After entrepreneur Ben Mackinnon moved in with his girlfriend and started buying furniture, he realized they could have been racking up rewards on their credit cards. But because they didn’t plan ahead, they didn’t take advantage of any benefits.
“We found out about this after we moved in and missed out on hundreds of dollars of rewards just by shopping,” Mackinnon says. “Once I saw that, I was like, ‘Okay, that’s crazy to go through a shopping portal, find rewards, and take some sort of manual action on it. That’s an antiquated process.’ I figured if someone could do it, so why not me?”
After doing research into credit card rewards, Mackinnon realized that no one had figured out a way to streamline the information to consumers about which credit cards to use for what purchases to maximize rewards.
Mackinnon discovered that he wasn’t the only one missing out on untapped rewards. He surveyed friends and family members and learned that most of them were in the same boat.
That’s when Mackinnon decided to launch Kard, a platform to help you maximize credit card rewards.
After creating a prototype that tells you which of your credit cards will give you the maximum rewards when you’re shopping online, Mackinnon got his first angel investor. And it was serious money: $600,000.
These are Mackinnon’s takeaways from a successful first round of funding.
1. Convince yourself before you convince others. “During the pre-seed stage when you don’t have a whole bunch of traction or paying customers, your ability to convince investors to have faith in you is important,” says Mackinnon. “They’re investing as much in you as they are into the business. I put in most of my savings into the business in order to build a functional prototype. That was helpful to be able to not only talk about my vision, but also show investors how much I’m willing to invest and what the product could look like.”
2. Know the funders inside and out. “I knew I wasn’t at a stage where I could go to big VC firms and say, ‘I want you to put your faith in me,’” says Mackinnon. “They require much more proof and traction. Know other companies they’ve invested in, what stage they like to invest at, and how much money you need. Some companies don’t know why they need investment money when they’re asked why they need it. I learned to be prepared to know my [stuff] by the time I talked to investors.”
3. Keep your eyes on one prize at a time. “Really focus on getting that one investor to lead the round. That was the hardest part for us,” says Mackinnon. “Once you get that one person invested, it makes the rest of the process easier. We didn’t go for institutional funds because I didn’t think we were there yet. I focused on angel investors based in New York City, and I did get rejected. You’re going to get a lot of people saying ‘no’ before you hear a ‘yes.’ I was lucky to have a lot of good connections in the tech community through my advisors.”
The WeWork Soho West member says he plans to release the beta version of his product in about a month. He hopes to partner with national credit card issuers in time for the holiday season.
Through WeWork Labs, an incubator program within WeWork, Mackinnon was able to find hundreds of people around the country who provided helpful advice. Many of those people are on the program’s Slack channel.
“If I had questions about hiring engineering talent or user acquisition strategy, people would reach out,” Mackinnon says. “Because it’s a tight-knit community, if we ever have any questions, we’re likely to find that answer within other WeWork members.”