Lessons Learned about Pitching Investors from a First-Time Entrepreneur

http://www.udemy.com/blog/udemy-fundraising/

by flipp • 16 years ago

58 10 16 years ago

udemy.com

sbanker• 16 years ago

I'm very familiar with this stage and love Gagan's insights.

gaganbiyani3• 16 years ago

Thanks man! Appreciate it...

jer890• 16 years ago

Good points. Agree!

blacksmythe• 16 years ago

They mention repeatedly the amount raised, I didn't see where it said at what valuation. If they were left with 75% of the company, that would have been a nice seed round. If they were left with 20% of the company, not so much.

gojomo• 16 years ago

Good chance it was convertible debt; thus there's no official valuation to report. What matters are any valuation caps on the conversion and the next-round valuation.

My guess would be the seed investors have terms that are essentially like having 20-30% of the current company. Selling an effective majority stake (or anything near it) in a 'seed' round isn't a typical valley thing.

gaganbiyani3• 16 years ago

You're right - if we gave up 80% of the company, it would be an awful raise. However, it's a pretty fair assumption that we didn't do that. We chose to take in $1M instead of $300K (which is all we needed). Why would we take in more capital if the valuation wasn't fair?

yosho• 16 years ago

very nice read on fund raising

arisey• 16 years ago

Congratulations! Thanks for sharing your insights. Love to hear about your customer acquisition story as well

mkramlich• 16 years ago

Why would something like Udemy need $1M investment? In a world where Django and Rails exist, etc. Just start building it and doing customer development bootstrapping it. Incrementally improve it as you go along. Keep all equity and maximize simplicity. If you don't want to spend money on a designer try to find one that will take equity. Exercise free promotion channels, also rely on word-of-mouth. Rinse, repeat.

gaganbiyani3• 16 years ago

Good question! The simple answer is that our cofounders are immigrants and we need to support their H1B visa for them to be full-time. Unfortunately, we cannot support their visa without funding. Furthermore, investment is a way to accelerate growth. We're now able to hire additional team members and pay ourselves salaries (I had $250 left in my bank account and $3K in credit card debt when we raised money, so we were nearly broke).

Hope this helps! - Gagan, Cofounder of Udemy

Lessons Learned about Pitching Investors from a First-Time Entrepreneur

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