- Startup Archive
- Posts
- Baiju Bhatt on raising Robinhood’s seed round and being rejected over 70 investors
Baiju Bhatt on raising Robinhood’s seed round and being rejected over 70 investors
Baiju Bhatt and Vlad Tenev were five years into their entrepreneurial journey when they came up with the idea for Robinhood.
As Baiju puts it:
“We had been entrepreneurs for the better part of five years and didn’t have a whole lot to show for it.”
And when they tried raising seed funding for it, they were rejected by somewhere between 70 and 110 investors.
These investors told the founders all the reasons Robinhood would fail — “no one wants to trade stocks from their phones,” “you didn’t know how to build consumer products,” “there’s a ton of other brokerage products out there people can use.”
Baiju reflects on this experience:
“There were a lot of no’s and it was very difficult back then. But over time I learned to channel it and use it as positive motivation.”
Then Baiju and Vlad finally caught a break when prominent venture capitalist Tim Draper decided to take a chance on them. Initially however, Draper said no because he didn’t think they’d be able to secure a broker-dealer license and the founders were paying themselves ~$70k salaries:
“Great idea, but it’s never going to happen, and you guys are paying yourselves too much,” he said.
The founders left the meeting confused — they could barely make rent and pay back their student loans with what they were paying themselves. But then they got an idea:
“We’ll tell him that we’re not going to pay ourselves until we get this approval.”
Draper said yes, and the Robinhood founders got to work on building a company that is today worth almost $50 billion.