During our seed round in 2020, an investor laughed when I was pitching, called Gamma "the worst idea I've ever heard," and hung up mid-call.
We've now raised at a $2.1bn valuation.
This is the story and every fundraising lesson I learned:
It's the end of 2020, peak pandemic.
All pitches had to be over Zoom.
I'm living in London.
I'd put my kids to bed around 8pm and set up between my kitchenette and laundry closet with a fake background, so that investors wouldn't see the reality of my modest flat.
From 8pm to 2am, I did 30-minute back-to-back pitches with very few breaks in between.
I did 80-90 pitches over two weeks, all from that tiny corner of my London apartment while my family slept.
How can AI startups raise capital at sky-high valuations while losing money?
Because investors are betting on future dominance, not current P&L.
Thread:
Amazon ran e-commerce on razor-thin margins for a decade.
By 2006, net margin was < 2%.
But that's how they established dominance.
You can't compete with a company that keeps prices as low as feasible.
Once you own the market, you can optimize for margins.
Scale translates into profit through three levers:
1) Charging by outcomes or usage. 2) Bundling services to increase average revenue per user. 3) Capturing value across flows through marketplaces and take rates.
Companies can activate any of the 3 to capture more value.