Neighbor, a peer-to-peer storage company, proved that early failures don’t always determine the success of a startup.
While competing in one of the Lassonde Entrepreneur Institute’s Get Seeded grant rounds for student entrepreneurs, Neighbor came in last place. Five years later the company has closed its $53 million Series B round of funding.
Neighbor was founded by three college students — Colton Gardner, a finance grad from the University of Utah’s David Eccles School of Business and Preston Alder and Joseph Woodbury, Brigham Young University alums — after Alder struggled to find a safe place to leave his possessions during a summer internship.
None of the founders planned on being entrepreneurs before Neighbor.
“Get Seeded was the first time that we built a startup pitch deck,” Gardner said of the program that is open to all university students in Utah. “It was the first time we’d even talked publicly about our company. At these competitions, we were surrounded by people who knew from the very beginning that they wanted to start businesses, who had pitched at every single competition. We lost more pitch competitions than we won, for sure — people thought Neighbor was a bad idea.”
Despite the pitfalls, the founders kept at the problem of sustainable, local storage solutions. They met with an attorney through Lassonde’s Hours with Experts and continued to learn about the industry they wanted to shake up.
Going into their senior year, however, the founders had competitive job offers at prestigious companies. Gardner, who’d graduated a semester earlier, had been working for Cicero Group, a local consulting firm.
For all three founders, work for Neighbor had to be balanced against the rest of their lives: Gardner and Alder were recently married, and Woodbury was expecting his second child. While Alder and Woodbury juggled classes and their new families, Gardner worked upwards of 60-hour weeks at his day job while running the behind-the-scenes of Neighbor through the early hours of the night.
Eventually, something had to give.
“I’m much more tolerant of risk than my wife is,” Gardner said. “She said that the only way I could quit Cicero would be if we received investor fundraising.”
The green light from Gardner’s wife — and the rest of the Neighbor team — came a few months later, when Neighbor raised a $2.5 million in their first seed round. These new investors wanted to see the founders fully invested in the fledgling business idea, and so, in one fell swoop, Gardner resigned from his position and the remaining founders turned down their offers.
The co-founders had been building Neighbor for almost a year by this time, but with institutional investors on board and a growing demand for their product, the Neighbor team had to take on even more new skills: Gardner learned how to setup payment processors, manage reservations, hire employees, and perform a thousand other small jobs within the first few weeks of his full-time commitment to Neighbor.
The investment money poured in at a similar speed — in 2020, they closed a Series A of $10 million, and this year, another $53 million round made up their Series B funding.
“It was a gutsy move, to resign, to turn down really good job offers,” Gardner said. “But I have never regretted it. I would feel that way regardless of whether Neighbor succeeded or failed because I learned so much more here than I could have anywhere else.”
Gardner and his co-founders are planning to use the newest funds to expand the company across the country, hiring more team members and funneling more money into marketing. After the series of successes, Gardner anticipates even more funding rounds in the future.
“I really want other University of Utah students to see that you can be successful as a student startup,” Gardner said. “If you take advantage of the opportunities given to you as a college student — the competitions, community members and all the resources at your school and in your classrooms, your ideas don’t have to die at graduation.”
Learn more about Neighbor at neighbor.com.