What I learned from raising venture capital

http://www.gabrielweinberg.com/blog/2011/10/what-i-learned-from-raising-venture-capital.html

by danthompson • 15 years ago

211 30 15 years ago

How much did he raise again? He says he didn't get meetings until after the August vacation period. And announced the funding October 13th. Does it really only take 6 weeks to put together a multi-million (?) dollar round?

wensing• 15 years ago

No, it takes all the work before you ever talk to an investor plus a certain amount of time which for him could have between six weeks given the traction of DDG.

djb_hackernews2• 15 years ago

Not really the point I was trying to make, but thanks?

epi0Bauqu7• 15 years ago

I didn't say, but it was 3M.

As for August, I did get meetings before, it just caused trouble because some meetings I couldn't get before, or there would be large period between meetings, which hurts momentum. And that all adds up to it being harder to align the time-line across multiple firms.

strickjb9• 15 years ago

dontbubble.us link is broken - it sends you to donbubble.us

epi0Bauqu7• 15 years ago

Thank you -- fixed.

conductrics• 15 years ago

RE: Congratulations. My wife is a musician, and back in the day,when record labels mattered, many musicians would focus almost entirely on getting the record deal. That was the thing, to get the deal. Sure, there would be stories about artist X or Y who's album had been shelved by the label or the signed artist losing of control over who would be the producer etc. but primarily it was considered a sign that you had made it, you were legit. You just didn't really consider the loss of control that went along with the 'deal'. I think the same is true with funding. Yes, you are making an exchange - money for equity. However, you are also signaling that you are legit, to outsiders and to yourself. Of course, there is a cost to everything, and if entrepreneurs are not treating the funding as a sub-goal, but rather as the goal,then you wind up with organizations that are optimized to get funding rather building customers/long term profits.

va_coder• 15 years ago

I hope you guys are working on a pro-privacy email service

epi0Bauqu7• 15 years ago

Unfortunately, no time for that. http://help.duckduckgo.com/customer/portal/articles/215614

doc_larry• 15 years ago

Thanks for your article, for someone outside of Europe it helps a lot to get insight on the process in the US. Ironically, albeit a super interesting write, it's your link to why it doesn't feel right that got my attention! Good luck for the rest :-) good things come to those who work hard !

nh• 15 years ago

IF Gabriel is reading this: How did you meet the VCs/Angels you already knew?

epi0Bauqu7• 15 years ago

--Angels mainly through angel investing myself, which I realize most people cannot do.

--Entrepreneurs who have been funded before from going to events and getting intros through other people over the years.

--I really didn't know many VCs. I met a few through entrepreneurship events in Philly. One through an angel friend a while back. And one I worked for 10 years ago.

eps2• 15 years ago

Would you say that doing an angel investment (with no prior experience and no ties into the angel community) is a hard or risky thing to do? I've been considering trying it, but basically don't know where to start...

heyrhett• 15 years ago

I am always extremely impressed by Gabriel Weinberg's honesty and transparency. He's literally not "selling anything" here. This is just a gift to his fellow entrepreneurs.

lurker17• 15 years ago

Well, he is advertising his company. Like HN, it's a marketing activity, but one that also has a value-creation component, not merely an attention-grab.

rokhayakebe• 15 years ago

That doesn't look or fell like advertisement. An ad would be something like "How we bootstrap our way to 7M searches per month"

0x12• 15 years ago

http://www.youtube.com/watch?v=gDW_Hj2K0wo

pg2• 15 years ago

This is good. As someone who's watched this process many times, I can tell you he learned pretty much everything there is to learn about raising VC the first time through.

The only thing that could make his advice inaccurate is that he was raising money for such a good startup. And in particular, one with traction. As he points out, traction trumps everything. So this is essentially a report on what it was like to travel through VC land in the express lane. The scary thing is, even then it took 4 months. It might have gone faster if he'd been on the west coast, but it still would have been a big time suck.

ccollins• 15 years ago

What are the biggest factors that increase the time suck? Amount of money you are raising, inexperience?

Conversely, what consistently decreases the amount of time spent closing a round?

pg2• 15 years ago

The two biggest factors in the time it takes to close a VC round are how obviously good the idea is, and how much competition there is for the deal. The two are not entirely independent of course.

By "obviously good" I mean obviously good to VCs, who as a rule tend to overlook the very best ideas because they seem crazy. So for example it may have slowed things down for Gabriel that he was working on a new search engine, because to many VCs it would seem crazy to try to compete with Google.

makira• 15 years ago

Hi epi0Bauqu! Congrats!

That being said, is it possible to see the actual six slides deck ?

Thanks!

epi0Bauqu7• 15 years ago

Thx! I thought about that a bit, but am not comfortable with sharing it yet.

vaksel• 15 years ago

if Gabriel had so much trouble, I can just imagine how tough the process is for everyone else.

Meganduma• 15 years ago

Thanks Gabriel, this is great.

What I learned from raising venture capital

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