Sarah Haggard thought she had done everything right to tee up Tribute, her early-stage company, for venture capital success.
She built relationships with other founders who provided her personal introductions to the VC firms that had written them checks. She spent time recruiting a chief technologist. She signed on big name customers for her business, which facilitates corporate mentoring relationships, including Microsoft and Zillow. She had hundreds of thousands of dollars of revenue.
The $3 million seed round was seemingly a done deal for her Seattle-based startup.
Then she got the call in May from the lead investor. They were backing out.
She was speechless, unable to comprehend the news. Haggard thought of her employees, her customers, her big plans. “There are all these things that are in motion,” she told Startup, “that in one fell swoop went away.”
In a post she shared on LinkedIn this week, Haggard described the blow of losing the funding, and then losing her CTO and head of customer success. In the wake of the failure she retreated from social media and startup events. She was devastated.
“It was too painful to watch everyone else thriving, while I was drowning in grief,” she wrote in the post.
But that wasn’t the end of the story.
One of the funders for the canceled VC round, Atlanta-based Engage, decided to go ahead and write its check for $250,000. Engage accepted Tribute for its 10-week go-to-market accelerator. Nine of its limited partners, including executives at Delta Air Lines, Goldman Saks and Chick-fil-A, were interested in her product.
There were still opportunities and she knew she would need to fundraise again. Haggard needed to pull it together.
She had already started reworking her original business model from 2019. Haggard, who previously spent a decade in enterprise sales at Microsoft, realized that facilitating mentorships wasn’t a viable business by itself.
The new version of Tribute is a knowledge-sharing platform built to support the pandemic-driven hybrid work environment. It’s a place for employees to make professional connections, share resources for career development and bolster their social well-being.
Her survival instinct kicked in, Haggard said, and she began moving forward. She found that hitting bottom with much fewer resources forced her to do more with less and fully embrace the new direction for her startup. Now Tribute’s business is in the “strongest position we’ve ever been in as a company,” she said, “after having it all fall apart.”
Tribute’s customer list has grown to include Amperity, Calendly, Remitly, Sonos and others.
One of the biggest lessons from the experience, Haggard said, is that many founders and startups go through crushing setbacks before rebounding.
Her husband, Jordan Ritter, founded six companies and just announced his latest, AI-powered venture. He recounted similar stories to her, and Haggard began sharing her own, 1-on-1, with others in the startup community.
Haggard started appreciating that she wasn’t alone and took the gamble of publicly recounting the journey of her near disaster. She has been gratified by the overwhelmingly positive response.
“It’s a common experience, but we don’t talk about it,” Haggard said. “I needed to let go of the shame.”
She encourages other founders to keep at it, know that setbacks are part of the process and acknowledge that fundraising is a grind that largely follows an established playbook. VCs often favor founders with known connections, previous successes, and who go from an initial idea to a business with significant funding in a couple of years, she said. Haggard has already veered off that course, but isn’t giving up.
“Things are looking up. That’s the beauty of this story,” she said. “We’re in such a better place and more excited for the work to come.”