How 2 startup founders with no product, no users and no real proof their company would work raised $3 million – then built a company worth $1.3 billion

Robinhood is a commission-free stock trading app that was recently valued at $1.3 billion. But when the company was first starting, there was very little proof the founders could pull it off.

Vlad Tenev, cofounder and co-CEO of Robinhood, says his app could not get regulatory approval without having a sizeable amount of funding from venture capitalists. But most venture capitalists didn’t want to give him money, because he had no product.

” So there are capital requirements, which also make it more difficult than launching a typical startup, because there’s a little bit of a catch-22 situation,” Tenev explained in an interview for Business Insider’s podcast, Success! How I Did It.“Investors want to be sure that you’re going to get that regulatory approval before entrusting you with the capital, but you need that capital to get the regulatory approval.”

To round up the cash, Tenev and his cofounder did a lot pitching. He estimates 75 venture capitalists turned them down before they were able to raise their first $3 million.

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