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Is it really not possible to bootstrap this or raise through debt? Why do you need $20m to compete in this market? I wish more companies would avoid taking lar

Is it really not possible to bootstrap this or raise through debt? Why do you need $20m to compete in this market? I wish more companies would avoid taking large outside investment, but maybe that’s unrealistic.

lojack 8y ago
Whats wrong with taking large outside investment if the terms are favorable? As an extreme example, if I thought my company was worth $40m and someone offered $20m in exchange for 10% of my company I would absolutely take that deal whether or not I needed the money. The problem might not be that the company is taking a deal when they shouldn't. It very well could be that the investors are overpaying. It's also totally possible that this is a good deal if it helps the company get a bigger slice of the market because they can grow quicker.
- albertgoeswoof 8y ago
  You’d take that money, and now you have a 200m dollar company, so you need to hire, market and scale like a 200m dollar company. And btw you need to be worth a lot more than 200m next year otherwise your investors (who have significant influence) will be pissed off. So instead of continuing to deliver for your current customers and users you start chasing bigger things, and if you’re lucky it works, if not you fail and your company burns all the cash in a couple of years and files for bankruptcy.
  - exolymph 8y ago
    You're both right. Whether taking VC capital makes sense is context-dependent. What kind of business is it, and what are the market dynamics? What are your own goals for the business? Etc.
- deleted 8y ago
  [deleted]
marcinzm 8y ago
Slack has raised $1.2 billion and is now going to raise even more by going public. Discord has raised $280 million. Microsoft is putting who knows how much into teams.
- opportune 8y ago
  I was under the perhaps mistaken impression that Slack was not raising money from going public since they were doing a direct listing
  - mandeepj 8y ago
    IPO’s are always about money and getting rid of unwanted investors
  - ttul 8y ago
    This is correct. They are just listing their existing shares; not issuing new capital. But once public, they can issue stock at will.
tootie 8y ago
To buy lots of advertising and sales staff.
it33 8y ago
Hi @albertgoeswoof, Mattermost CEO and co-founder here. To me, a Series A investment is about bringing on more supporters for the business. Redpoint led our round and they've also been investors in companies we admire: HashiCorp, Zendesk, and Twilio. I'm excited to have their help to deliver more value, more quickly to our users and customers. While I think it's possible to build a great company without significant outside funding (e.g. Valve), I think it's more rare, therefore higher risk.
- albertgoeswoof 8y ago
  Thanks! Mattermost is an excellent product already so good luck.
  - it33 8y ago
    Thanks @albertgoeswoof!!

lojack 8y ago

Whats wrong with taking large outside investment if the terms are favorable? As an extreme example, if I thought my company was worth $40m and someone offered $20m in exchange for 10% of my company I would absolutely take that deal whether or not I needed the money. The problem might not be that the company is taking a deal when they shouldn't. It very well could be that the investors are overpaying. It's also totally possible that this is a good deal if it helps the company get a bigger slice of the market because they can grow quicker.

albertgoeswoof 8y ago
You’d take that money, and now you have a 200m dollar company, so you need to hire, market and scale like a 200m dollar company. And btw you need to be worth a lot more than 200m next year otherwise your investors (who have significant influence) will be pissed off. So instead of continuing to deliver for your current customers and users you start chasing bigger things, and if you’re lucky it works, if not you fail and your company burns all the cash in a couple of years and files for bankruptcy.
- exolymph 8y ago
  You're both right. Whether taking VC capital makes sense is context-dependent. What kind of business is it, and what are the market dynamics? What are your own goals for the business? Etc.
deleted 8y ago
[deleted]

marcinzm 8y ago

Slack has raised $1.2 billion and is now going to raise even more by going public. Discord has raised $280 million. Microsoft is putting who knows how much into teams.

opportune 8y ago
I was under the perhaps mistaken impression that Slack was not raising money from going public since they were doing a direct listing
- mandeepj 8y ago
  IPO’s are always about money and getting rid of unwanted investors
- ttul 8y ago
  This is correct. They are just listing their existing shares; not issuing new capital. But once public, they can issue stock at will.

tootie 8y ago

To buy lots of advertising and sales staff.

it33 8y ago

Hi @albertgoeswoof, Mattermost CEO and co-founder here. To me, a Series A investment is about bringing on more supporters for the business. Redpoint led our round and they've also been investors in companies we admire: HashiCorp, Zendesk, and Twilio. I'm excited to have their help to deliver more value, more quickly to our users and customers. While I think it's possible to build a great company without significant outside funding (e.g. Valve), I think it's more rare, therefore higher risk.

albertgoeswoof 8y ago
Thanks! Mattermost is an excellent product already so good luck.
- it33 8y ago
  Thanks @albertgoeswoof!!