Firebase recently raised a $1.1 million seed round bringing our total raised to $1.4 million.
We thought it would be a good idea to share the lessons we learned, both to assist other startups who are raising and to shed some more light into the current early-stage market.
We had email conversations with 70 investors. Most of these resulted in in-person meetings, which led to 16 saying ‘yes’, and 14 investing. (We turned down two due to oversubscription) These 14 included:
- 3 VC funds
- 3 seed funds
- 8 angels
Time Spent Raising: 27 days
1. AngelList converts really well.
We sourced investors through three channels:
- Personal connections (Friends, YC, etc)
- Previous interactions (Networking events, previous pitches)
AngelList delivered 18 meetings and 9 of them said ‘yes’. 50% conversion. This compared to 13.5% conversion with non-AngelList investors.
Of the 9 who said ‘yes’ from AngelList, we let 7 into the round. AngelList qualified our leads fast and saved time. If you’re raising money, I highly recommend checking them out at www.angel.co.
2. Press helps. A lot.
Press helps raise money in the same way brand advertising helps make a sale. An investor will be more likely to say yes if you’re a known quantity. Create familiarity by getting written up by credible news organizations and industry blogs. We had articles inWired, Forbes, TechCrunch and ArsTechnica spaced over the course of our round to maintain mindshare. This worked well enough that we were asked, on multiple occasions, who our PR agency was. (Answer: we don’t have one).
3. Top tier investors are less focused on social proof.
We had a number of investors in our round who simply never asked who else was going to invest. They evaluated the team and the opportunity on their own merits and made up their own mind. The investors who did this were the ones with great reputations.
We hope this helps in your fundraising efforts.
This post is repost that first appeared on June 21st on the Firebase blog.
James Tamplin is Founder & CEO of Firebase (www.firebase.com), the fastest way to build an app. James is a serial entrepreneur having previously founded SendMeHome and Envolve. He is a graduate of Y-Combinator and holds a MS and BS in Industrial Engineering from the University of Wisconsin – Madison. You can follow James Tamplin’s personal blog on technology, entrepreneurship and more @ www.tamplin.net.