Raising money in the current environment. Every little helps.
During the last months the talks between SaaS founders and investors are all about operative efficiency and how to burn less cash monthly, extending the runway for 2–3 quarters and aiming to achieve break even in the short term. And the 2 cents advice suggests waiting 12 to 18 months to raise your next round, for startup valuations to recover a bit.
But eventually you will have to go to the market and look for funding to fuel your growth.
We were lucky to raise a $23 million round a few months ago, led by Accel Partners with participation of Earlybird, Salesforce Ventures, and Kibo Ventures. Well, lucky we were, but it was mostly because of our team, technology, general market readiness, some flagship customers and the enormous growth potential that we managed to get this done.
You can read our full Series B funding announcement here, where Javier de la Torre, our CEO, explains our big plans for the future.
We are excited to announce the close of $23 million in Series B financing to expand CartoDB's mission, enabling anyone…blog.cartodb.com
Nevertheless, the way you communicate things is absolutely paramount if you want to get the chance to be heard in this crazy funding environment, particularly by the right people.
We hope that sharing the deck will help others to get better chances to succeed to get funded by the right people and at a fair valuation, even if the situation is much more difficult now.
We knew from the very beginning of the fundraising process that we wanted to aim for the very best, optimizing for people, rather than valuation. And we were ready to waive the sirens’ song of inbound VC interest and even wait a few more months, if we could not convince our ideal partners after our first round of qualified intros with key players. If you consider the dramatic change in the VC’s sentiment over the last weeks, we were quite timely with our closing.
Hence, getting a deck and story telling which could awake the appetite of the top tier VCs in the world, while also helping us to organize our ideas on what we do, why we do it and what is our path to future success, was very important to us.
We went through much iteration on design; structure, messaging… and I want to thank specially Emilio for his design talent, Ciaran and Oriol for their reality checks and hard feedback. And finally, Javier and Andrew for all those trips decoding the investors’ formula, in the quest to achieve the perfect pitch, with the exact dose of attitude, jokes, passion, knowledge and humble recognition of the things we don´t know. Yet.
That secret recipe for funding success is almost magical, but if you stay true to your core differential advantages, and convey a powerful message, managing timings, process and getting your KPIs on track, it is indeed feasible to crack the code ;)
When we first started to prepare the deck, we used the one-year-old series A investor’s presentation as a starting point, and we were amazed at how much things had changed in 12 months. For once, we had managed to execute fairly well on the main areas of focus, and got great performance figures, with a 2.5–3x growth in a 10 months period in Revenue, Team size, Users, Engagement…But on the other side, the landscape had changed so much that we needed to rethink many of our initial assumptions. Innovative technology moves real quick!
As you will find in the deck, if you want to convince Accel Partners and the likes, it is important to start with a powerful message and an obvious need that affects many. Move on with a disruptive solution that will increase their happiness by a 10x factor and then show that you have figured it out (at this stage, it is no time for crazy, untested bets, but for scaling up the execution machine after proven traction).
Well, you guess what, of course we have not figured it ALL out. I wonder if we ever will. But at least we have a strong vision on how the future of geospatial technologies and location intelligence will be shaped and we want to be a central pillar of this hot and vibrant ecosystem.
Truly global businesses are all about network effects, where adding more active members to your community, more data to your libraries, more partners to your channel and more key logos will enable your platform to be more defensible and sticky in the enterprise environment.
And having a clear go-to-market strategy for each of your products, with killer use cases where you can show significant ROI and a clear path to the $1 million ACV customers, is a critical milestone in your presentation. The more you can support your strategy with real life examples coming fresh from your CRM’s pipeline, the better.
Finally, it is all about doing things so much better than anyone else, having a strong personality with bold action plans and focus, are you the best platform performing on the cloud? can you handle two orders of magnitude of more data than your competitors? do you enable more developers to build awesome apps? These are the questions that need to be unequivocally answered.
I have not included here the 30–40 extra slides we had in the annex of our deck, with an explanation for almost any hard question that might arise, and which was updated after each meeting ‘s debrief, to cover new unexpected turns.
After many meetings and fair negotiations, we were finally able to convince great, experienced individuals to join our ship and journey to shape the future of location intelligence. We had actually started to talk with Accel’s Partner Philippe Botteri almost one year ago, and quarterly updated each other on key milestones and challenges, and this built trust and rapport over time helped us greatly to take the decision on which companion to chose in the race.
The rollercoaster ride has just started and we still need to deliver to the expectations with hard work, luck and lots of enthusiasm.
P.s.- We are hiring!