With an unwavering entrepreneurial spirit, Daren Cotter’s journey began in a college dorm room and culminated in the sale of his company, InboxDollars. But the journey didn’t end there. Today, Cotter is a seasoned angel investor and mentor, using his experience to support and grow the next generation of tech businesses.
Tell us a bit about your background, Daren.
I’m a Founder and entrepreneur – and this goes all the way back to grade school. But I started my first scalable Tech company while in college at Minnesota State University, Mankato in 2000. You could call it a dorm room hobby company for about five years while I figured out how to scale the business model, which was eventually successful. I then spent the next 15 years of my career building an incredible team and scaling that company, which was InboxDollars, a consumer rewards business. We got the company to a nice revenue scale, and then I sold the business in 2019 to Prodege.
It was your very first startup and it was a success!
Yes, it was an overnight success…. 20 years in the making! I stayed with Prodege through COVID-19, an interesting time, and exited fully in early 2021.
What was next for you after the sale of InboxDollars?
Well along the way in my journey as a Founder, I got interested in angel investing. While I was still running InboxDollars I started investing in Founders I knew through my personal network. From 2013 through 2019 it was a personal hobby of mine and I built a portfolio of a couple of dozen companies. During this time, I learned a great deal about angel investing including what I was doing wrong. Fast forward to 2021, when I left my full-time role at Prodege and had an influx of liquidity and time, I decided it was logical to take that part-time hobby and scale it into a full-blown second career. And that’s what I’m doing today, full-time. I invest in both early-stage Tech companies directly and also early-stage VC funds. It’s my career 2.0 if you will. I invest across the U.S., but many of my investments are in the Midwest (and MN) where my network is strongest and I see the most deal flow.
What got you interested in angel investing?
Startups and Founders are my tribe. The people I hang out with are other Founders, and a common thing that Founders and early-stage startups are talking about or actively doing is raising capital. Then, at InboxDollars, we discovered that a common customer segment for us was startups who needed to get access to consumers at a mass scale to improve their metrics and raise capital more efficiently. We looked at a strategy that might include taking equity in those startups but ultimately decided not to do that. But this spurred the inspiration to start investing on a personal level.
How did you find out about and become involved with MESA?
It was John Tedesco who introduced me to MESA in early 2017. That’s when I joined as a mentor so I’ve been involved for some time. Today, I’m mentoring Jazz Hampton with TurnSignl. TurnSignl’s product is an app that delivers on-demand, real-time legal guidance from an attorney to drivers while their camera records the interaction.
What drew you to give back and join MESA as a mentor?
It’s simple – I love startups. And, like I said earlier, Founders and entrepreneurs are my tribe. They’re the type of people that I enjoy hanging out with. I do that now professionally as an investor for financial gain, but MESA allows me to give my time to my people and my tribe, and support and help them with their startup journey.
Are there any highlights from your experiences as a MESA mentor?
I was fortunate to mentor Sezzle along with Troy Thibodeau. Sezzle is an awesome MN startup story! The Founders, Charlie Youakim and Paul Paradis raised a couple of million dollars in pre-seed funding. Their original idea didn’t work and as they were pondering what to do next, they saw an Australian company doing a buy now, pay later business model which wasn’t popular yet in the U.S. They sensed an opportunity and right at that time, coincidentally, they began their MESA mentoring relationship with Troy and me. The new business model of buy now, pay later worked extremely well and today Sezzle is publicly traded on NASDAQ with a billion-dollar market cap. Seeing that process play out was exciting, and it was great to see the company succeed. There’s a personal and human component to that relationship, and after they graduated from the MESA mentoring program, Charlie and Paul continue to be friends of mine. Seeing big successes is what motivates me to mentor other Founders. Obviously, not every startup becomes a billion-dollar company, but it’s that potential that gets me excited.
What keeps you involved as a mentor?
I love being a part of something that will help a burgeoning business achieve scale and have an impact on the Founders, employees, other stakeholders, and the community as well. When you have those kinds of successes, that capital finds its way back into the community to help the next slate of entrepreneurs.
MESA is a great place to give back to the Minnesota technology community. For entrepreneurs who have relevant startup and management experience and are looking for an avenue to help emerging software startups – MESA is the top choice. I would encourage others to look into becoming part of the organization.
