31–40 of 60 posts
We predicted a June 2014 1.5M round at Telegraph Research: http://www.telegraphresearch.com/mattermark/
That would be a really useful/neat tool if it covered...like...all of them.
This is good, as customers who are paying do tend to believe in the product offering and direction.
For our startup ( https://microco.sm/ ) we have a similar story, our first £150k of investment came from users of our software, people already using forums and who believe deeply in the story we're telling about where we want to take forums. It was also quick... the first £50k took 15 hours to raise, the £100k follow-on took 180 minutes.
Unfortunately for us, our customers aren't VCs and angels. So this is extremely unlikely to continue to scale. Oh well, time to find angels and early-stage investors in London who will help us reach the next set of product and revenue milestones and the ones after.
Earlier quoted context omitted.
Banks will not loan you $5~10+ million on $1.5 million in revenue [+], which is what the Series A will likely be. They'd be happy to offer you $150k to $300k or so, depending on the officer. You can get a higher percentage when you graduate to a more stringent vetting process, which banks will typically start making available after you have $10M+ in revenue, significant hard assets, etc. (Business underwriting is har…
Agreed. I was more commenting on the more recent trend of "risk averse VC investment". As the OP states at $1.5 ARR, they would be profitable. It feels like VC investment in B2B space has become highly risk averse, only funding expansions of proven business models (we'll give you money if you can prove that you don't need it). This is a fine investment model but not sure it qualifies as "venture" investment. Can you…
Right now if I were in that situation, it looks like I could get a 30 day trial for free but I wouldn't continue it at $499 a month. I wonder what other monetization opportunities there are for the data Mattermark has.
As a bootstrapper with 100% equity in company that just passed $1M YOY revenue and should hit $2M this year, I read these articles on HN and cringe. To me, it would be a special kind of hell to have 40 investors to answer to, no less in a company under $1M revenue. Seems to work for some founders to get rich quick but for god sakes I don't envy that position.
The amount of dilution here is worth noting: YC: ~10% after conversion 500 Startups: ~10% after conversion Version One, Felicis, etc (Q1 14): $1M+ investment at $5-$7M valuation at most? Another 20% Flybridge, A16Z, Gramercy, etc (Q2 14): $1M investment at $6-$9M valuation at most? Another 20% Between just these 4 groups, they own 60%+ of the company. I'm not accounting for angels. In addition to this, with an option…
I want to clarify this, because I don't want anyone else to think they should take 60% dilution before they take their real first equity round. Without revealing our entire cap table and terms (I'm transparent as I can be, but I think this would upset some of my investors) I can tell you the rule of thumb is to give up no more than 25% dilution on convertible notes before an equity round.
Generally you will sell 20% of the company in the Series A (read as: first equity round), 15% in the 2nd (Series B), another 15% in the 3rd (Series C). Our dilution position from these early rounds is still slightly TBD depending on the valuation we get in our next round, but we are sticking pretty close to this rule. Additionally, we maybe we able to hit the milestones required to sell less than 20%... so that optionality is there.
40 investors where "50% are in touch 1x per month, and 25% are in touch 1x per week." That's 60 emails a month (2 a day). Do you find this helpful? Can you keep them all so well-informed? Can you actionably react to all that communication and advice?
The only pain is at series A when I'm going to have to go get all of them to sign the closing docs. That'll be hard.
Earlier quoted context omitted.
Agreed. I was more commenting on the more recent trend of "risk averse VC investment". As the OP states at $1.5 ARR, they would be profitable. It feels like VC investment in B2B space has become highly risk averse, only funding expansions of proven business models (we'll give you money if you can prove that you don't need it). This is a fine investment model but not sure it qualifies as "venture" investment. Can you…
To a degree I think in B2B you have every right to be quite a bit more risk averse as an investor, and demand to see a solid revenue stream coming in. In B2C you can bet on the idea of "explosive" growth, but that's much less likely in B2B. The flip side of that of course is that you should be seeing a lot more revenue per customer in B2B, but the quantity of customers isn't ever going to hockey stick in the same way…
The heart of any b2b business is repeatable business. The problem is that the higher your pricing point, the fewer customers you will have. This makes it harder to know if you have a repeatable sales process. So given an option, in the early days I'd rather sign up 100 customers paying $1000/yr than 1 customer paying $100,0000/yr.
Earlier quoted context omitted.
Agreed. I was more commenting on the more recent trend of "risk averse VC investment". As the OP states at $1.5 ARR, they would be profitable. It feels like VC investment in B2B space has become highly risk averse, only funding expansions of proven business models (we'll give you money if you can prove that you don't need it). This is a fine investment model but not sure it qualifies as "venture" investment. Can you…
To a degree I think in B2B you have every right to be quite a bit more risk averse as an investor, and demand to see a solid revenue stream coming in. In B2C you can bet on the idea of "explosive" growth, but that's much less likely in B2B. The flip side of that of course is that you should be seeing a lot more revenue per customer in B2B, but the quantity of customers isn't ever going to hockey stick in the same way…
I think there is a very good chance that VCs will miss HUNDREDS of $100M+ SaaS opportunities due to this risk aversion over the next 1-7 years. If I were to start a fund I would focus 100% on this asymmetry.