Comments on: 5 milestones to reach before raising venture capital

By: So just how do you make money out of serving up a free lunch? « excapite

So just how do you make money out of serving up a free lunch? « excapite — Fri, 30 Oct 2009 01:23:20 +0000

[...] based Freshbooks is one of the great Freemium startups of recent times. Here in his recent post milestones to cross before raising venture capital Mike McDerment, the CEO and Co-Founder of Freshbooks, provides some advice and insight for [...]

By: 5 milestones to reach before raising venture capital

5 milestones to reach before raising venture capital — Fri, 17 Jul 2009 14:10:41 +0000

[...] one that I am being asked a lot lately, so I visited and thought it was great, you can see it on this link or below. Mike McDerment: I meet lots of web entrepreneurs who tell me they want to raise venture [...]

By: Do You Think Like a Dragon? |

Do You Think Like a Dragon? | — Mon, 13 Jul 2009 16:39:52 +0000

[...] read a good blog post on Freshbooks about raising venture capital. Mike McDerment, the owner of the company, has great insights into [...]

By: Web Startups – Does Venture Funding and Geography Still Matter? (Part 1) | Business News

Wed, 17 Jun 2009 17:53:59 +0000

[...] a good time to raise funding. FreshBooks CEO Mike McDerment recently penned a piece entitled five milestones to reach before raising venture capital. The first milestone is the best: When: you don’t need the [...]

By: Web Startups - Does Venture Funding and Geography Still Matter? (Part 1) | Business News

Mon, 15 Jun 2009 06:41:12 +0000

By: Web Startups - Does Venture Funding and Geography Still Matter? (Part 1) -- TECHNOSIGHT

Mon, 15 Jun 2009 05:41:14 +0000

By: Mike McDerment

Mike McDerment — Tue, 09 Jun 2009 12:41:54 +0000

@mark – great to see you here; thanks for stopping by and those are great reasons to raise.

By: Mark Organ

Mark Organ — Tue, 09 Jun 2009 12:35:53 +0000

There is much wisdom in this post. Especially impressed considering that Mike has not actually had the experience of raising money from VCs, as I have.

Without a doubt, raising money from VCs (especially US VCs) means the loss of control, and 95%+ of the time, the ouster of founders from the company. As Mike suggests in the comments, this is true even if the numbers are hit consistently quarter after quarter. But that can be OK.

I think that there are 2 good reasons to raise money from VCs, and I had both of these when I raised money:

1. Opportunity for founders to take significant money off the table. This is important especially for founders without much personal liquidity. It is dangerous to have 99% of one’s wealth tied up in their own private, illiquid company.

2. When revenue growth is *accelerating* (d/dt^2 positive) and revenue conversion capacity can be added with a predictable margin in 6 months or less after the addition of said capacity.

Good luck to everyone here raising capital.

By: 5 milestones to reach before raising venture capital « Venture Capital

5 milestones to reach before raising venture capital « Venture Capital — Mon, 08 Jun 2009 20:41:52 +0000

[...] Continued here: 5 milestones to reach before rais&… [...]

By: Mike McDerment

Mike McDerment — Mon, 08 Jun 2009 17:01:11 +0000

@Brett @David – thanks guys.

@Ian – great call and totally agree.

@Steven – you can still lose control even if you hit your numbers…you need to manage the people (read: board), not just the numbers.