milk money, part two (a wee bit more)
Last week (before the fire hit!), I talked about how we went about raising investment money for meebo through our “angel” round of financing. Given the comments, people are definitely interested to hear the story through to the close of series A. In writing this up, I again discovered the story’s too long! As such, here’s the next part, with the conclusion to come in part 3. Here we go…
By the time we’d closed our angel round, meebo had been public for a little over a month (I think a month and four days to be exact). By this time, a number of venture capitalists (VCs) had become aware of meebo either through their professional networks, or through blogs. A number of these folks contacted us, either by directly emailing, or by finding someone we both knew in common.
We had just closed our angel round at this point, and weren’t sure that we’d want to raise any more investment money. As I mentioned in my previous posting, the guide we set for ourselves was that we’d only raise money if we actually needed it. We were also concerned that meeting with VCs would take considerable time! On the other hand, it was possible that we’d later want to raise a series A, and most people were telling us that the entire process would take months. If we were to decide to raise series A, we wanted to be able to raise it quickly. Our solution was that I would meet with the VCs while Elaine and Sandy continued to dedicate close to 100% of their time to coding new features.
It turns out that each VC firm can be quite different from the next! The questions were often the same: “How fast are you growing?” “Where are you going to take meebo?” “Why are you defensible?” “How are you going to make money?” “Who are your first hires?” However, the approach each VC took was very different. Some VCs would have us meet with a single, junior member of the team, while others with 2-3 people, usually of mixed seniority. Some would try to convince us that we should raise series A immediately and others just accepted that we didn’t want to raise series A. After these initial meetings, some VCs helped us get connected to other people they thought would be valuable for us to know, others asked us to meet with more of their teammates, and still others just waited for us to make contact again.
In late November, a bit over two months since meebo had launched, Elaine, Sandy and I were in Sandy’s apartment on a Sunday afternoon for a quick status update. Sandy said she was spending more time managing our ever-growing server farm than coding; Elaine was coding, but felt like she couldn’t turn features out fast enough, and I was running around from VC meeting to potential partner meeting like a chicken with its head cut off! This was when we realized that meebo would benefit by us expanding the team, and this was the trigger for us deciding to raise a series A round of financing.
In my next post I’ll get us through the conclusion…I promise!!
Seth
January 16th, 2006 at 9:37 am
Have you been reading Guy Kawasaki’s blog?
Specifically,
this entry: http://blog.guykawasaki.com/2006/01/the_top_ten_lie.html
and this entry: http://blog.guykawasaki.com/2006/01/the_top_ten_lie_1.html
January 16th, 2006 at 10:31 am
So have you hired a sysadmin/ops team yet?
January 16th, 2006 at 1:25 pm
By the way, I noticed that you guys are hiring ( compliments of simplyhired.com), but there is no career or job links on meebo.com, which is odd.
January 16th, 2006 at 4:48 pm
khangtoh, smart candidates will know where to look.
January 17th, 2006 at 6:43 pm
Plus, a link is already in there. Near the bottom it is.
January 21st, 2006 at 10:16 am
I was fascinated to read of your experiences raising funding. But I’d be very interested to know what series A means.
Love your site-thank you!
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[...] meeblog Blog Archive milk money, part two (a wee bit more)milk money, part two (a wee bit more) Last week (before the fire hit!), I talked about how we went about raising investment money for meebo through our angel round of financing. [...]
July 3rd, 2007 at 2:37 pm
[...] meeblog Blog Archive milk money, part two (a wee bit more)milk money, part two (a wee bit more) Last week (before the fire hit!), I talked about how we went about raising investment money for meebo through our angel round of financing. [...]
July 3rd, 2007 at 4:39 pm
[...] meeblog Blog Archive milk money, part two (a wee bit more)milk money, part two (a wee bit more) Last week (before the fire hit!), I talked about how we went about raising investment money for meebo through our angel round of financing. [...]
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