Meet Crissi Cole from Penny Finance
Q: Could you briefly introduce yourself and your startup?
A: I’m Crissi Cole, the founder and CEO of Penny Finance, an online financial planning platform specifically designed for women. We are an early-stage FinTech startup based in Boston.
Q: What inspired you to start your company?
A: My path to entrepreneurship was quite unexpected. It traces back to when I was 14, observing my hardworking single mom and widowed grandmother. My grandmother worked tirelessly until she was 75. This experience made me wonder why women seemed to work harder and face more financial struggles. I didn’t want to follow that path, so I pursued finance in college and landed a job at Goldman Sachs, spending a decade investing in tech.
Despite my background and knowledge, I found myself burdened with student loans and credit card debt, even while working in one of the most prominent firms in finance. This personal struggle highlighted a broader issue: women, regardless of their access to financial resources, often find themselves in deeper debt and with less wealth. This realization sparked the idea for Penny. I envisioned a platform that could help everyday women grow their wealth. Three years ago, amid the COVID pandemic, I took the leap, quit my job, and started Penny with a small team of engineers. That’s how our journey began.
Why Techstars?
Q: What led you to join the Techstars accelerator program?
A: Joining Techstars was a pivotal decision made a few years into Penny’s journey. At that time, I struggled with fundraising as a sole founder in the fintech and consumer space, which was particularly challenging. Techstars had launched an impact program in partnership with Melinda Gates, focusing on women’s equality and advancement. This aligned perfectly with our mission and where we were on our journey. We needed not just funding but also strategic partnerships and credibility in a space that values impact and women’s empowerment.
Getting into Techstars was a significant moment for us. Out of 2,000 applicants, we were one of the 10 startups selected. This happened around Thanksgiving, at a time when we had only three thousand dollars left in our bank account. We were on the verge of shutting down. Techstars was like a lifeline or a pause in our story, signaling that our journey wasn’t over. They believed in our vision and potential, and having a partner who shared these beliefs was a game-changer. It was a moment of renewed hope and determination for us.
The Application Process
Q: Could you describe the application process for Techstars?
A: The application process for Techstars was quite comprehensive and involved multiple steps. Initially, it was an online application where you had to choose three programs of interest. For me, the top choice was the longevity program with Pivotal Ventures, followed by Boston and a corporate partner program. The application itself was extensive. It required a detailed explanation of our business plan, a video of our product, and a clear articulation of our mission and vision. It felt akin to preparing a 10-point investment memo.
After the online submission, the next phase involved in-person interviews, which were virtual in our case. I underwent three or four interviews with different programs, focusing on our story, the reason behind founding the company, our current status, revenue numbers, and team dynamics.
The final step was the most challenging: presenting to an investment committee. This committee included representatives from Techstars, Pivotal Ventures, and various venture capitalists. We had a five-minute window to pitch Penny, with a brief Q&A session following the pitch. This was our opportunity to convince the committee that we were one of the ten companies worthy of being selected for the program. A few weeks later, around Thanksgiving, I received the call that Penny and I had been accepted into the program. This was a critical milestone for us.
A Day in the Life of the Accelerator Program
Q: Can you describe what a typical day was like during the Techstars program?
A: The Techstars accelerator is an intense, exhilarating experience. It’s a blend of exhausting chaos and immense motivation. You’re not just running your business; you’re also committing to a full-time, 12-week accelerator program. My days varied, especially since this was a Washington DC-based program. I traveled to DC three times during the 12 weeks for in-person sessions, while the rest of the program was virtual.
Typically, three to four days a week, from 9 AM to 4 PM, were dedicated to Techstars programming. Each week had a specific goal, whether it was meeting mentors, focusing on our fundraising library, or refining our value proposition. Techstars, being the largest pre-seed investor globally, has a well-structured curriculum that guides startups through essential steps for growth, while you continue running your business.
The program involved numerous calls, content reviews, and a lot of homework. Initially, it felt like we were taking a step back, spending so much time on content and strategy — identifying our target market, understanding customer motivations, etc. However, towards the end, the focus shifted to relentless execution. This phase was about testing our offerings in the real world, gathering metrics, and being accountable for our business model and objectives.
Over the 12 weeks, I probably met a thousand people, which was an incredible networking opportunity. The program culminates in a demo day where you pitch your business to a group of investors and partners. The experience, though thoroughly exhausting, was highly impactful and an invaluable part of our journey.
Q: Could you share details about the funding you received during Techstars?
A: Yes, during my time in the Techstars program, we managed to raise a million dollars in our pre-seed round. This was a significant achievement for us. I had already begun the process of raising funds before joining Techstars. The program played a crucial role in helping us close this round. Having Techstars on our cap table was immensely beneficial, as their reputation as the largest pre-seed investor in the world adds a level of credibility. This credibility is highly regarded by institutional and angel investors. We officially closed our pre-seed round at the start of the program, around January 31st.
Achieving Milestones and Overcoming Challenges in Techstars
Q: What would you consider the most significant milestone during the program?
A: The most significant milestone for us during Techstars was the growth of our community. When we started the program, Penny had 6,000 women using our platform. By the time we graduated, this number had increased to 10,000, and as of now, we have 21,000 users. This growth in our user base was a huge win for us. Of course, closing our pre-seed funding round was also a major achievement. The primary challenges we face are running out of money or the founder giving up. For us, securing funding and expanding our community were crucial steps in our journey.
Q: Could you elaborate on the challenges you faced?
A: Running a startup involves juggling multiple critical tasks simultaneously, often with limited capital. One of our main challenges was competing with well-established, billion-dollar companies. In retrospect, I wish I had joined an accelerator program sooner. When we did join Techstars, Penny was already quite advanced, and it would have been beneficial to make some key business decisions within the accelerator framework a year earlier.
Another personal challenge was balancing my role as a founder with family responsibilities. I had a young baby at the time, and managing both these aspects was incredibly tough. I advise having a strong support network of family and babysitters to help navigate through such challenging times.
Penny Finance’s Growth and Future Prospects
Q: Can you provide an update on the current status and future plans for Penny Finance?
A: Currently, Penny has 16 employees, and we are considering raising our seed round next year. Our platform has been making a significant impact, with our users growing their wealth by 9x, reducing their debt-free timeline by four years, and saving an additional $500 per month. We’re not planning to expand our team further at the moment. Our focus is on how to grow and develop future product features to become a comprehensive financial planning platform for women aged 18 to 75.
Founder’s Advice
Q: Do you have any advice for other startup founders?
A: Definitely. First, build an advisory board with expertise in areas you lack. My background is in investing, finance, and tech, so my board consists of former entrepreneurs, marketers, and chief revenue officers. An experienced advisory board can provide invaluable insights, especially in the early days.
Second, be prudent with your spending. Cash is like oxygen for startups. Be mindful of your investments and strategic in your choices. Raising funds doesn’t mean you can afford to be extravagant. Managing your resources wisely is key to sustaining your startup in the long run.