- Chandan Lodha and Jon Lerner are the founders behind CoinTracker, which allows people to calculate what tax they have to pay on their cryptocurrency gains.
- The two are former Googlers, and cofounded the company after going through prestigious startup programme Y Combinator.
- They secured funding from Alexis Ohanian’s investment firm Initialized Capital just minutes after meeting the Reddit cofounder.
- CoinTracker got $1.6 million of seed funding from Ohanian and his wife, the tennis superstar Serena Williams, despite not having a pitch deck prepared.
- Click here for more BI Prime stories.
Pitching your company to investors is a nerve-wracking process.
And it feels worse if one of your prospective investors is the Reddit cofounder Alexis Ohanian, and he’s staring at his phone during the meeting.
For Chandan Lodha, a Harvard-educated former Googler, it certainly felt like the pitch for his crypto tax startup CoinTracker was going off the rails, as Ohanian’s eyes glinted in the light of his phone screen.
The startup was founded by Lodha and fellow ex-Googler Jon Lerner in 2017 after the pair went through prestigious startup factory Y Combinator. CoinTracker helps people pay the right tax on any gains they made on cryptocurrencies and track their portfolios.
In February 2018, Lodha met with Initialized Capital, the fund founded by Ohanian and former Y Combinator partner Garry Tan, to secure seed funding. It was just days after Ohanian had returned from paternity leave after the birth of his child with tennis superstar Serena Williams.
“I walked into this meeting totally unprepared, I had done no pitches for our product and had no pitch deck or presentation to show,” Lodha told Business Insider in an interview.
The Y Combinator graduate realised that crypto investors were struggling with the IRS and regulators to properly account for crypto assets, and thought he had found a niche in the market.
Taxes, like life’s other great certainty — death, are inevitable and a serious issue for crypto users. Earlier this year the IRS sent around 10,000 letters out reminding taxpayers they could be liable to fines of $250,000 and five years in prison if they don’t pay the tax on any gains they made on cryptocurrencies.
“I met with Garry Tan and within minutes of explaining what we were doing his eyes lit up and he yelled down the hall ‘Alexis, get in here, you need to hear this!’ He was sold straight away,” Lodha said.
But when Ohanian started listening to Lodha, he didn’t appear to be paying attention.
“It had been 10 minutes but he didn’t seem to be paying attention so my hopes dimmed,” Lodha said. “Later it transpired that he had been tweeting about our meeting live from the room and traffic to our website had been spiking.”
If you’re like me, you’re going to be super grateful for this cryptocurrency tax manager feature in CoinTracker https://t.co/GjdOCjMxm3 pic.twitter.com/idMxWjlcsn
— Alexis Ohanian Sr. 🚀 (@alexisohanian) February 16, 2018
Initialized subsequently led a $1.6 million seed round into CoinTracker. That also included funding from Ohanian’s wife, tennis star Serena Williams, through Serena Ventures, and backing from $2.6 billion fintech Plaid’s cofounders Zach Perret and William Hockey. Other investors included Y Combinator, Gmail creator Paul Buchheit, Kindred Ventures, Google product manager Baris Gultekin, Blockstack’s cofounder Ryan Shea, and entrepreneur Juan Benet.
Ohanian handed over his Twitter account and password so the founders could post about their company
CoinTracker wanted to generate buzz for its new tax product soon after that meeting through Product Hunt, a site where users vote for the emerging tech products and services that they are most interested in. Lodha had some followers on the site, which was started by Y Combinator, but Ohanian had more.
However, there was a problem. You only get 24 hours to push your product on the site, so the best time to post and get as many votes as possible is 00.01 at night to get the full 24-hour window.
Having recently become a father it seemed unfair to make Ohanian stay up to post late at night. But the Reddit cofounder provided a solution. “Fifteen minutes after the meeting, Alexis said: ‘Don’t worry, I’ll send you my Twitter login details and you can sign in and post the product from my account,'” Lodha recalled. It was the perfect start for the company who became the third-highest ranked product in the world for their 24 hour period and soon had hundreds of paying customers.
18 months later, Lodha claims CoinTracker is profitable and says users have filed taxes on more than $1 billion worth of crypto assets using its service. The startup expanded into tax systems in the UK and Australia, supporting more than 300 crypto exchanges and more than 2,500 cryptocurrencies.
“It’s been great to have such a well-known name committed to us and Initialized have been awesome with us and check in every 6 weeks. Alexis often has very good suggestions and is as hands on as we want him to be,” Lodha added.
Got a fun story or a pitch deck to share? Contact the reporter of this story, Callum Burroughs, at email@example.com.
SEE ALSO: Check out the pitch deck a 19-year-old founder used to raise $3.2 million in seed funding from legendary investors Sequoia Capital
Join the conversation about this story »
NOW WATCH: Watch the Samsung Galaxy Note 10 event in 6 minutes