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ABR – Always Be Raising!

I read the interview that Matt Straz, CEO and Founder of @NamelyHR, gave in Alley Watch http://www.alleywatch.com/2015/07/this-nyc-startup-just-raised-45m-in-record-time/ .

It talks about Namely raising 5 different rounds of capital in the past 12 months.  We at True Ventures were in all 5 of those rounds and we led or co-led three of those rounds.  It is really an anomaly for a company to raise so much money in rapid succession at increasingly higher prices within a 12 month period.  I love Namely and really admire @MattStraz for how he has cultivated this company and achieved such rapid growth.

One of the questions really resonated with me and I have copied it below:

What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?

“Always. Be. Raising. Not letting your startup run out of money is your most important job as a founder, so you need to be constantly in the market meeting with potential investors and telling your story. Most people will say no, so the only way to increase the odds of getting a yes is to keep networking and finding more people to talk to.”

I could not agree more with Matt on this point.

I got to thinking about this interview and thought I would expound on this general topic.  Herewith are my three mantras as it relates to financings:

1. Whether you like it or not, you are always raising money, even when you do not actually close a financing.

2. People like to invest in people they know, like and/or respect.  Let as many investors as you can get to know you and respect you.  Taking on outside investors is a courtship that you do have some control over as long as you plan well in advance.  Most importantly, you need to choose your investor rather than letting the investor choose you.

3. Until you are self sufficient on your underlying business, you must always take into account the inherent financing risk of your business.  Today, in July, 2015, there is very little recognition in the private markets of the fact that financing start ups is extremely risky and money sources can and do exit the scene when they get scared.  Money is plentiful right now — until it isn’t.  There is no 9 month advance notice that you can rely upon of when people get very skittish about investing in illiquid, privately held securities.  So, always have plenty of capital, and don’t spend it believing that the next round, at a higher price, is always just around the corner.

And as for Namely and its most recent round – Congrats!  (just don’t spend it all at once 🙂

cc: @trueventures, @adaugelli

The Lifecycle of the Venture Capital World in one day!

Today is turning out to be quite the day for @trueventures!  The biggest news happened at 6:30 am when FitBit ($FIT) completed its public offering.  There was @jcal7 with all the other investors and executives ringing the bell at the NYSE to commemorate Fitbit’s offering.  We were the first institutional investor in Fitbit almost 7 years ago.  Soon thereafter, I saw the article in Re/Code about our portfolio company Namely announcing its $45 million Series C round of funding led by Sequoia Capital.  (That article is here.)  We have been investors in Namely for over 2 years.  We also signed a termsheet for a new investment in a super exciting start up.  This is our classic investment of $1.5 million for a minority (but significant) stake in a company led by incredibly dynamic founders who have a visceral belief about a new market they want to tackle.  And finally, we have one portfolio company sending around a notice for really good furniture at a cheap price because they are shutting down tomorrow. We have been investors with them for just over 4 years.

In baseball parlance, i would say that we have hit for the cycle today.  it’s a rare thing to have one of your companies complete such a large and successful growth round and it is even more rare to have a successful, multi billion valuation IPO.  Those types of events, though, do not occur without founders and investors alike taking incredible risk at the earliest stage of company formation.  I salute Fitbit cofounders James Park & Eric Friedman and Namely’s Matt Straz, but I also salute the founders of businesses who are just starting out on their journey and also those that are writing the final chapter on their particular business.  We are proud partners with you all.

A True Ventures Two(fer)! Automattic and Kurtosys

I have served on the board of directors for Automattic since October, 2005 and for Kurtosys since September, 2006. Anytime I have the chance to speak about two portfolio companies in the same sentence is a treat. Today, the folks at Kurtosys released this post about Bank Grade WordPress: http://blog.kurtosys.com/bank-grade-enterprise-wordpress-strategic-offering-whose-time-come/

I am thrilled that they have so fully embraced the open source movement for a key piece of their product offering and I know they have appreciated all the help received from the WordPress community at large and many individuals within Automattic. I look forward to seeing all the future product innovations around this product offering. Open Source FTW! I want to give special thanks to @trueventures, @mashpatel and @photomatt for the work everyone has done these past 8 years.

The Price Is Right: And for Early-Stage SaaS Companies, It Needs to Be

Andreessen Horowitz

Nothing is more critical to a software-as-a-service (SaaS) business than pricing strategy. Pricing is the moment of truth for a new product … and doubly so when it is a company’s first product. But far more often than not, I’ve observed new startups leaving “money on the table” when it comes to pricing enterprise products. I’ve seen founders say their product saves hundreds of thousands of dollars — yet their product is priced as if only saving thousands of dollars.

a16z image: Andreessen Horowitz

One reason for this is assuming the need to price and program similarly to competitive products. With a potentially disruptive product, however, falling into the trap of pricing like a legacy competitor not only leaves money on the table — but it could fail to surface your differentiation.

Said another way, your product is your price and how you price your product reflects value from the buyer…

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A new CEO for Automattic

Toni Schneider is such a gentleman and an awesome entrepreneur!

Toni.org

After eight years, I’ve decided to hang up my CEO hat and ask Matt to take over the job.

What an amazing ride it’s been! I met Matt, Automattic’s eventual founder, almost ten years ago, in the summer of 2004. We were introduced by Om Malik and immediately hit it off. I forget when the idea of creating a company behind the WordPress open source project first came up, but I think it was early on. When Matt started that company – Automattic – and asked me to be its CEO, it sounded like a great challenge and opportunity. My first day on the job was in January 2006. Automattic was four people strong and a few months old. We were small, but we had big dreams. We wanted to make WordPress huge – #1 in its market and used by millions of people. We wanted to build a thriving…

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Leadership Training, not Sensitivity Training

I came across this TEDx talk about men needing to step up and be the leaders who are talking about violence against women and girls and even other men and young boys.  The line about someone not requiring sensitivity training, rather leadership training really resonated with me.  i think it is in the 15 minute mark of the talk.

Men who have power and stature need to lead on this issue because there is a whole next generation of young boys who need to see that defending women and their rights is noble and correct and indeed, required to change the paradigm around violence and abuse to those less powerful.

I recommend this talk and you can see it here: https://www.upworthy.com/a-ted-talk-that-might-turn-every-man-who-watches-it-into-a-feminist-its-pretty-fantastic-7?g=3

 

Namely raises $3.5 million Series A after expanding HR services to media and tech industries

Love Matt and Namely!