In August 2012, Williams left P&G to work full-time on Lisnr and the first version of the product launched in March 2013.
Lisnr raised $850,000 in seed funding in the summer of 2013 according to public fundraising database Crunchbase, but it barely carried the company to its next round of funding. At the end of 2013, facing a cash shortfall, Williams started paying the salaries of his 12-member team with savings he had collected from his time working at P&G. At the time, he says, he was paying north of $30,000 a month in payroll.
“As a start-up, as a technology company, as an entrepreneur … there comes a point in time where the success that you know is coming is delayed. And sometimes that delay is a monetary delay. And at the end of 2013, getting into 2014, we had a monetary delay,” Williams tells CNBC Make It. “I knew that we had revenue coming in; I knew that we were going to hit milestones, that were going to make this company extremely attractive to series A investors. But I knew there was a three- to four-month gap.”
So Williams stepped up.
“I kind of stayed home that Christmas . And I emptied the bank account. And I emptied the credit cards. And I just think it's one of those tales that all entrepreneurs and founders have, where you're going to go out and believe in this project or company so wholeheartedly that you should risk it all,” he says.
Both Williams and Glick did not take a salary during that time (Ostoich was not yet full time) and Williams' co-founders paid for other business expenses. "It was a team effort," Williams says.
As for whether paying the salaries put him in debt? “Definitely. Definitely I was in debt. I was in debt. I had depleted my savings, I depleted my — I didn't pay myself: I was behind on my bills, I maxed out every credit card that I could,” says Williams. He was “close to 100,000" dollars in debt, he says.
“And yeah, you know, you took a risk," he says. "It could have ended up really, really bad, right?”
But Williams had a reason to be hopeful. “I do also remember in those three to four months we actually closed over a half a million dollars worth of contracts, so I knew we were going to get funded. The business was still growing," says Williams. It's typical that a big client pays 90 days after a product is delivered, says Williams. “I think all founders, all entrepreneurs go through that. ... That’s just a part of believing in something that no one else does.”