Thread by @davemcclure

1/ today $TWLO has a market cap of ~$49B and announced they're acquiring Segment for ~$3B.
while it's easy to #humblebrag "i was fortunate to be a seed-stage investor 12 yrs ago" (see i just did it) and make a splash on @VCbrags, i have another story to tell.

2/ about 8 yrs ago i invested in a small #SaaS startup from Australia that was just a few people and had raised <$500K, was doing maybe $10-25K in monthly ARR (sorry if i'm forgetting exact #s but it was pretty early)

3/ we invested $100K from 500 Startups and they were part of one of our early accelerator batches, i think #5 around summer or fall 2012. they were smart, and had a functional product with a clear use case and customers.

4/ the company gradually made progress, raised a small seed round (not quite $1M), and continued to grow. about 3 years later i think they were doing >$1M ARR, and they raised a small series A round (not quite $3M).

5/ a year or two after that, they were probably doing $2-3M ARR, and raised a series A extension that was another $7M. this was now about 4 years after we met them and invested. there were maybe 40-50 ppl working for the company (again apologies if my #s are slightly off here)

6/ we had made a few follow-on investment as they raised new rounds. they were neither the fastest nor slowest-growing company. they made progress, they had setbacks, but overall they moved forward. they changed the name and biz model slightly over the years.

7/ i didn't talk to them that frequently, but I'd check in on perhaps an annual basis. last year i caught up with the founder, and 7 yrs after we met they're doing $9-10M in ARR and profitable. the pandemic has made a few things challenging, but they're in decent shape.

8/ i purposely haven't named the company (altho you can maybe figure it out from my clues), bcz it's not a TWLO-type story. it's not close to being a unicorn. they haven't raised much more than $10M, and it took a while. but they are a decent-size profitable $10M/yr biz.

9/ there are ~50-100 similar companies I've invested in over the past decade. a few might go public in next 5 yrs, but most won't. some might get acquired for $25-250M, and generate a decent 5-20X return. maybe 1/3 will survive but never exit. another 1/3 will still fail.

10/ these are not the stories that most VCs talk about. they aren't going to inspire the faux #humblebrag "we are so proud to have backed them from the beginning" tweets that you get from the big IPOs or unicorn exits. they won't inspire LPs or press or even other founders.

11/ but these ARE the stories that SHOULD inspire founders and press and entrepreneurs. they are FAR more common than $TWLO or $SEND or other unicorn exits. and they have REAL impact in local markets and communities -- they make money and provide jobs and solve REAL problems.

12/ and what's even more exciting is there are many MANY ways for these companies to get started and raise money these days -- many of which no longer require traditional venture capital. lots of these $10M/yr co's can get started on customer revenue, debt, or small seed capital

13/ but whether or not they require VC, and whether or not they turn into unicorn exits or not, they are REAL BUSINESSES that solve CUSTOMER PROBLEMS, provide JOBS, and make MONEY.

14/ in fact, non-public co's in the US are perhaps ~50% of US GDP (even more globally), and SMBs <100 people make up ~20% of US GDP. altho you might not think of tech startups as sustainable SMBs, that's where many of them end up.

15/ so while u celebrate the big wins of amazing unicorns and IPOs -- and don't get me wrong, $TWLO (& SendGrid & Segment) are amazing -- let's not forget all the other companies that slog it out for a decade, and also build solid, sustainable companies and jobs and solutions.

16/ ... because they are heroes too. /END