The most perturbing by far were the few folks who
Posted: Sun Dec 22, 2024 9:28 am
Came back and said they didn't like to back the consulting revenue model and would be more interested once we were more product-focused. When I'd explain that we had 80%+ of revenue for the past three years coming from the self-service SaaS product, awkward silences would follow. Still, these are investors who likely talk to hundreds of companies each year, so it must be incredibly challenging to keep things straight - and it speaks to our need to move away from consulting in our branding and perception.
The Final Outcome It's likely very obvious at russia email list this point that we didn't receive term sheets or offers to fund. In actuality, that's not technically the case - we did have firms interested, just not a the relatively high pre-money valuation numbers we sought. As you can see in the graphic above, there were a number of VCs who may have offered us terms at a lower valuation, though it's hard to say for certain. The reason we went in with a high valuation "ask" goes back to the very beginning of the post.
From the founders' perspective (and those of employee shareholders), an exit has to be judged through the lens of ownership percentages. If I or Gillian or Sarah owned, for example 50% of SEOmoz's shares (none of us do - this is just an example), in a $20 million exit, we'd make $10 million. If venture capital comes in and dilutes that to 35% ownership, that number drops to $7 million in the same exit scenario. Hence, every owner of SEOmoz shares has a vested interest in seeing the final exit price reach the highest possible figure while maintaining the lowest possible level of dilution.
The Final Outcome It's likely very obvious at russia email list this point that we didn't receive term sheets or offers to fund. In actuality, that's not technically the case - we did have firms interested, just not a the relatively high pre-money valuation numbers we sought. As you can see in the graphic above, there were a number of VCs who may have offered us terms at a lower valuation, though it's hard to say for certain. The reason we went in with a high valuation "ask" goes back to the very beginning of the post.
From the founders' perspective (and those of employee shareholders), an exit has to be judged through the lens of ownership percentages. If I or Gillian or Sarah owned, for example 50% of SEOmoz's shares (none of us do - this is just an example), in a $20 million exit, we'd make $10 million. If venture capital comes in and dilutes that to 35% ownership, that number drops to $7 million in the same exit scenario. Hence, every owner of SEOmoz shares has a vested interest in seeing the final exit price reach the highest possible figure while maintaining the lowest possible level of dilution.