Daryl Hatton has already lived the founder story twice. The first time, he helped take a company public on NASDAQ in 1999, watched its value nearly disappear in the dot-com crash, and spent years rebuilding it before selling it—three days before the 2008 financial crisis hit. The second time, he built ConnectionPoint and its flagship product FundRazr into one of the earliest players in crowdfunding, well before crowdfunding was a category anyone had named.
Today he serves as an advisor and board member to a long list of companies, including GoParity, where he and I both sit on the advisory board. I asked him about starting over after a big exit, what he had to figure out with no playbook to follow, and why he no longer believes doing good and building something sustainable are in tension.
On starting over after a big exit
You took a company public on NASDAQ in 1999, then years later started over with ConnectionPoint and FundRazr. What made you want to build again after already having a big exit, and what was different the second time?
Frankly, while I was an eight-digit multimillionaire for a few months—woohoo—it wasn't long after that I was a zero-digit multimillionaire. The post-Y2K dot-com crash, combined with a bad acquisition, almost killed our company and absolutely killed its value. But we dug in, did some significant restructuring, pulled back from the brink, and rebuilt the company's profitability in the new economic reality of the enterprise software market after Y2K. We eventually took it private and then sold it to our largest competitor. We closed that deal three days before the Crash of ’08, or it wouldn't have happened. Timing and luck play bigger roles than most people acknowledge.
I was commuting every third week from Vancouver to Georgia and overseas, and my body and my soul said, enough. Six months and a day after the acquisition closed, I took the small nest egg I had left and started ConnectionPoint. When my original business partner and I first sold our startup, I thought I'd never return to the trials and tribulations of starting a company again. That journey had been brutal, emotionally and financially. But I'd learned a huge amount over fifteen years, and I realized I had more of the skills I needed to do it again and avoid some of our old mistakes. On my most confident days I thought: I've helped create a successful business, dealt with a shock that almost killed it, rebuilt it, and sold it at real value. I can do it again. All of that was true. It was still brutal the second time around. But it has been the most satisfying thing I've ever done. I proved it wasn't a fluke the first time.
On building a category before it had a name
Crowdfunding wasn't really a category when you started FundRazr in 2008. What did you have to figure out on your own, and what convinced you it would become a real industry rather than a niche?
One side effect of my ADHD is that I'm not very attached to the way things are currently done. I'm always looking for a new way to do things, partly because I get bored easily and hate repetition, and partly because I'm used to simply forgetting how it was done before. That means I'm drawn to what something can become, not just what it does now.
I was an early adopter of Facebook and quickly saw its potential to change how we communicate. My original idea was to use it to collect fees from players on my son's lacrosse team, and maybe raise some money for the team at the same time. So I built the first version of FundRazr to scratch my own itch. The fee collection part was a dud. The fundraising part took off. We didn't know enough about the market when we started, but we built an incredible collaborative partnership with PayPal around FundRazr. PayPal had the numbers that showed the market demand, and we were nimble enough to build technology that could survive the weekly disruptions the Facebook team created in the ecosystem. We needed each other to succeed. FundRazr wouldn't exist without that partnership.
On the false line between doing good and building sustainably
You've built FundRazr around helping nonprofits and everyday people raise money, and you're on the advisory board at GoParity as well. What draws you to mission-driven business, and where's the line between doing good and building something sustainable?
I believe that for us to survive as a species, we need to transform the way we do business. The dangerously misguided focus on businesses existing solely to create shareholder returns is killing us and our environment. For me, a business needs to address the needs of everyone it touches: customers, supply chain partners, employees, their families, the communities where they live and work, and the world in general. It's based on the idea that there is more than enough for everyone, and that one person or a small group can't and shouldn't hoard the value created by the work of everyone involved.
This isn't about throwing out capitalism. It's about evolving it to better serve the needs of our modern world—and in particular, stopping the exploitation of people and the planet for personal wealth. ConnectionPoint is a proudly profit-making business. The difference is that we're set up by design to share the fruits of what we do together. Everyone is making a contribution, so everyone gets a share of the benefits—not equal shares, but fair ones. My focus on helping nonprofits, creatives, entrepreneurs, and individuals raise the funds they need is based on the idea that everyone deserves the opportunity to collaborate with their broader community and solve funding problems together.
The line between doing good and building something sustainable isn't a real thing. They coexist. Doing something sustainable can increase profits, not kill them—but only if you account for the actual costs of delivering your business. If you ignore the price paid by your employees, your community, or the environment, you aren't truly profitable. You're just greedy. And we know how that story ends.
On changing his mind about leadership
After decades as a founder and advisor, what's a belief about growth or building companies you used to hold strongly that you've since changed your mind about?
I used to subscribe to the idea that leadership created the results by directing the company with a firm hand. What I've learned is that the best results come from engaging people in creating the results, not telling them what to do. Leadership is there to identify the talent latent in the organization and help it flourish. It's the reverse of the command-and-control structure that came out of wartime. The benefits are huge: motivated teams, loyalty, passionate performances, and unexpectedly good results.
On what separates a founder worth backing
You sit on the board or advise a number of companies. What separates a founder you're excited to back from one you're not?
I double down on teams with emotional intelligence that also have a clear intellectual sense of what they want to accomplish. In the modern business world, you can only think your way through some of the problems you'll encounter. Things are changing so quickly that you sometimes have to feel your way and operate from instinct as well as insight. One of the strongest signals for a successful entrepreneur is when they're completely focused on solving problems for their customer—when they love their customer more than they love their own solution. Most businesses will go through significant transformation in the next few years. The ones that think customer first will do better than the ones that think product first.
On the one lesson every ambitious founder needs to hear
For a founder building something ambitious today, especially in fintech or mission-driven business, what's the one lesson from your career you'd want them to hear?
If you truly want to scale a business, the most important thing is to know who you really are. Not who you want to be or hope to be. What's the real deal, warts and all. That awareness helps you fill in the gaps in your knowledge and skills, and bring in the team you'll need to grow. The strongest leaders pair a compelling vision they can clearly articulate with the practical knowledge that they can't get there alone, and will need to enrol others in the mission. When you surround yourself with smart people working hard alongside you, it's way more fun and way less stressful than carrying it all on your shoulders. Work doesn't have to be a four-letter word.
Key Takeaways
A big exit doesn't inoculate you from starting over. Hatton's first company nearly lost all its value after a crash; the lesson he took wasn't caution—it was that timing and luck matter more than founders like to admit.
Build to scratch your own itch first. FundRazr started as a way to collect lacrosse fees on Facebook. The failed idea revealed the real one.
Category-defining products often need a symbiotic partner. FundRazr's early growth depended on a two-way relationship with PayPal, not just its own product.
Doing good and building something sustainable are not in tension. Ignoring the true cost to employees, community, or environment isn't profit—it's just unaccounted-for cost.
Direction gives way to engagement. Command-and-control leadership loses to leadership that surfaces the talent already inside a team.
Back founders who love the customer more than the product. Customer-first teams will outperform product-first teams as industries go through transformation.
