Breaking News: Scrapper Gobbles Up $41.000001 Million InvestmentPosted on by Jon Kelly (Jon)
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Today we bring you exclusive news that Scrapper has taken a whopping $41,000,001 in funding. Pre-launch. We have an exclusive interview below with Scrapper's founder and CEO explaining Scrapper and the investment.
ToT: What is Scrapper?
Scrapper: AirBnB for table scraps.
Scrapper: Every year 62.3 million metric tons of food are wasted by American families at dinner time. That food gets sent to landfills or put in garbage disposals where it often gets in our waterways. We match up undiscerning young people with families to eat what's left of their dinner.
ToT: So, you're bringing young people in to eat with familes? That's kind of cool.
Scrapper: No, they don't eat with the families. They eat what's left on their plates.
ToT: OK, that's odd. Why? Who are you disrupting?
ToT: Why wouldn't families just get a dog?
Scrapper: Some are allergic. Some dogs smell bad.
ToT: Why did you take $41 Million to build this?
Scrapper: Actually, we took $41,000,001, but who's counting? We wanted to raise one dollar more than Color.
ToT: Speaking of Color, I noticed that you didn't use your new cash to buy the domain name Scrapper.com. Why not?
Scrapper: What's a domain?
ToT: You're a web founder and you don't know what a domain name is?
Scrapper: I'm the CEO. I try to stay "high level" and not get buried too deep in the weeds. I have a technical co-founder for that geeky sort of stuff.
ToT: Who would give you that kind of money?
Scrapper: Can't divulge, these are A-list investors but they don't want a bunch of me-too players crowding this space.
ToT: At what value did they invest?
Scrapper: $1 pre-money, 12x multiple participating preferred. Still not 100% sure what that means, but it sounded great to us! Funny story, the investors actually had the same lawyer who negotiated with Eduardo Saverin at FaceBook. I thought that was so cool. I wanted to have equal firepower, so I got the actor who played the lawyer who negotiated with Eduardo Saverin at FaceBook to sit next to me in a nice suit. I asked their lawyer if we were getting a good deal. He said he would give me an autograph if we just signed the papers and let him get to lunch. Seemed fair!
ToT: Why would they give you that kind of money?
Scrapper: We have co-founders with experience from Google, Paypal, Facebook, Twitter, Digg, LinkedIn, Reddit, Quora, and CafeMom.
ToT: You have one co-founder and you're both 25, how is that even possible?
Scrapper: Neither of us has ever worked in a job more than 5 weeks. If you stay longer, it shows you have no ambition.
ToT: I found your financial model fascinating. Pretty amazing that you could forecast revenue and EBITDA out to 2 decimal places in 2016 given that you haven't even launched.
Scrapper: Thanks. I'm a Wharton MBA, that's how we roll.
ToT: Where are your based?
Scrapper: San Francisco.
ToT: How has that worked out for you?
Scrapper: It's been a little rough. The protesters have been very difficult to deal with.
Scrapper: Yes, we hired a kid as a marketing intern to create fake accounts and vote us up on social media sites, that sort of thing. He's 18 and we were paying him $11/hour, which we thought was pretty good money for a kid. He was sitting in a coffee shop and someone overheard him tell a friend about his pay. Next thing we knew some Living Wage people were outside with picket signs, chanting.
ToT: Yikes, what did you do?
Scrapper: We raised the intern's salary to $16/hour. We thought, "what the heck, we have $40,000,001 in funding, what does it matter?" Unfortunately, we had new protesters outside the next day. They said our "absurdly high" salaries were making the city "unaffordable" and that we should pay everyone exactly $12.65 per hour. We ended up caving - now our whole team gets paid exactly $12.65 per hour and we're all proud members of the Service Employees International Union. We Are One!
ToT: How did you come up with the idea for Scrapper?
Scrapper: It was born of personal experience. I was actually homeless for a while. I grew up in Marin and always had a difficult time with my dad. Nothing I did was ever good enough for him and he let me know how little he appreciated me. We had our run-ins, but the final straw came on my 16th birthday. I found out that he was getting me a Porsche. I was so excited, I told everyone, and couldn't wait for the big day. And then my birthday came and I saw my "wonderful" present. It was a Boxster. Great, thanks Dad. Way to imply that I'm the ugly bastard step-child of an otherwise exciting high-performance family. I immediately drove down to the City to live with the other abused kids in the Haight. I not only found a community of like-minded kids from Marin, I found the inspiration for the next great web business.
ToT: Wow, that's...something. I don't know what else to say but good luck with Scrapper.
Scrapper has generously agreed to give 100 lucky ToT readers priority access to the Scrapper alpha. Just enter the code APRIL1ST at Scrapper.biz.