(Before we write this post, we want to apologise to Ben Milne’s assistant. We’re about to make your life a little more hectic with VC inquiries. Sorry!)This morning we met with Ben Milne and Jordan Lampe of Dwolla. Dwolla was founded by 28-year-old Milne; it’s an innovative online payment system that sidesteps credit cards completely.
The startup is working out of Des Moines, Iowa, and it’s moving between $30 and $50 million per month, taking only $0.25 per transaction over $10 (transactions under $10 are free).
Now we know a thing or two about investors. And when they see a startup with numbers like that, they start to drool. There’s no way Dwolla can hide from them, even in Iowa.
Milne says that the amount of investor interest they have is actually absurd, and the term sheets they’re seeing are “really ridiculous.” When we asked how much money investors have offered Dwolla for its next round Milne wouldn’t comment. When we asked if it was more than $50 million, he just smiled and repeated, “it’s ridiculous.”
Milne says his inbox has been flooded by more than 700 investors who have reached out about funding Dwolla. It’s quite a change from the first $1 million Dwolla raised — that was a long, painful 12-month process.
To help him keep track of the inquiries, Milne’s assistant started a spreadsheet that lists all 700 investors; investors Milne has heard of or who have been recommended to him are at the top.
Investors are being aggressive to get their firms at the top of his stack. Milne told us about one firm that really impressed him.
Two of the partners flew out to Iowa for a meeting. Soon after, Milne and the partners had a disagreement over the phone. “They seemed to think Dwolla should go in one direction and we wanted to go in another. So I told them the deal wouldn’t work,” says Milne.
The next day, one of the partners showed up on his doorstep in Iowa. In less than 24 hours he had booked a flight from Silicon Valley and flown out to Des Moine — again — to patch up the misunderstanding in person.
“I was blown away,” Milne said. “That was really cool.”
Dwolla will likely be raising a strategic round very soon. Despite investors waving gobs of money at him, Milne says he is looking to keep his future funding modest.
For more about Dwolla read: This 28-Year-Old’s Startup Is Moving $350 Million And Wants To Completely Kill Credit Cards >>