The Lotto funded by Bay Partners: Interview with Jason Beckerman, co-founder of Dank Apps

beck.jpgLast week, Dank Apps announced $250,000 funding from Bay Partners as part of the AppFactory program. Dank Apps is the developer of The Lotto, which has gained popularity by offering daily cash prizes to Facebook users. I spoke with Dank co-founder (and Graphing Social viral strategy co-panelist) Jason Beckerman about the funding and his company’s unusual structure.

IF: Why did you decide to take money from Bay Partners, as opposed to angel investors or a traditional VC round?

JB: Actually, we wanted to pitch Teach The People, since that was the idea and business that submerged us into the Silicon Valley scene. (We presented at Techcrunch40 and had been in San Fran trying to raise money.)

We walked in, presented Lotto for the first time ever, and Bay was very interested. Seeing the companies Bay has been involved with in the past, it was hard to not want to work with them. The process was seamless, and Angela and Salil from Bay have been AWESOME and supportive.

IF: Will someone from Bay Partners be joining your board? If so, who?

JB: As of now, no.

IF: Did you apply for a fbFund grant?

JB: Nope we never did. Mainly because we didn’t think this was ever going to happen. We were shocked and super excited for the opportunity!

IF: It sounds like Dank is not a traditional startup. How are you structured?

JB: Our company uses a new organizational model. We always concentrate on the how will we make money first, worry about attracting users second. Therefore, we actually outsource everything to various parties. From business software, to coding, to design, to accounting, to legal, we believe they can do all of that better than we can. We manage the projects and their success but the design and coding is done by others. Since we have a great relationship with them, we actually keep their identities hidden on the development side. As for design, Carrot Creative does most of our design work .

Other than that, we have a team of about 8 people, but without standard roles. As we grow and take on additional rounds, we will not need to hire anyone, we have a great team in place with a very diverse skill set. One of our founders works on the Colbert Report while another works for one of the largest financial software firms in the world…another is obtaining a PhD in art history at Emory. We really have a diverse group with very differing view points on the industry.

IF: How much revenue is Lotto generating on a daily basis?

JB: We are working to streamline our revenue generation now that we have the money to do so (up until now we really spent very little to get to market. We are really, at this point, giving away most of our revenue to our users. We call this Robin Hood Marketing. As we grow, our users will make out very well. We also have a lot of new ways we plan on making money in the future, but they are under wraps for now 🙂

IF: What are your future plans?

JB: After we perfect the lotto in the next few weeks, we have 10 new applications planned. The first is Be Santa which will launch the end of next week. We truly believe it is a next generation Facebook application. More info to come on this next week!