Many saw it and asked to invest, and we worked with @joinrepublic to make this possible
Investing in startups is the ultimate "who you know" game; you must be an insider and have significant access to capital
The open application process helps us provide access to non-accredited, non-traditional investors AND maximize the impact this has on our company's success
The criteria: 1) Diversity: 25% of the round should be URM's 2) Mission-Aligned: You're a potential user or instructor of a cohort-based course 3) Value-add: You've got an edge that can help us achieve our mission
Please don't lobby us or our investors; your app is sufficient!
Terms:
A standard SAFE at a $25M Cap
Republic does not take a carry
We pay for all company-side fees
No matter what, remember that startup investing is extremely risky. My last company Sprig lost ~90% of investor's money!
Advanced Fundraising Strategy:
For most, fundraising is a chore. These days, more companies are fortunate to have competitive rounds.
What do you do when you have options? How do you optimize a competitive round?
@wes_kao and I had options... Here's how we approached it.
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We named our priorities up-front: 1. Involve investors who backed us in the past 2. Find a Lead who would help raise the A 3. Leverage Lead + large syndicate to create traction (our market is aligned with this strategy as many investors can be instructors or help promote courses)
To make room, we had to raise $4M. If we raised less, we'd have to exclude too many people. If we raised more, the company would be over-valued or over-diluted.
I do not believe in having a valuation over $25M for a pre-seed company. Too hard to beat those expectations.
I’ve been thinking about co-founders a lot lately.
In 15 years of building companies, I’ve had >10 different co-founders.
They’ve fired me. I’ve fired them. But I’m still friends with 100% of them to this day.
... 15 Rules on Co-founder Relationships
**Read On**
Rule 1: You don’t have to know each other in advance.
@erenbali and @caglaroktay didn’t know me when we started @udemy, but I think all of us would agree the company wouldn’t have happened without any one of us.
Rule 2: Create a pre-nup through role definition.
99% of companies should have a clear CEO. If you are not that person, you report to them.
Co-founders firings should not be done lightly, but if it happens, the CEO decides.
Most investors add no value, but when they do, it can be company-saving.
In 2010 as @udemy was just picking up steam, eBay-owned PayPal was cracking down on marketplace businesses for violating ToS. Without warning, they shut our entire payments system down.
**Read On**
We had a few months of runway and were starting to raise our Series A. It would take weeks to implement an alternative system, and that would've killed our traction story.
It was all-out panic mode.
We asked everyone for help - many were experiencing the same problem.
PayPal was notoriously bureaucratic at this time and was completely inaccessible to small startups like us.
The "best case" scenario, we heard, was 3 months of downtime.