Trott: Because we...
Trott: Because we read that LLCs can’t take investments. So we figured, if we
formed an LLC, we couldn’t have stockholders. But then, you can always
change from an LLC to a C corp. It’s a funny kind of stupid thing that we did,
like, “Let’s form a company that can’t take investors,” not realizing that you can
just change the structure of your company. We were looking at the California
incorporation book, and we said, “We have to figure out if we’re going to be a
partnership, a sole proprietary, a C corp., or an LLC.” And we were looking at
the checklist and we saw “can’t take money,” so we said, “Let’s do that one.” It’s
amazing. For anyone who is starting a company, it’s so hard.
Ben and I were 24, and where are you supposed to learn this stuff? We got
the Nolo book on incorporating and we looked online, but it’s so hard.
We owe a lot to Barak. He became a board member (for Neoteny) after the
investment, and he was the best board member because not only did he help us
figure out the business strategy, but he also helped us figure out how to get an
office, how to get insurance, how to wire our office and do the business stuff.
That’s one of the reasons we made him CEO—because he was so willing to do
everything that we needed and he wasn’t an investor who would just give us
money and check on us every quarter.
He did allow us to make mistakes, however. For example, he let us not ramp
up as fast as we could because we had to learn for ourselves that that was not
the best idea. Another example was when we went to look at offices. Barak
went, because Ben was at home working. We’d look at offices that had like 10 or
Mena Trott 409
20 offices, and I said, “If we need an office that big in a year from now, then I
don’t know what we’re doing, because we don’t need that many people.” He
said, “OK. You can make that decision.” So we got like a 1,500-square-foot
office that we outgrew in 8 months. People asked why we got such a small
office, and it was because I thought everything else was too big. I realized that
on my own. It was really important; he did it in a good way.
Livingston: This is surprising, based on the stories I’ve heard about investors.
Trott: The Neoteny investment was such an anomaly. We were this incredibly
early-stage company that had no structure, no employees, no really good
accounting, nothing but the LLC. But we had a huge customer base, which I
don’t think most startups have. We had hundreds of thousands of people using
our products, and it had been operated with so few resources. So we had to
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