Below is an article I wrote for the Arizona Commerce Authority and it appeared on the ACA’s blog. You can read the article below or click here to visit the original post.
Post.Bid.Ship., Inc., launched in Tucson, Arizona by two 2010 MBA graduates from The University of Arizona, has spent the last 20 months building its online platform designed to help commercial shippers across North America buy empty trailer space on tractor trailers. Think of Post.Bid.Ship. as the Priceline.com of the commercial freight industry. Just as Priceline.com sells empty hotel rooms and airline seats, Post.Bid.Ship. helps the more than 1 million trucking firms operating across North America sell empty trailer space.
“We originally built our service for direct shippers and truckers, but after a few months of testing, freight brokers who are involved in 20-percent of all freight transactions were involved in more than 80-percent of our transactions,” said Micky Thompson, CEO for Post.Bid.Ship. Freight brokers are the fastest-growing customer segment for Post.Bid.Ship., yet the company had not designed a product to fully meet their needs. Thompson continued, “After witnessing brokers’ fast adoption rate, we knew we needed to build a product designed specifically for them, and we needed to do it quickly.”
The company set out in late fall to raise capital from investors to help bring Post.Bid.Ship. Enterprise to market. Post.Bid.Ship. Enterprise expands the company’s product offering beyond its existing product line.
“We needed $500,000 to do it,” said Micky Thompson, CEO for Post.Bid.Ship. “We had identified several potential investors, but because of the financial cliff facing the U.S. and the recent financial instability across the world, investors would not commit.”
Seeing first-hand the problems facing the private equity market, Post.Bid.Ship.’s management team set out to find alternative sources of capital. The goal was to find innovative ways to offset the need for investor capital, which could then motivate investors to participate. It was then that Jarret Hamstreet, COO for Post.Bid.Ship., re-applied for the Arizona Commerce Authority’s Fall 2012 Innovation Challenge. Hamstreet had applied for the same grant in the spring of 2012, “Despite not winning the Challenge in the spring, judges offered valuable feedback. We took that feedback, applied it, and as a result, we came back with a much stronger application in the fall. We also came back with the promise that we would leverage the grant to raise private equity from investors,” Hamstreet said.
Post.Bid.Ship., with its improved application, new product line under development, and a working prototype, proved successful. The company was selected a winner of the 2012 Fall Innovation Challenge and is using the grant money to hire additional staff members at its Arizona-based headquarters to help bring Post.Bid.Ship.’s new product, Post.Bid.Ship. Enterprise, to the market. It’s also using the money to leverage additional funding.
Thompson stated, “When we started writing our grant application, we had no investor commitments. However, we knew if we were selected, our investors would match the grant to help us reach our goal of $500,000.”
Investors exceeded their expectations. “By the time we were announced a top 25 finalist, we had several investors who felt becoming a finalist was enough credibility to invest,” stated Hamstreet. “When Post.Bid.Ship. was officially announced one of the six firms selected by the ACA for a grant, several investors called that day asking if they could invest.” Post.Bid.Ship. closed on an additional $286,000 in investor capital from around the country, matching the ACA grant by more than 123%.
When asked to offer advice to other entrepreneurs looking to apply for a future ACA grant, Thompson said, “Not winning the first time enabled us to take a hard look at our strategy, refine our product, and win the grant the next round. Applying is a win-win. If you’re not named a winner, take the advice the ACA offers and apply it to improve your company. If you are one of the firms selected, use the ACA’s endorsement as one the most promising technology ventures to leverage additional customers, vendors and investors. This is what we did at Post.Bid.Ship., and we feel this will help us grow in one of the country’s most innovative states.”
To learn more about Post.Bid.Ship., visit www.postbidship.com or call (800) 530-2846.