When The Funding Vanishes

Enthusiastic public announcements aside, sometimes the check doesnt arrive as promised. So put down that champagne and heed the advice of entrepreneurs whove dealt with the disappointment of disappearing capital.

- Jody Sutton Taylor

Jimmy Odom and his co-founders at WeDeliver, a same-day delivery platform, had a lot going for them when they launched in 2013. The buzzed-about Chicago venture won the local Startup Weekend and quickly grew to provide deliveries for 100 area companies. WeDeliver also launched Locally, a stand-alone app that allowed businesses to sell products online for same-day delivery.

But in June of this year, WeDeliver announced it was being acquired by California-based Deliv, a similar but larger service that crowdsources its drivers. The outcome was in part due to a failed funding round—money the company expected that never quite materialized.

“We always wanted to build a national delivery company, but we just didn’t have the capacity,” Odom says. “Our angel investors believed in us, but angel investors cannot fund a company that should be venture-backed.If you can’t get into the VC world, it’s a chasm where you perish.”

We Deliver was on the brink of securing Series A funding last year with a Chicago VC, Odom claims, when another local fund made a sizable investment in a similar company elsewhere in the U.S. “We were looking at a $2 million round,” Odom says. “We were practically counting the money, because the meetings were going so well. We met all the partners; they loved our growth, our trajectory, our plans for the future. But when they heard about this other fund, they wanted to know why they chose to invest in another delivery company over one that was right in their own backyard.”