My Startup Story #9: Too Good to Be True?

Alexander Finden
4 min readApr 10, 2020


The answer is yes, it was too good to be true. In fact, it was pretty terrible. It was as if Rob and I were insects wandering the forest floor in search of friends, but instead of friends, we found the den of a trapdoor spider.

It all started at one of many San Diego networking events. It was fall in 2018. As Mammalz co-founder Rob Whitehair and I were showing off our newly polished user interface for Mammalz, a few new faces entered the room.

When you attend enough networking events, you become very good at sneaking peeks of new attendees’ badges. Who are they with? How high value are they as a target? Like ninjas in sync, we both noticed the term “equity” on one of the newcomers’ badges. We turned to each other and whispered, “Investor.” At this point in time, Rob and I were both extremely driven and hungry to fuel Mammalz with our first investment. If only we could convince an angel (a very early stage, usually solo investor type) to sign a check, Mammalz could be more than just a design on our phones. Our dream could become a reality. But, we couldn’t look desperate. It’s always best to approach investors with a “we don’t need you, we have this under control” attitude, so we waited patiently for the right time to strike.

After chatting with a few other entrepreneurs and finishing a couple more whiskeys, we intentionally drifted around the room from conversation to conversation, landing right next to the lion’s den. We eased into a pleasant conversation and learned everything about him before pitching ourselves. Our pitch was an instant success. We got a meeting that weekend for lunch.

Once we left that first lunch and had investment terms in front of us, Rob and I were on cloud nine. We did it. All we needed to do was make sure these terms were flawless, containing no loopholes or sketchy requests. The equity request was fair, the cash amount proposed was exactly what we needed, and the only contingency was that we use one of his development teams to complete the minimum viable product (MVP) for Mammalz. We needed a full development team anyway, so this felt perfect.

To ask a few questions before we signed, we requested a follow-up meeting. We asked things like, “Can we jump on a phone call with the CTO of your development team? How long do you imagine the MVP development will take? What other companies are in your portfolio whom we might have synergy with?” We were happy with every answer. At the end of the meeting, now that we were almost relaxed into sealing the deal, we asked one more question, “Will we get all of the cash up-front or will it be distributed as we need it?” The investor’s face scrunched from a smile to a confused frown. “There’s no cash,” he said.

Rob and I didn’t quite know how to take his response. Our hearts dropped into our stomachs and the red flags waved high. How could we have both learned from the first two meetings and from the term sheets sent to us that cash was part of the deal when it wasn’t? “The investment is in the form of my development team. Their expenses are paid, and in return, I take equity in Mammalz,” explained the investor. We had a lot to think about.

After a long night of pondering our own awareness, we decided we were still interested in the deal if it could get us what we needed for a smaller amount of equity. We returned for another meeting with the investor and proposed our new terms. He was willing to meet us in the middle, which was fantastic. Though it wasn’t the cash deal we wanted, maybe we could make this work. At a minimum, we would have a working version of Mammalz.

“Awesome, we’ll make those changes and send you the new terms,” said Rob to the investor. We hurried home, made a few edits, and forwarded the investment agreement. Shortly after, we received a phone call. It was him. “How much cash can you put down to begin my team’s development?” he said. I hesitated a moment, then boldly stated, “You are covering their cost of labor. That is where the value of your investment comes in, correct?” He let out a confused laugh. “I’m providing the team, you provide the cash to pay the team, but I’m offering a discount. It’s a very good deal, they are great developers.”

I could feel Rob go cold through the phone.

After that second wave of bamboozlement, I honestly do not remember what we said. I do know that we met with him in person one more time before agreeing to not meet again. Since that last meeting, we haven’t heard from him once.

This whole fiasco took nearly a month of our time; time we could have used to pursue other investment leads had we not been so confident in this deal. It truly was too good to be true and I’m glad we didn’t go along with it in desperation. Taking a crappy deal to get your company off the ground is never worth it. Just because an opportunity presents itself and everything else feels hopeless does not mean that you need to take it. You always have the option to decline and go back to exploring the unknown. It’s terrifying, but we learned that it all works out in the end if you stay strong, stay committed to your vision, and dodge the **** out of the way of those trapdoor spiders.



Alexander Finden

Co-founder of Mammalz, underwater cinematographer and Divemaster