Starting a Business Requires a Team Effort:
The Story of MyProSeller.com
by Adele Sommers
Recently, I interviewed my colleague Mike Ernst, co-founder and VP of Engineering at MyProSeller.com, an eBay®-related service company. I sought to learn how this unique, technology-based enterprise was able to get off the ground, overcome a host of startup challenges, and establish an enviable level of momentum.
MyProSeller.com acts as an intermediary for people who don't want the hassle of setting up and running their own eBay auctions.
 It identifies and researches the items that people wish to sell, prepares those items for sale (including taking digital photos and creating professional listings), and handles all inquiries, payments, shipping labels, customer service, and returns, all without up front fees.
I was curious how the company evolved since its inception a little over two years ago. I therefore asked Mike several things about the progress he and his partners have made so far.
How Did MyProSeller.com Launch?
Mike explained that he has over 16 years of experience with four previous startup companies, and readily admitted that he was ready to pursue yet another entrepreneurial launch when the urge struck again. He and his partners started MyProSeller.com on a shoestring budget, but with a big-picture vision of the operation it could become.
To get the business going, they needed to find a stellar team and persuade that team to help indefinitely for little or no direct compensation. They arranged for an "equity swap," where the contributors exchange their time for profit-sharing. Mike disclosed that by using an LLC (a limited liability corporation) rather than another type of corporate entity structure, the partners were able to offer contributors profit-sharing as a type of equity, and also avoid certain tax consequences that can occur with other forms of equity.
 The partners tapped colleagues they had known for years, such as people with whom they had worked on previous projects, and others referred by close associates. The core team's passion and vision for the company ultimately excited and attracted a host of people who wanted a creative outlet and a way to be in on the ground floor of something new and unique.
About 30 people so far have contributed expertise on a part-time basis in areas such as law, accounting, finance, sales/marketing, operations, and engineering. Most of the contributors have day jobs and work for MyProSeller.com during evenings and weekends, thereby reducing the risk for all concerned. Today, the company employs 22 people in both specialized and hourly capacities.
How Did the Business Seek Funding?
Mike revealed that he and his partners considered seeking either venture capital (VC) or angel investor funding, but leaned quickly toward the latter. Angel funding typically comes from networks of accredited investors who meet the Securities and Exchange Commission's definition of "wealthy" in terms of net worth and income. Mike explained that angel investors are usually easier to find then VC funding, which has become much harder to tap in recent years and is typically available only to larger enterprises.
 To seek their first round of angel funding, the partners painstakingly crafted a formal business plan. In retrospect, Mike feels strongly they wouldn't ever take that route again. After family and friends gave the plan glowing reviews, the partners saw it ripped to shreds by astute attorneys and funding experts. They went back to the drawing board to drastically revise the business model and prepare new presentations.
Many versions later, Mike has the following advice:
- Skip the business plan. Instead, first create a high-level slide presentation and obtain sophisticated feedback as early as possible from financial and other advisors. Make changes to the business model as needed before proceeding any further.
- When the model passes muster locally, create an executive summary to go with the slide presentation and show the package to prospective investors. Get as much feedback as possible from a variety of interested investors. Keep the presentation in a fluid mode, since it will need to change dynamically over time.
How Does MyProSeller.com Differ from Other eBay Services?
Mike acknowledged that there are various other intermediary services that help people sell items on eBay, so the partners soon abandoned the idea of operating as a "drop-off counter" or creating a franchise around the business. They also do not handle any merchandise directly.
Instead, Mike and his partners have found three very lucrative niches in the giant eBay marketplace. They are:
- Helping existing businesses set up and manage eBay store fronts. "Many businesses want to sell on eBay but are reluctant because of the requirement for eBay technical expertise as well as the costs associated with starting and running an eBay store," Mike said. "MyProSeller solves all of these problems by removing the need for eBay expertise, eliminating initial set-up costs, and reducing the cost of running the store by as much as 83%." He added that businesses that are already selling on eBay benefit from the much lower operational costs and the ability to scale their operations.
 Helping charitable organizations receive proceeds from eBay auctions as donations. These organizations can offer MyProSeller.com's services to their constituents who wish to make donations via selling personal items on eBay.
- Helping charities, such as Goodwill, sell high-value items for a decent return. Mike explained that many times, valuable items sell for only a few dollars (if at all) in the stores, but could fetch very good prices in online auctions. This is a booming area that the partners expect to see grow dramatically in the future.
In conclusion, MyProSeller.com launched and continues to expand due to a solid team effort. From exciting and attracting a talented core of experts, to seeking feedback and polishing the business model and related presentations, to running the day-to-day operations, every aspect depends on engaging the team to pull off both the magic and the grunt work of helping the business grow.
For more information on any of the services mentioned above, please contact sales@myproseller.com.
Disclaimer: Be sure to verify all of your assumptions regarding entity selection, funding, and tax consequences with your own attorney and financial advisors.
Copyright 2006 Adele Sommers
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To ensure that my subscribers can reap the benefits of their hard-earned wisdom, I pledge to aim the limelight periodically on case studies that I believe offer great examples of overcoming obstacles and making flexible mid-course corrections. 
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