Vēmos

Parag Shah

Minneapolis, Minnesota
Serial Entrepreneur
Founder, Vēmos

Vēmos allows hospitality venues and brands to deliver personalized & unique experiences to their customers.

I started my first tech company in college in 2007, and I have been doing startups ever since. To date, I’ve started a few different companies, most of which have failed, a couple of which have done fairly well.

The first company, called LunchBox, was a traditional dorm room startup. We had lots of early traction, but we didn’t really know what we were doing. We didn’t understand how to raise money, or the strategic importance of capital and outside investors, so we ran into resource hurdles a lot. Eventually after graduation, fellow cofounders decided it was time to move on. I continued to run the business and eventually was able to facilitate an exit.

The next successful company I started, called Foodsby, was also in the food space, creating essentially virtual cafeterias at large corporate office buildings. We grew really fast and were able to raise significant capital through VCs and Private Equity. Part of that success came from my previous experience. I now understood how to raise money, and had a previous successful exit to point to, which was very helpful because investors like investing in founders with a positive track record. We were able to grow the company to multiple markets and onboarded thousands of restaurants, including large chains. As the company continued to grow, I was presented with an opportunity to exit, which I eventually took in order to pursue a bigger opportunity I was working on within the hospitality industry. Myself, and one other person, were able to take the exit opportunity to invest in a new company that created additional jobs for the state of Minnesota. It would have been much more difficult to create a new company without the capital generated from the exit.

Today, I’m the founder of Vēmos. We’re a hospitality app that lets hospitality venues create personalized experiences for their customers, like showing a personalized menu that reflects a customer’s dietary restrictions or food allergies, tailored rewards for a customer’s favorite beer, and easy access to favorite menu items. The previous exits on my resume and—given Vēmos’ market positioning—the potential for an acquisition by a large company has been really attractive to investors. The likelihood of being acquired by a company is far greater than taking the company public so it is important to us, and our shareholders, to have multiple liquidy options.

That’s something I think policymakers should really understand—there’s a big difference between our goals and needs as tech startups and traditional small businesses or other industries. Startups might be small, but our goal is to scale. The initial capital to start Vēmos came from personal funds from the Foodsby exit, but we need investment to grow. The reality of any sort of investment is that investors need a return, or the likelihood of a return—and in the startup ecosystem, that’s usually through an acquisition. Exits are such an important part of how innovation is enabled. Taking that away and not allowing people to be acquired would just halt innovation and new companies from forming.

I know policymakers are concerned about a few large tech companies’ acquisitions, but those are a small number of overall transactions, and that focus really clouds the overall importance of acquisitions to startups. The reality is that we’re open to being acquired by anyone, and policymakers shouldn’t make that harder for founders and everyone else that benefits from an exit. Most startups’ compensation includes stock options and so an acquisition means liquidity for our employees and their families. An eventual successful exit is sort of their retirement plan because as a startup we aren’t able to provide the same benefits as other corporations. At the end of the day, it’s not about me, or even our investors, it’s about everyone else that believes in what we’re building.