How bootstrapping paved the way for a $125M growth investment in Slice

Everybody likes pizza, and there are often strong opinions about it: pineapple doesn’t belong on pizza, thin crust is better than deep dish, and ranch dressing is a must-have dipping sauce. Regardless of your pizza preferences, at some point, you’ve likely ordered from a chain—such as Pizza Hut, Domino’s, and Papa John’s—but it’s important to support neighborhood pizza joints, and one startup made it their mission to help independent shop owners compete with the big guys.

Founded by Ilir Sela, Slice is a platform that “builds innovative tech to empower America’s independent pizzerias.” Since starting the company, Sela has raised over $125 million in funding and gone on to partner with restaurants in 3,000+ cities and all 50 states, forming the nation’s largest community of independent pizzerias.

Want to get a taste of how he reached this level of success? Tune into this episode of Sit Down Startup and learn why Sela bootstrapped to $40M GMV instead of raising money sooner, what he looked for in a VC partner, and why he believes it’s critical to meet customers where they are.

The benefits of bootstrapping

The first incarnation of Slice was founded in 2010 and was called MyPizza. Before launching, Sela studied the pizza industry. He found that 30 percent of Domino’s business was attributed to online ordering, and he knew that would only increase (today, it’s 80 percent).

Sela says, “When I started Slice, 1 percent of food ordering transactions were online. I knew eventually that would be 100 percent.” The founder aimed to enable independent pizzerias to go digital and decided to bootstrap the company. He credits his decision to bootstrap Slice for learning lessons that he still benefits from today.

“Bootstrapping is a very powerful experience because it teaches you how to be resourceful,” he says. “It teaches founders how to be scrappy. It forces you to focus. You don’t have the luxury of doing 30 different things. You can only do one thing, and it has to be done very well.”

The background in bootstrapping also equipped the Slice team with the skills and savvy to navigate the recent shifts in the corporate landscape.

Sela says, “I’m very fortunate to have gone through that bootstrap phase because in the last two years, where companies have needed to become more efficient, for Slice it was a natural transition. We are a profitable company today. That’s because it’s ingrained in the DNA of our people and our business model. I don’t know if we would be as successful at that transition if we didn’t have those bootstrap years under our belt.”

A growing network leads to growth capital

Bootstrapping Slice meant that Sela never had to look for capital. “I actually didn’t know what VCs were,” Sela admits. That changed in 2015—Slice was about to generate $40 million in sales, but Sela realized he wanted the company to scale at a quicker clip. So, he reached out to Wiley Cerilli, a serial entrepreneur and founder of successful companies like Seamless and SinglePlatform.

“I thought he could be someone who could connect me to people who could join the company to help us scale faster,” Sela says. “I actually didn’t need money. We were profitable. What I needed was a network of individuals who knew how to help scale this business from point A to what my future vision was.”

Cerilli helped Sela by introducing him to investors who not only gave him business advice but also helped him raise the first round of capital for Slice. Two more rounds of capital followed. Benjamin Sun from Primary Venture Partners joined the second round, and Jeff Richards from GGV Capital joined the third round. Although Sela was able to get notable investors on board, his priorities didn’t change.

“I can say that I was not deliberately trying to get growth capital, what I was trying to get was growth people,” Sela explains. “Growth capital became a byproduct of that.”

Meeting customers where they are

The first product that Slice built was a website that allowed independent pizzerias to receive online food orders. The Slice team visited the pizzerias and presented the staff with a dashboard or tablet to receive orders. However, a challenge arose when the shop owners didn’t recognize the need for this technology. They wanted to stick with what was familiar. To meet customers where they were, Slice developed a method to convert orders into a fax format via an API.

Sela explains, “You would place an order on the Joe’s Pizza website, and that order would print on the fax machine at Joe’s Pizza because they were used to getting orders as faxes. They didn’t have to change anything about their experience and the customer had this new channel.” The tactic worked and helped build customers’ trust in Slice.

Ultimately, Slice successfully transitioned customers from fax machines to dashboards by respecting the work processes of their partnered pizzerias. “The conversation is a lot easier once you show them what is possible,” Sela says. “But upfront, asking them to change their workflow so you can have the right to deliver them value is a very steep ask for a very small business.”