Raising Capital

Dilution vs. Death

Thanks Laff4K for CC-A photo

I was chatting with a talented and smart founder/CEO in our portfolio about the Series B funding round he is going out to raise for the company, and the subject of dilution came up.

We had a conversation I have had many times: how much money to raise, and at what price. Specifically, he was sensitive to the amount of dilution he would take in the next round of funding. He owns approximately 20% of the company now and thinks things are going well. Ideally the company might raise more money at a $150M valuation, but if the market won’t support that, and offers came at say $100M, his inclination would be to raise a small amount of money and make more progress and go out later to … Read More »

A Startup CEO’s Guide to Burn Rates and Vaporization


The alarm has sounded.  A three-alarm fire, with alarms named Bill, Fred and Marc.  Burn rates are too high, change course or risk the consequences.

A CEO might be forgiven for asking: “that advice might have been more helpful before I hired those extra hundred engineers, and leased the fancy SOMA exposed-brick office to house them in.  Changing course on burn-rate now will be a lot harder than it would have been a year ago.”

To which I would say: suck it up and go run your business.  The past is past, and the decision you need to be focused on as the CEO is:  what should I do now?  The board is not running your business, they merely advise you, and you are ultimately responsible for making the correct decisions.

The question remains:  What should I do now?


The Past is History, … Read More »

#TBT – What Series A Fundraising Looked Like in 1999

Times have changed pretty dramatically since I started my first business in 1999, and I thought for throwback Thursday it would be interesting to share with the young’uns what Series A fundraising looked like back in 1999.

My business was then called InsightMarket, as a placeholder, and we thought we would call it WannaBet. We eventually launched as Flutter.com and it became Betfair when we merged with our biggest competitor.

I think our financing was extremely typical of the era — but how does the Series A process of 2014 compare with fifteen years ago?

Take a look through this fundraising deck and marvel at how risky a Series A investment was in 1999 – how little we knew about the product, the customer, acquisition, product-market fit.  This 14 page deck was the entire fundraising pitch — there was nothing else, no model, … Read More »

Q&A: Cold Email

Question:  Will an investor consider an investment via cold email, if that email contains complete info about the business?

In a world of no scarcity, I would read every email from an entrepreneur and take every coffee with them.  I rarely fail to enjoy hearing about someone’s business.  And, if you could remove the financing agenda, I would probably enjoy all of them.  (What I mean is: since I turn down 99 out of 100 investment opportunities, and in general decide quite quickly, I enjoy the meeting itself but that enjoyment is reduced by thinking about having to say no the the entrepreneur, and by the fact that my financing agenda and their fundraising agenda dilutes the quality of discourse in the meeting: they don’t want to talk openly about the things that are likely to kill … Read More »

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