: A lot of senior living. So then it would be a trench strategy. Which is basically, you go to each one of the organizations. Like right now, we're working with - one of the partners is United Church homes. It's the second largest senior living organization in the country. And so you pilot with one, then they actually want it everywhere in their own facilities. In fact, for United Church Homes, specifically they want me to come down, live there in person, and actually run the pilot with them in person. Which is great. 

Neal: I'm impressed by you technically. I'm seeing a complete lack of the other side of kind of the founding team who knows how to sell to government, sell to Medicare. These are big complex things that I think it would behoove you to have. not just a hire who's done sales like at a magazine, but someone big level who's done this before. but I haven't seen that you've even tried to attract that talent yet from any level. So for now, I'm out, without more experience relevant to the space.

Dhaval: Got it. Thank you. 

Elizabeth: So I really think this is super clever. I love your hustle and strategy, also, in who to go after. I think you're spot on about thinking about no D2C, and even within your B2B contracts, which ones are interesting and which ones are not. I think the valuation is a bit pricey. Cause I think the 14 is too frothy for this business model and where you are. It's also not software, which is out of our thesis, but you - you know, VCs often make exceptions. I'd be willing to go in at 50k but I think we're looking at 6 mil post on a safe. 

Dhaval: Got it. 

Charles: Just to piggyback on what Elizabeth said, we do a lot of hardware and I don't know why, it always seems to take $7 million to get to a commercial product. We have a next gen walker company. It seems - I don't know why. It seems to take $7 million and it always seems - and sometimes it's technology complexity, and sometimes it's actually the go to market piece just takes longer, and figuring out who's gonna pay and how much. So I always assume that there's gonna be, at a minimum, two seed rounds for a hardware company to actually get to a place where there's meaningful traction. And like Elizabeth, the 14 million number doesn't work for me, with the expectation that there will be another seed round and there has to be some room between the today price and the future price. So I'm out on the current terms. But I would be open to revisiting it at some point in the future if the terms are lower and I have a better sense of the pipeline.

Dhaval: Just out of curiosity, if we took away that hurdle and we went with Elizabeth's, would you be open?

Charles: The thing I'd want to have a bit more clarity on just - in a world where New York City doesn't come through, how much legwork is required to go through these other channels. And I don't know that I - I don't think I have enough clarity on that today.

Dhaval: Got it. Thank you.

Charles: Mhm 

Paige: I agree with both what Elizabeth and Charles have said. I've had experience investing in hardware companies and I feel like they're often some of my favorite companies to invest in. Um, I think some of the things that are interesting in this is, it's a painkiller. It's not a vitamin. And I think that what I've seen work well is painkiller hardware. I'd be interested in putting in 150 at a 6 mil post, with Elizabeth. 

Dhaval: Got it. Thank you. Um If I can um respectfully counter, when we came into Tech Stars, we came in at six. Would it be okay if I asked for 8? The big changes that happened in the past 3 months, we basically doubled our team size, we built our first prototypes, and we got at least verbal commitments.

Elizabeth: Yeah. I think your initial pricing was a little frothy, so I understand, you know, you've obviously progressed a lot over the last few months or so, but I would be out at 8. Yeah. 

Dhaval: Got it.

Paige: I think it would, for me, make sense at 8 if you had 14 pilots. But I don't think it makes sense for me at 8 with the verbal commitments.

Dhaval: Got it.

Paige: So for that reason I'm out. 

Dhaval: Well, for me it was - the valuation cap was never as important, it was always more important to help the people and do it faster with the right intellectual. So I'm happy to accept at the 6. 

Elizabeth: Yeah. Cool. Excited to do this.

Paige: All right. Let's do it. 

Dhaval: Can I shake your hand?

Paige: Yeah. Yeah. Cool.

Dhaval: Thank you. Thank you.

Paige: Cool. Awesome.

Dhaval: Thank you so much.

[thank yous]

Neal: We've all got hardware to give back to you.

Charles: There's only 10 of them!

[thank yous] 

Neal: Congrats.

Mark: Yeah. First deal.

Neal: You guys are in the ring business now.

Paige: Let's go.

Neal: That's great. 

Paige: I was - were you surprised that he took it at 6?

Elizabeth: No.

Neal: No. Not 30 days after Tech Stars. I feel like you're still on that round. Should take all the money he can right now, as a hardware company.

Elizabeth: Yeah. 

Josh: Did we just get you to make an off-thesis investment?

Elizabeth: Yes.

Neal: Nice.

[woo]

Josh: Do you feel good about that. Does that make you feel nervous?

Elizabeth: No, it doesn't make me feel nervous. I think there are real gems in these areas where people categorically pass.

Charles: Yeah.

Elizabeth: Like, this category, no one will love for a whole variety of reasons. There's the hardware, it's very early from a -

Josh: It's old technology.

Elizabeth: It's old technology! There's no Wi-Fi. Not even Bluetooth. And the thing that's going for him is his background, so he knows how to ship a product. They've done a lot of form factor user testing, and then they seem to have had some hustle and conversations and, like, you know, having people try this. That's where it is. 

Paige: Yeah. Yeah, I think so too. Well I feel like I think about investing like specifically in founders on like three different axes. So the first is like are they a good storyteller? He was a really great storyteller. He came in, had a super crisp pitch. The second is like a strong mission. And then the third is execution velocity, which is like how thoughtfully can they set direction and then how quickly can they execute on it. I think he had those 14 pilot conversations in the last 30 days, which was really impressive. 

Josh: Something I don't know if I heard him say in the pitch, He said like when you design for people with disabilities, you end up designing things are super easy for anyone to use. 

Elizabeth: Yeah.

Josh: That's his whole mission. He's like, we're gonna design for these people first, but we think it's gonna be something that everyone will want to use just because it's so simple. 

Neal: Yeah.

Josh: Well, that was awesome. I mean, that was one I was like, oh man, this is risky, it's hardware. But I felt like there was something there.

Mark: He was super impressive.

Paige: Yeah, he was.

Mark: He did great. 

Josh: That's a wrap.

Mark: Are we on a break or are we back at it.

Against all odds, Dhaval raised $200k on The Pitch Show. But did these commitments actually turn into cold hard cash for some cold hard… ware? A month later, we called up Dhaval to find out.

Josh: Dhaval, how are you? 

Dhaval: I'm good. How are you guys? 

Josh: As long as you're good, we're good. Actually before we get into what happened after your pitch, I’m curious, like, what’s it been like for you fundraising for a hardware company? 

Dhaval: It's been difficult. I mean, it's my first time fundraising. And as a first time founder, there's a lot of doubt, a lot of questions. You sort of go in mentally prepared knowing that you're going to see a lot of rejection. But it's one thing to know about it and one thing to experience it. You know, it's like reading about the cold versus being in the cold. It bites a lot more when you're experiencing it.

Despite the bitter cold, Dhaval did get commitments from both Elizabeth AND Paige on our show. A few weeks after that, he got on calls with both of them, and there was STILL one thing they needed to clear up.

Paige: I just wanted to have clarity in terms of where you’re at with like, pilots 

Dhaval: We have five signed LOIs. And five verbal commitments, and then another 12 in the pipeline. We're three months away from the first pilot and nine months from launch

Elizabeth: I, I think I just want to clarify, you know, I think I’m having trouble wrapping my head around what's paid and what's not. 

Dhaval: So, the biggest paid ones are Veterans Affairs is paid. New York State is paid, but they haven't finished signing yet. They're looking for somewhere in the order of a 15,000 pilot, but they want a discount. 

Elizabth: So you're a Delaware C Corp, right?

Dhaval: Yes.

Elizabeth: Yeah, so I mean, I'm ready to sign the paperwork and wire. we can get the wire out this week, even. 

Dhaval: Got it. Thank you. 

Paige: Please email me with the documents. I'll get those reviewed and signed ASAP. And then the wiring instructions as well, so we can get that ball rolling. 

Dhaval: Okay. Perfect. Will do. 

Dhaval: That was that. It was really quick. I was pleasantly surprised. 

Josh: Wow. Just like that. Wired the funds.

Dhaval: Yeah, yeah. It was fantastic. I wish all investors were like the ones on the pitch. Really, truly. 

Josh: So I have to say, Dhaval, going into this recording event, your pitch was one of the ones I was most like excited about, but also felt like it was a Hail Mary because it’s hardware and it's just hard to raise money for hardware companies. But now in retrospect, your deal has gone through faster than any other deal at the recording event. Like this thing went off more smooth than any other pitch at this season. So congratulations? 

Dhaval: Wow. Thank you. Thank you. I have to say, I don't even disagree with you. I flew down. Assuming that nothing would happen. I mean, it's hardware. The chances are really slim. But, despite all that, as of right now, as of this moment, we are oversubscribed. 

Josh: Whoa. 

Dhaval: The reason I'm sharing this is, a month ago I had trouble sleeping. Because I wasn't even sure the round would close. Now we're well oversubscribed and so it's a very weird odd feeling. 

Josh: Why do you think that is? Why is the fundraise going so well?

Dhaval: The only theory I have, and this is more in line with what other founders have told me, is fundraising is a non linear function. It is sort of like a hockey puck graph. Where initially for the first weeks or months, it doesn't feel like much is happening or things are happening, but very, very slowly, But funnily enough, when you get towards the end, everyone wants to jump in all at the same time. And that's exactly what happened for the past one week, I've been getting a commitment every day, one check a day. And the check sizes have been increasing in size, not decreasing 

Josh: Did you change anything about your approach during the process? 

Dhaval: Yes. I spoke to another founder, and he told me what he does. Anytime anything good happens, send out an email blast. Can be two lines. But send it out to all the investors that are on the fence. 

Josh: I think I started getting these from you. 

Dhaval: Yeah, yeah. I was sort of hesitating, pinging investors on a regular basis. You know, you get tons of email as it is. But he said, nope, just suck it up. And, you know, it can be short. It can be one line. But just send it. 

Josh: Oh, what you sent via email seemed like it was like a text message. You were just like, yo, I closed another investor. You know, two more investors in 48 hours. Then I got another one on Monday that was like... 72 hours later, we've got another one. 

Dhaval: Yeah. Yeah yeah yeah. 

Josh: I was wondering what was going on, but it did give me the feeling. I was like, well, shoot, is The Pitch Fund going to be able to invest in this? Or did it like, did it move that fast and leave us behind? 

Dhaval: That's exactly right. I think a lot more people felt that way. Cause I started getting inbound requests, including from an investor that had been on the fence for months. 

Josh: I have a question for you. Can, is there room for us to, could you actually hold 150K for the pitch fund? 

Dhaval: Oof.

Josh: so you know you've already got 50k out of the fund 

Dhaval: Yeah

Josh: But what we like to do for pitches like this is we like to open it up to listeners Who want to invest as they listen to the show. So What do you think?

Dhaval: Um, I never thought I would be in the position where we'd be oversubscribed. Um, Unlikely is the honest answer. Given what the situation right now is 

Josh: Yeah, I understand. I understand. This is great. What a great problem to have for you. We’re so happy for you. You for sure got, you know, 50k out of the fund and we can wire those funds here in the next week. 

Dhaval: Thank you. 

Josh: So when's the date when you get to start paying your employees?

Dhaval: The idea is I’m still going to pay them for the month of July, that was the original target. So we’re gonna backpay them for the last 3 weeks or so. So yeah, the first check I think is gonna go out maybe August 1st. We’re, we don’t have payroll set up so that’s the thing we’re doing right now 

Josh: [laughs] This is getting real Dhaval 

Dhaval: it’s getting very real 

Josh: I mean, I know you’ve been working on it for a very long time and it’s probably felt real before. But like, when you get to actually pay your employees for the first time, that’s going to feel awesome I think

Dhaval: Oh it already feels great. I mean, I’ve been sleeping a lot better for the last week

Listeners, I *tried* to get you allocation on this one, I really did. I’m sorry, I learned that we have to negotiate these things up front. I’ll do that next time!

The Pitch Fund got in though! It’s our first hardware deal! We caught the hardware hail mary. Now I’m doing my endzone dance. You can’t see my endzone dance. But know that it’s very cool.

If you want to hear more of Dhaval’s backstory, subscribe to The Pitch Insider. New stories come out on Fridays and feature a deep dive on that week’s founder. Subscribe at pitch.show/insider

Next week … The Pitch is in its true crime era

Jillian: You could be the murderer and putting in misinformation. I would, if I was the murderer. 

Martin: Misdirection 

Jim: Are you interested in true crime? Is this a thing that -

Jillian: It's very weird and it's a longer story. But no, I'm not a murderer.

That’s next week in The Pitch Room. And if you want to watch the show, check out our Youtube channel @ the pitch show. See you next Wednesday!

Applications are open for next season of the Pitch! We’re gonna be in Miami this time. There will be 18 startups and a ton of really great investors. So if you or someone you know is raising pre seed or seed, go apply at pitch.show/apply. If you’ve applied before, go ahead and apply again. See you in Miami in January.

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This episode was made by me, Josh Muccio, Lisa Muccio, Kerrianne Thomas, Anna Ladd, and Enoch Kim with casting help from Peter Liu

Music in today’s show is from Imagined Nostalgia, Onders, Kevin J Smith, Breakmaster Cylinder, and The Muse Maker

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The Pitch, Inc. and their respective employees and affiliates do not provide investment advice or make investment recommendations. The information provided on this show should not be used as the basis for making investment decisions. Listeners should conduct their own research and consult with their own investment advisors before making any investment decisions.