Based on the feedback I’m getting from readers, this is easily one of the highest-leverage activities for me: it takes about an hour to put together, and then hundreds of thousands of people can see it and use it in their own entrepreneurial journey. The internet is truly a beautiful thing!
Why did we raise money now? The framework I used for our Series A was just as helpful today as it was 4 years ago. It’s all about meeting these 3 requirements:
- Feeling generally good about the business and where it’s going
- Having reached the milestone you had set for the previous round
- Needing the additional resources to reach a new, ambitious milestone
#1 is both the most overlooked and the most important one. You need to be confident in what you’re doing, so that you can project this confidence to investors and inspire trust and respect. Strong core metrics are by far the best way to help build this confidence. Not so much because that’s what investors are looking for — of course, being a growing, healthy business never hurts when trying to raise funds — but because if you truly believe that these are the important metrics for your business, then seeing them trending in the right direction will genuinely make you feel good.
Last November I felt good about the business for a few different reasons:
- We had gained unprecedented clarity on how to execute our go-to-market strategy.
- We had brought in great new executives (we had just announced that Anthony Kennada had joined as CMO).
- We had had 3 quarters in a row of hitting more than 100% of our goals — and they were ambitious.
- Our current investor showed interest in leading our next round of funding (you can only know for sure when it’s signed, but the signal this sent was very helpful).
- With 2 years of runway in the bank, we didn’t need to raise money. Being under the gun isn’t good for negotiations.