Fundraising

Mike’s Note #1 — Raising too much?

I’m going to start writing a weekly note (at least try!). Inspired from my great friend Max Yoder — make sure to check out his weekly note if you want to do better work. I’ll…

I’m going to start writing a weekly note (at least try!). Inspired from my great friend Max Yoder — make sure to check out his weekly note if you want to do better work.

I’ll focus on something that caught my eye in the startup space, an interesting data set and/or anything that I think can give founders a better chance of success. If you unsubscribe, I totally understand but my goal is to make this as valuable as possible.

Have you seen the latest buzz about founders wishing they had retained more ownership? Sam Altman from YC tweeted it here. The takeaway is founders feel like they dilute too much early on. Sam also thinks that founders dilute themselves 2x more for the same level of progress they used to 10 years ago. Suhail (Mixpanel founder) has a great response in his tweet. In short, he encourages founders to raise less money at a lower valuation early on. Easier said than done! I do love his mention of thinking through the preference stack. I think it’s incredibly important to model out how the preference stack impacts outcomes and decision for founders. Speaking of doing more with less. Can you guess which companies financials these are before going public.

If you guessed Google, you are correct. How much did they raise to get to this point? Only $25M. A little different than today’s climate.

Curious, have you felt like you’ve given up too much of your business?

p.s. related to fundraising. I’m open sourcing an investor database and would love your help. Read the manifesto here.

— Mike

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